With the adoption of new-age technologies, trading and retail participation in the stock market has significantly improved. Trading has become one of the fastest-growing methods to accumulate wealth in a short period of time. However, it is necessary for traders to know about trading platforms and trading software comprehensively.
What is Trading Software?
Trading platforms are software systems that offer investors and traders certain financial institutions like banks and brokerages. Here, traders and investors can place trades and monitor their accounts.
A trading platform executes trade stocks in a networked environment using computer software. It allows investors to manage, open, and close market positions through financial intermediaries like online brokers.
Traders and investors can conduct limited security trades and maintain funded accounts on multiple markets.
Trading software enables the technical analysis and trading of financial products like options, stocks, currencies, or futures. It can be launched or downloaded from a mobile device or desktop.
As the commission costs have fallen over a decade, the investors and traders must conduct technical analysis and trading using self-directed trading accounts. So, the demand for software that provides trading capabilities, research, and information resources has increased.
The application programming interface (API) management system has helped charge up the trading industry. It is because API allows users to access the benefits of numerous software pieces.
Auto trading tools provide users with particular order types, charts, technical analysis tools, statistics, chat rooms, asset pricing information, and other proprietary functions that help software developers and brokers draw traders to the service.
Benefits of Trading Software
Flexibility
Trading platforms are flexible. Customization on multiple items like resistance lines, sector comparisons, indicators, and others is available. Users can save the customizations and edit them accordingly.
Several trading platforms have app-based platforms that help investors get access directly with the help of laptops, smartphones, and other devices. With the introduction of e-trade, keeping track of online brokers, stocks and exchanges became easier.
Rapid Switching
With an online trading system, computer switching between stocks becomes easier and faster. Using a website that promises similar services may take time to flick through multiple stocks simultaneously because users will need to download separate web pages for each stock. Switching between stocks is crucial while using swing or day trading software.
Lower Fees and Transparency
Investors spend more money on traditional trading than on online stock trading tools. If an investor trades in large volumes and invests via reliable online brokers, it is feasible to negotiate the broker's fees in online trading.
The online stock trading software offers transparency as well. The shared details from the investor's online trading account display the extra charges like taxes, brokerage platform charges, and many others added to every transaction from their account. As a result, the investors get more clarity on the calculations for their day trading.
Time-Saving
The stock trading software saves users time compared to using a website. With the stock trading software, users realize the profits of the stock market. It also provides essential trading signals. For example, it recommends selling or purchasing foreign currency based on specific factors.
Moreover, the option "stop order" automatically stops selling stocks when the price charts drop below a set value in auto trading software. The trader must distinguish the opportunities provided by such a stock trading system to maximize his profit.
Features of Trading Software
Technical Analysis
The trading software offers users various tools to check stocks and trends in security movements, like classic chart patterns, technical indicators, and interactive charting.
Real-Time Data and Historical Data
Real-time market data is essential for traders to keep a check on short-term price movements. A slight variance between the actual price and the quote of the security may lead to profit, or users can even lose money.
Historical data also plays a crucial role as the price of security moves in identifiable trends and patterns that repeat over time.
Placing Trades
Many auto trading software can place trades like limit orders, market orders, and other advanced charting order types. Placing trades also allows you to view real-time data and the Level 2 order book.
Backtesting Software
Using historical data feeds allows testing of a given trading strategy that serves as a step of verifying the effectiveness of the process. It simulates the trading strategy within a specific period and analyzes the results from the perspective of return and risk.
Analytical Strategies and Methods
In active trading, traders use various strategies, including swing and day trading. In swing trading, users hold security for one to several days in a bid to profit when the price charts change. In day trading, the position closes within the same day.
Swing traders use to set rules based on technical analysis and fundamental analysis.
Programmatic Trading
Traders develop trading systems using advanced software that executes automatically rather than clicking any manual button. The software solutions also offer backtesting functionality that allows traders to test their automated trading software's performance when given specific commands.
Stock Screener
Stock screeners are trading tools traders use to filter stocks based on specific user-defined criteria.
Paper Trading
Paper trading is a virtual money trading functionality with no substantial risk. It does not require actual money trades. So users do not lose money. In paper trading, users can test their skills and abilities with virtual money and e-trade rather than indulging in actual capital. It is a common feature among brokers in the forex trading market.
Types of Trading Platforms
- Commercial Platforms
- Proprietary Platforms
Commercial Platforms
Commercial platforms are for retail investors and day traders. The commercial platforms come with multiple helpful features like live interactive charts, survey tools, educational content, international news feeds, and real-time quotes.
Proprietary Platforms
Proprietary platforms are designed by large brokerage account businesses and other financial institutions for their personal and active trading activities. Proprietary platforms imitate the requirements and trading styles of electronic brokerage services. The proprietary platform trading privileges are not available to the public.
How are Trading Platforms Useful?
Within the network-based environment, active traders can electronically negotiate offers based on transaction parameters and multiple other terms and conditions to satisfy both parties.
A trading platform offers functions and advanced features that make real-time interaction with trading partners possible.
Mostly, the platforms have numerous additional features like premium research information, real-time data quotes, and charting tools to enable real-time availability of trading strategies or news feeds and warrant smooth negotiation between and among traders.
Moreover, it also offers customization to suit the unique needs of particular market data like currencies, futures, and forex, data feeds, stocks, and options trading.
Trading system platforms also offer plenty of choices for managing and executing trade ideas by providing capabilities that suit each market data's needs. Moreover, professional traders can utilize trading platforms for free or at a discount, depending on the financial intermediary.
Trading privileges subject investors to buy and sell shares quickly at one place according to their convenience. It also offers an easy-to-use interface with immediate order entry screens for beginning investors.
Key Considerations While Selecting Trading Platforms
Provider
Some trading system platforms are not connected to a specific broker. Similarly, some trading systems are available when investors work with a particular broker. So, investors must ensure the reputation of the typical broker or intermediary before committing to an advanced platform to manage accounts and execute trade ideas.
A provider must back the past performance and stand solidly behind everything a platform offers.
Features
Features are essential when choosing a trading system platform. Investors and traders must ensure that the platform's features meet their trading ideas. Short-term and day traders may require features like a subscription-based model providing real-time access to the NASDAQ order book, also known as Level 2.
Day trading may also require features that offer access to market-depth information like order size, price levels, and volume to assist them in timing their orders. Day trading may also need technical analysis tools like life charts offering a range of technical indicators. Finally, the pattern day trader will need tools mainly developed to help them analyze, research, and test their trading strategies.
Requirements
The online trading platform has specific requirements to open an account and trade. For example, day trading system platforms may require that the traders have a minimum of $30,000 in equity to be approved for margin account trading.
The options trading may require the traders to be approved of multiple options before using the trading system platform.
Fees
When choosing a trading system platform, fees are also essential. For example, if traders employ scalping as a trading strategy, they will gravitate towards platforms with low costs. Though low fees are always preferable, there can be trade-offs to consider. For example, low costs will not benefit situations with fewer or less powerful features.
What are Some Popular Trading Software Platforms?
TD Ameritrade
TD Ameritrade offers the best online stock trading for long-term investing and retirement planning. TD Ameritrade is a famous brokerage account for both investors and traders that falls under the Charles Schwab Corporation. TD Ameritrade is now known as Charles Schwab futures and Forex LLC.
Interactive Brokers
Interactive Brokers ranks among one the top ta in the online broker's review. It is one of the best trading platforms for professional e-trade. It has low fees and access to numerous markets around the globe. Interactive Brokers are best for global stocks.
RobinHood
RobinHood is mostly a commission-free trading system platform. It started as a mobile trading app but now has a web interface. RobinHood is one of the best stock trading software for beginners. The platform makes money by selling order flow to large brokerages, from interest on cash in its accounts and multiple other sources.
TradeStation
TradeStation is a popular platform for algorithmic trading that executes trading strategies using automated scripts developed with EasyLanguage.
10 Best Trading Software for Professional Traders
Brokerages offer free trading systems and also discounted ones. In addition, it is sometimes offered as an incentive to elicit a certain amount in trading volumes.
The best stock trading is not limited to technical analysis, screeners, spreads, and in-depth research tools. The best-performing online stock brokerages are necessary for advanced traders to make the best trades.
While there is numerous online trading software available in the market, some of the best options for trading software include:
- CenterPoint Securities
- Zerodha Kite
- Advanced GET
- Ninja Traders
- Upstox Pro
- Pines
- Moomoo
- Webull
- Zen Trading Strategies
- TradeZero
CenterPoint Securities
With CenterPoint Securities, traders get direct market access and powerful online trading software for high-volume, short, momentum, and advanced traders. In addition, it offers advanced charting, advanced order routing, level 2 order management, custom alerts, and built-in scanners.
Zerodha Kite
Zerodha Kite is the best trading software in India. It uses next-gen technology and offers a wide variety of features like data widgets and integration with third-party provider apps to make trading simple and fast. It is the best software for the Indian stock market. It also tops among the online broker review rankings.
Advanced GET
Advanced GET has full access to trending technical analysis tools and is used by professional traders in over 5O countries. Advanced GET trading software price is $4,214 for one-time use. Advanced GET software is a good option whether you trade on penny stocks, mutual funds, or particular stocks.
Ninja Traders
Ninja Traders is the best trading software for PC. It can access forex trades, stocks, futures, options trades, and contracts for differences (CFD). It is also a good option for equity trading.
Upstox Pro
Upstox Pro is considered one of the best trading software in India among investors and traders. Trade execution with this app is easier and faster. It is automated and free to use when users have trade ideas and are ready to place a trade.
What is the Cost of Trading Software?
The cost of auto trading software varies from one to another. However, to estimate the development and costs of auto trading, the following points are crucial:
- Research and discovery
- Development approach formulation
- User interface design
- Development process
- Maintenance, testing, and delivery
The development costs are usually estimated by the software's complexity, analytical tools, features set, cloud services, technical tools, etc.
Creating an auto trading for mobile takes 5-10 months. Considering all the factors, the total price of a share market trading can be around US$25,000 or US$300,000. And the total cost for developing mobile high-frequency trading software can be around US$55,000.
Investing VS Trading
Investing is a long-term approach to gradually earning wealth over time using schemes like mutual funds, buying and selling a portfolio of bonds, a basket of stocks, etc.
On the other hand, trading is a short-term process involving frequent transactions based on current trends and market volatility.
It depends on the user whether he wants to invest or trade. Trading involves more risk than investing as it is a short-term approach. Though both have profits, traders earn more profit than investors when the market scanner finds actionable chart patterns and performs accordingly.
