How to Use Trading Software

Many types of trading software are geared toward people of all levels of experience within the markets. Whether you are a novice or seasoned trader focused on one of the types of trading such as position trading or day trading, trading software exists for you. With online trading software, you can be your own boss or get expert advice on stocks any time, anywhere. You can review information pertinent to the next day's trading regardless of where you are. You can log into your account and start making money (or losing it) almost immediately without any prior experience in the stock market.

Difficulty: Easy

Instructions

Things You'll Need:

• Trading software
• Money
• Bank account

Choosing Software

1. Choose your software carefully. Some of the easiest-to-use trading software relies heavily on graphics rather than elaborate charts or spreadsheets to illustrate your commodities position within the market. Some trading software platforms, such as the one found at GnuTrade (see Resources), are designed to be entertaining as well as functional.

2. Try before you buy. Many companies such as Alpari for Forex (foreign exchange) trading offer demo accounts to teach you the platform. Most trading software allows you to practice with "play money" based on what is actually happening in real time in the market. This allows you to get used to the mechanics of the software even before you commit to purchasing or subscribing. Consider taking a few different trading software programs on a trial run before making a commitment.

3. Discern if the software is proprietary. If you want to use your own broker, this could be a problem. Some software, such as E*Trade Pro is available only with an E*Trade account. It is proprietary to the brokerage for which it is made. Some trading software will allow you to use your own broker or trade electronically without a broker.

4. Ensure the software fits your skill level and investment resources. Some software packages are sophisticated and brokerage firms can require you to have a minimum investment up to as much as several hundred thousand dollars combined with a frequent trading schedule to be able to use the trading software. This highly sophisticated software may allow you to do an in-depth analysis such as drilling down to specific companies based on criteria that you set combined with algorithms that consider such things as seasonal factoring or obscure supply and demand trends.

Using Your Trading Software

5. Log in to your trading software. Choose a market in which to trade (buy/sell). This may be a commodity such as gold or benchmark or government bonds or, perhaps, foreign currency. Some trading software, such as the one GnuTrade offers, even allows you to follow other traders and place your money to follow his trades.

6. Note the prices per share and minimum shares required to trade.

7. Analyze the market using the tools that come with your software and any other tools available to you such as the news.

8. Add up the price per share times the number of shares you would like to purchase plus the trade fee. Most software will do this for you and keep it in an accounting section.

9. Watch your trade. Some software can send you an email or page you when the stock goes up or down by whatever amount you tell it to, signaling you to buy or sell the stock. Some software will automatically buy or sell the stock without your assistance once you have set the parameters. This is a useful feature if you do not want to sit in front of your computer waiting for your stock to move.

Tips & Warnings

• Remember when choosing trading software, the site or software should be easy to navigate and understand. Just because someone you know has recommended software or service they think is great, if you can't understand it, it's worthless to you.
• Know all of your charges. Almost all software charges a minimum amount per trade (buy or sell) and these charges can add up quickly.

Resources

• Alpari
• Ameritrade
• GnuTrade