Benefits of Stock Trading Software Tools for Stock Market Investing

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Stock market trading has come a long way from its initial beginning in 1817. Before computers, stock exchanges were held at physical exchange locations. Traders gathered at pits to buy and sell securities through open outcry. Throughout the day, traders would mark in their notebooks the trades they accepted and then settle their books with the transaction counterpart. This system stayed pretty much the same until the NYSE in 1971, the world's first electronic stock market.

Since then, physical trading has been replaced by electronic trading. The discovery of the internet made data more accessible and opened up the industry to new stock market technology.

Trading software, also known as Market Analysis Software, provides analysis tools for financial market traders and investors to help place trades and manage accounts for the stock market. Designed and structured to help increase stock choice decisions, trading software is heavily relied on by traders and investors.  

 
  “Reaching any goal in trading requires specific domain knowledge and technical skills. But then, after that, it's all mindset management. Yet most people ignore that —they automatically think they have that last part all figured out, and it's a mistake.”  - Yvan Byeajee,  Paradigm Shift: How to cultivate equanimity in the face of market uncertainty

“Reaching any goal in trading requires specific domain knowledge and technical skills. But then, after that, it's all mindset management. Yet most people ignore that —they automatically think they have that last part all figured out, and it's a mistake.” - Yvan Byeajee, Paradigm Shift: How to cultivate equanimity in the face of market uncertainty

 

Why Use Custom Software for the Stock Market

Flexible

Flexible and customizable, trading software allows the user to change their own charts. Resistance lines, sector comparisons, indicators, etc., can all change and save within the software. Rather than updating every time on websites, the software lets you start back up where you left off.

Cross-Platform

Accessibility to manage and watch trades from anywhere is imperative to keep a competitive edge. Without cross-platform integration, other traders could score massive deals while you're left in the cold. With 5 billion people using mobile devices each year, the custom software for the stock market industry needs to also be developed with other platform use in mind. From stock decisions to technical analysis, the software needs to be implemented cross-platform to ensure 24/7 access to accounts. With a universal cross-platform code, your software can transition to any device. Enhance efficiency when you access your stocks wherever you go.

Streamlined Procedures

The following procedures, usually done manually by a trader or investor, can be streamlined by the development of software for the stock market industry:

Fundamental analysis

The first stage when picking stocks, the fundamental analysis examines a company’s key financial information from their quarterly or annual reports. Generally, investors or traders base their stock purchase on a company’s registered big profits or growth potential. Since this would usually be a long process to do manually, custom software was developed to help automate the first analysis. These tools are able to filter quickly through key financial data of thousands of companies. After filtering, you are left with companies that are a match with your criteria.

Technical analysis

The second step, technical analysis, automatically evaluates and identifies trading opportunities through statistical trends.  Aimed at using past performances to predict future stock market behavior, historical market data is studied. The main focus of this analysis is to analyze patterns of price movements, trading signals, and a security’s strength/weakness.

Software with technical indicators uses mathematical calculations to analyze historical data to predict price movements. It charts the movements and repeats patterns to show market behavior. Commonly used by active traders, technical indicators help to analyze for short-term price movements.

Stock decisions

The stock market software can allow automated trading, simulation trading, or both within its program. Simulation trading allows the trader to practice close to real life experience trading. Automated trading is faster and more consistent than a human trader. This type of trading takes the emotion and hesitancy out of a trade, reducing human compromise.

  • Simulation trading: Also known as “paper trading”, simulation trading gives investors/traders the ability to practice within the market without real money.

  • Automated trading: Sometimes referred to as mechanical trading systems, algorithmic trading, transaction trading, or system trading. This tool within the software automatically buys and sells securities based on predetermined criteria. Traders place specific rules for trade entries and exits into the program that the computer will automatically execute.

Software developed for the stock market helps traders and investors streamline old processes and make quicker stock market decisions. From flexible charts to automated trading, software technology is helping us bring the stock market to the future.

 

Written By: Nick Rojas
@NickARojas

Nick Rojas