Charting software can be used by anyone who deals with buying and selling stocks. This may include:
As long as trading software provides accurate and relevant stock data, it’ll be of use to people whose jobs or investments are dependent on it.
No matter how experienced a trader or asset manager is, they’ll be naturally limited by their capacity to gather and process huge volumes of data. Stock charting software is therefore a must-have tool that simplifies pattern recognition and speeds up decision making.
Here are the main benefits of using charting solutions:
1. Clearly visualize past trends
A chart paints a thousand data points. Without mapping historical data onto a coherent visual, it’s difficult to make sense of it.
A considerable part of technical analysis is about reviewing past trends to inform future investments. Stock charting software is the best way to facilitate this, as it presents data points in a highly visual manner. This makes it much easier to evaluate historical performance and spot new developments.
2. Spot patterns
Depending on the exact market charting solution you use, you can expect a degree of help from its algorithms in recognizing patterns, generating trading ideas, and even making specific buy/sell decisions.
In many cases, you’re also able to set up custom, rule-based triggers based on your own preferences or analytical models. The charting software will then actively alert you when a trade is advisable, so that you can react accordingly.
3. Easily compare similar stocks
If you’re operating with a shortlist of potential stocks, you’ll need a way to compare them quickly to figure out which best suits your needs.
Stock charting solutions help you do exactly that. With this kind of technical analysis tool, you’re able to view similar stocks side-by-side in order to see the advantages and disadvantages of investing in each.
Using this kind of data-based comparison makes picking the right investment a more straightforward task.
4. Respond in real time
Some of the best stock charting software will provide you with real-time market data.
This is especially relevant for day traders who may be making numerous transactions within a single day in order to catch the right highs and lows.
However, even if you’re not focusing on a short-term horizon, having the most up-to-date information ensures that you don’t overlook any new developments when making the final investment decision.
5. Make objective decisions
Here’s an understated benefit of using charting software to make decisions: It ensures that these decisions are more objective. After all, traders and investors are only human, so they may well have biases related to certain stocks or tend to react emotionally to unpredictable market developments.
Technical analysis solutions help to eliminate or at least mitigate such subjective factors. By presenting only the cold facts, trends, and patterns, charting software helps to make the investment decision a calculated risk rather than a spur-of-the-moment reaction.
Researching market charting software may feel overwhelming. There are dozens of available charting platforms. In order to pick the right charting solution for your needs, consider the following:
First and foremost, you must decide which features you actually need. Many types of stock charting software offer differing options, including:
Deciding which features are important to your business will help narrow down your search.
Charting tools are built to reduce complexity. As such, make sure the tool you select doesn’t instead introduce a steep learning curve of its own.
You want to look for charting software that’s easy to set up and start using. Ideally, you’ll want a tool that doesn’t require cumbersome program installation and perhaps even works directly in any browser.
Live data comes at a premium. You’ll need to decide which time horizon your trading software operates with. Try to answer the following:
If live data isn’t a key factor, you’re likely better off with a tool that focuses on historical trends.
Most stock charting software will provide you with the needed standard views and charts right off the shelf.
However, if you’re interested in designing your own overviews and dashboards, look for a tool that lets you customize the views, alerts, level of detail, and so on.
If on-the-go access is important, you may want to consider a tool that offers a smartphone app. At the very least, you’ll want the charting software to have responsive design that ensures that it scales properly depending on the size of your screen.