5/1/2021 0 Comments Day Trading Software
Benefits include connectivity from anywhere, no manual installations of upgrades and no maintenance costs.
Day Trading Software Software Very PopularComputer applications have made it easy to automate trading, especially for short-term intensive activities like day trading, making the usage of trading software very popular.The debate continues over the profit potential that can be realistically derived from day-trading activities using online trading platforms, as brokerage fees and commissions are said to take away the major portion of available profit potential.It thus becomes very important to select the right day-trading software with a cost-benefit analysis, assessment of its applicability to individual trading needs and strategies, as well as the features and functions you need.Day Trading Software Manual Installations OfThese platforms often include automated trading based on parameters set by the day trader, allowing for orders to be sent to the market quicker than human reflexes. Choosing the right day trading software system requires understanding the costs and benefits of each offering and if you will maximize its functionality. Day-trading software constitutes a computer program, usually provided by brokerage firms, to help clients carry out their day-trading activities in an efficient and timely manner. They often automate analysis and enter trades on their own that enable traders to reap profits that would be difficult to achieve by mere mortals. For example, a day trader may find it impossible to manually track two technical indicators (like 50- and 200-day moving averages ) on three different stocks of his or her choice, but an automated day-trading software can easily do it and place trades once the set criteria are met. The features and functions available may differ from one software package to the next and may come in different versions. ![]() Any day-trading software will require a one-time setup of trading strategy along with setting the trading limits, putting the system on live data and letting it execute the trades. A simple example: Assume stock ABC is dual-listed on both the New York Stock Exchange ( NYSE ) and on Nasdaq. You are looking for arbitrage opportunities and there is a day-trading software available for it. Assuming both legs of intraday trade costs you a total of 0.10 per share for brokerage and commission; you aim to look for price differentials between the two markets in excess of that amount. So you set (say 0.20 or above) as the price differentiali.e., the software should execute a simultaneous buy and sell order only if the bid and ask prices on the two markets are differing by 0.20 (or more). Set the number of shares to be bought and sold in one order (say 10,000 shares). Say the software identifies that ABC has quotes of 62.10 on NYSE and 62.35 on Nasdaq (a differential of 0.25) for orders of more than the set limit of 10,000 shares. The day-trading software will initiate trade as it matches the defined criteria, and will send orders to the two exchanges (buy at lower priced and sell at higher priced). If everything goes well, this day-trading software will make ((62.35 62.10) 0.10 0.15) (10,000) 1,500 of net profit for the trader in a flash. Further enhancements in the above software may include stop-loss featuressay if only your buy trade gets executed but not the sell trade. How should the day-trading software proceed with the long position A couple of options can be included as enhanced features in the software. If no opportunities are identified in the specified time, square off the position at loss. Set stop loss limits and square off the buy order, if the limit is hit Switch to an averaging techniquebuy more stocks at lower prices to reduce the overall price. The above is an example of arbitrage where trading opportunities are short-lived. A lot of these types of day-trading activities can be set up through day-trading software and thus it becomes extremely important to select the right one matching your needs.
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