Investment analysis tends to fall into one of two broad areas—fundamental and technical. Fundamental analysis attempts to find the value of a security, most often a stock, by examining the underlying factors affecting the company’s business and its future prospects. Fundamental analysis includes examining the income statement and balance sheet, a company’s competitive position within its industry, and the quality of its management.
Technical analysis, in contrast, involves analyzing the market activity of a given security—namely historical prices and volume. Unlike fundamental analysts, technicians are not concerned with “fair” or intrinsic value. Instead, they use charts and technical indicators to identify patterns that suggest future price movements. In addition, technical analysis lends itself to a variety of securities—not just stocks—including mutual funds, exchange-traded funds, futures, and options.
Today there are a number of programs on the market that will automatically retrieve price and volume data on a universe of securities. Instead of having to manually record price and volume data and plot charts and indicators by hand, there are a number of programs that can automate the process for you. Being free of this arduous work means you have more time for your analysis.
Given all of the choices you have when it comes to technical analysis and charting software, it is vital that you identify the type(s) of analysis you wish to perform as well as the securities you wish to trade and purchase a program accordingly. In order to know whether a given program will serve your needs, it is also a good idea to familiarize yourself with the features and functionalities of a variety of packages.
This comparison of technical analysis and charting software covers packages catering to our typical reader. We have focused on the programs offering the functionality sought by the average technician and trader. For this reason, we have attempted to stay away from “pure” trading platforms as well as niche products focusing on a singular analysis technique.
The 11 programs in this year’s comparison (some programs have multiple versions) cover the spectrum—from free “shareware” products to programs costing hundreds of dollars. They all analyze stocks, provide charts, and offer a library of technical indicators. You can use all of these programs for end-of-day analysis, while several also handle intraday data on either a delayed or real-time basis.
The comparison grid on pages 14-17 examines the key features you should expect to find with a robust charting and technical analysis platform. Unlike in our past comparisons, we are no longer running a table of technical indicators for each program. Instead, where available, we offer a link to the company’s respective Web sites where you can find list of indicators currently available.
While we discuss the latest versions of each program available at the time of this writing, it is always a good idea to verify features with the company before buying.
Reviews of individual programs begin on page 13 and the ratings table is presented on page 25.
With any type of investment analysis, the results of your labor are only as good as the inputs used. In the case of technical analysis, price and volume data are the focus.
Some programs are tied to a particular data vendor and charge a monthly or annual fee for use of the program and for access to data. Others give the user the option to find a compatible third-party data vendor. In these instances, be sure to budget for the additional cost of the data and don’t be surprised if, over time, data costs exceed the initial purchase price of the program.
The following are some of the common data issues you will have to consider when purchasing a technical analysis and charting program as well as seeking out a data vendor.
Price and volume data, the key inputs of technical analysis, can be delivered to the end-user on either an end-of-dayor intraday basis. End-of-day data summarizes activity during the course of the trading day. A single day’s trading data usually consists of the opening (first trade) price, the highest and lowest prices of the day, the closing (last trade) price, and the total trading volume (number of shares or contracts bought and sold over the course of the regular trading day).
End-of-day analysis typically involves analyzing price and volume data over many years, perhaps decades or more. For this reason, most end-of-day technical analysis programs offer a historical price and volume database. This will save you the time, and perhaps money, it would otherwise take to establish an effective historical database before beginning your analysis. Otherwise, you will need to seek out a third-party source of data.
Ideally, even intraday programs offer a database to plot historical charts. Furthermore, a sufficient historical database is necessary for technical analysis programs offering the functionality of system development and testing.
In contrast to end-of-day data, intraday data provides periodic updates throughout the trading day on either a real-time or a delayed basis. Ultimately, your investment time horizon will dictate whether you require end-of-day or intraday data. Investors with longer time horizons should be able to make do with end-of-day or delayed intraday data, while short-term investors and traders would want to consider a real-time data feed in order to more closely monitor market movements.
Technical analysis programs that use data from third-party providers require you to choose a data provider as well as a technical analysis and charting program.
The programs highlighted here vary in their support of data vendors. Some programs, such as TeleChart from Worden Brothers, rely on a sole data source. These “self-contained” packages do not allow users to shop around for a data provider.
Others give users a wide variety of compatible data vendors from which to choose. AmiBroker, for example, supports 28 different data providers. When there is a broader selection of data vendors, you have a better chance of finding one that meets your exact data needs—and budget. The comparison grid indicates which data vendors each program supports.
You also need to be aware of a new trend among technical analysis and charting programs—the support of free data providers. A few Web sites, including Yahoo! Finance and MSN Money, have offered free downloading of price and volume data for several years. Recently, some programs have begun offering the ability to retrieve historical price and volume data, en masse, from these sources. The implications for the end user are difficult to ignore. Whereas in the past it may have cost hundreds of dollars to establish a reasonable historical database from a fee-based data provider, you can now do this for free. Amibroker, Investor/RT, SpiffyCharts, and StockShare all allow you to download data from free data sources.
Data Importing & Exporting
|Charting||Indicators/ Drawing Tools||Trading Systems||Screening/Sorting||Documentation||Ease of Use||Software Cost (AAII Discount)||Pros||Cons|
|AmiBroker||3||4||3||5||4||4||$189, Standard||+Attractive price given||–E-mail support only|
|www.amibroker.com||$259, Pro||program features||–Cannot plot custom date range|
|+Direct downloading from||–Only one predefined trading|
|free historical data providers||system|
|+Can create market comment|
|for custom indicators|
|+On-line video tutorials & forums|
|HotlineX||4||3||2||4||3||4||$199/yr.,||+Expert Trading & Day||–Does not offer system|
|www.trendsoft.com||lease;||Trader models offer trading||optimization|
|$59/mo.,||recommendations||–Cannot create custom indicators|
|data||+Candlestick pattern recogn|
|+Handles real-time data|
|Investor/RT Standard||5||3||na||4||4||4||$19+/mo.||+Extensive portfolio mgmt||–Pro only offers sample trading|
|Investor/RT Backtester||5||5||2||5||4||4||$39+/mo.||+Highly regarded tech support||–Ability to create indicators|
|Investor/RT Pro Complete||5||5||3||na||4||4||$49+/mo.||+Runs On both Windows & Mac||only in Pro|
|www.linnsoft.com||-20%||+Direct downloading from||–Separate modules for systems|
|free historical data providers||backtesting & optimization at|
|MetaStock End of Day||5||4||5||3||5||5||$499, software;||+Free on-line classes &||–OptionScope for basic options|
|www.equis.com||$59/mo. or $565/yr.,||user groups||analysis only|
|software &||+Expert Advisor||–System-testing capabilities not as|
|end-of-day data||+Nine chart types||robust as some other programs|
|-10%||+data useable in numerous|
|OmniTrader Stocks||1||4||2||3||5||4||$495||+Game Mode and Lab Mode to||–Custom indicators and trading|
|OmniTrader Futures||1||4||2||3||5||4||$695||test trading ideas||systems only available in Pro|
|OmniTrader Real Time||1||4||2||3||5||4||$995||+Adaptive system optimization|
|OmniTrader Pro||1||4||3||3||5||4||$1,995||+Trading Assistants show and|
|www.omnitrader.com||($200)||describe technical patterns|
|Personal Analyst||4||3||na||2||3||4||$159, software;||+Computer-gener’d trendlines||–Expensive without offering|
|www.trendsoft.com||$15/mo., lease;||+Slide show of charts||trading systems or ability|
|$39/mo., lease & data||+Candlestick pattern recogn||to create custom indicators|
|Personal Hotline||4||3||2||4||3||4||$389, software;||+Automatic trendlines||–Cannot create custom indicators|
|www.trendsoft.com||$29/mo., lease;||+Candlestick pattern recogn||–Does not offer system|
|$59/mo., lease & data||+Expert Trading & Day||optimization|
|(10% software)||Trader models offer trading|
|Pro Analyst||2||3||1||1||3||4||$99/yr., software||+Extensive historical database||–Lacking DayTrader module|
|www.trendsoft.com||lease;||provided||available in Trendsetter’s|
|$59/mo., data||+Computer-gener’d trendlines||end-of-day software|
|+Pivot points automatically||–No screening mechanism|
|+Handles real-time data|
|SpiffyCharts||2||3||4||2||1||2||free||+Compat w/ Win, Mac, & Linux||–Provides only line & bar charts|
|www.spiffycharts.com||+Free software offering custom||–Not as user-friendly as other|
|indicators & system develop &||programs|
|backtesting||–Unsure of program’s future|
|StockShareV2||2||2||na||na||3||4||$349.99,||+Access to over 130,000||–Does not allow custom indicators|
|www.stocksharepublishing.com||first license; $99.99, each||symbols worldwide||–Cannot plot custom data range|
|add’l license||+Direct downloading from Free|
|historical data providers|
|+On-line users forums|
|TeleChart 2007||3||5||na||3||4||5||free, software;||+Educational Worden Notes||–Fixed amount of data|
|www.worden.com||$29.99/mo., Gold||+data useable in numerous||–Platinum lacks NASDAQ Level II|
|$89.99/mo., Platinum||+Platinum On-line forums||–Lacking documentation for some|
If you already have a database of historical price and volume data, it may be worthwhile to note the data formats you can import into a given program. This functionality can also save you time and money since you do not have to start over from scratch. MetaStock and TeleChart (Worden) are two industry standards when it comes to data formatting and many programs support the importing of such data. In addition, ASCII and CSV text formats are popular.
Other types of programs can make use of historical price and volume data, including portfolio tracking and management software. This is where data exporting can save you time. If you hope to use your data in other programs, be sure to check the export formats of a technical analysis program and see whether you can import data into other programs you use.
Split, Dividend & Distribution Adjustments
Since the accuracy of charting and technical analysis is all predicated on the accuracy of the underlying price and volume data, it is important that the data you are using correctly reflect certain events or, at a minimum, allow you to easily adjust the data for these events. These include splits as well as dividend and distribution payments.
Programs that automatically adjust for stock splits will back-adjust any historical data you already have when a stock split occurs.
If you are a regular reader of CI, you know that several readers over the last year or so have raised concerns over adjustments some data and charting services make, especially dividend and distribution adjustments for stocks and mutual funds.
Some data providers and charting services adjust historical stock and mutual fund data downward to reflect dividends and fund distributions. As a result, if you were to compare long-term charts for a dividend-paying stock or a mutual fund with large periodic distributions the services that adjust downward will show chart levels going back several years that are lower than charts from other services that do not downward-adjust historical data.
While a chart that has been adjusted for dividends or distributions does not reflect the historical prices at which you could have bought and sold the security, it does reflect the equivalent prices at which it traded. Such adjustments allow the user to more accurately track price performance over time.
Almost all of the programs in this comparison automatically adjust data for splits, dividends, and distributions.
Data merging gives you the capability to bring together the data of two or more securities to create a custom index or security. For example, you can merge the prices of Google and Yahoo! to create an Internet index. AmiBroker, Investor/RT, and MetaStock are the only programs here that offer this functionality.
Chart analysis is an important aspect of technical analysis. Many technicians focus solely on charts to identify patterns that may indicate future price movements.
There are numerous chart types used today, and the programs here differ in the types of charts they offer.
The most common chart types are line and bar charts and all of the programs in this comparison offer these two chart types. Line charts plot a single price point—usually the closing price—over time. In contrast, bar charts may show up to four data points for a given period—the open, high, low, and closing OHLC price for a day, week, month, etc.
Some other common charts you may run across include candlestick, equivolume, and point & figure. A proper discussion of these charts is beyond the scope of this article. However, you can find articles dealing with charting in the on-line Computerized Investing archive (www.computerizedinvesting.com).
No matter which chart types you use, be sure that any technical analysis program you are considering supports them.
A chart template or layout allows you to specify the characteristics of a chart, such as the time period displayed, data periodicity—daily, weekly, monthly, etc.—chart type, and any indicators or drawing tools you wish displayed. Programs that allow you to create custom templates generally allow you to save them for future use as well.
Templates are especially useful if you view multiple securities in the same manner. Instead of having to specify the chart characteristics for each security, all you need to do is specify the security and apply the template and the program does the rest.
OmniTrader is the only program covered in this comparison that does not allow you to create your own chart templates or layouts.
A technical indicator is the mathematical manipulation of price and/or volume data, which is then typically displayed on a chart. The number and type of indicators built into a program are important factors to consider when selecting a technical analysis program. However, the raw number should not be the sole consideration. Instead, the emphasis needs to be on ensuring that the program includes the indicators important to your analysis—more is not necessarily better. Do not automatically write off a program just because its indicator library doesn’t appear to be as robust as other programs.
SpiffyCharts and TeleChart offer the smallest collection of technical indicators and line studies. However, for the majority of would-be technicians, these comparatively small libraries are more than enough. For this reason, it is helpful to take a moment to consider your analysis needs when assessing the number and type of indicators you will require in a program.
However, the more you wish to experiment with different trading strategies, the greater your need for a program with a more extensive set of technical indicators.
When available, the comparison grid on pages 14 to 17 has a link to the Web sites of the various software companies listing the technical indicators each program offers.
Beyond providing a set of predefined indicators, with default values used in calculating them, the ability to modify indicators to fit your particular trading needs and style is a useful feature. Modifications allow you to adjust factors such as the number of time periods used in calculating a given indicator. For example, the most common time periods for a daily moving average are 50 and 200 days, but programs allowing modification of indicators give you the opportunity to adjust the period to one you are interested in.
Beyond making use of the predefined indicators that come “right out of the box,” savvy technicians may follow technical indicators they have created themselves. Trade publications such as Technical Analysis of Stocks & Commodities regularly publish new indicators or variations on existing indicators. To make use of these, some of the more advanced programs allow you to create custom indicators. While the methodology differs across programs, in general you enter a formula into a spreadsheet-like module or use a “wizard” that walks you through the creation process.
When you hear the term “screening” you are probably reminded of fundamental screening—isolating companies using quantitative filters based on fundamental criteria—such as ratios, multiples, and growth rates.
In generic terms, screening is the method of taking a large universe of securities and narrowing it down to a more manageable number with similar characteristics. Within the context of technical screening, you are isolating securities that exhibit certain technical properties, such as price and/or volume behavior, moving average breakouts, or overbought or oversold conditions based on various indicators. Users are typically able to specify both the universe they wish to screen and the criteria they wish to use; the program will then generate a list of securities matching the criteria. Depending on the program—such as TeleChart 2007—you may also be able to perform screens using fundamental criteria. Of the programs discussed here, only Pro Analyst from Trendsetter and StockShare do not offer technical screening functionality.
Another useful feature is the ability to receive alerts when certain “technical” events take place. These events can include meeting a specific value for a technical indicator, a technical system generating a buy or sell signal, or even violating a trendline. Programs may give you the option of selecting groups of securities to watch—such as those held in a portfolio or a “watch list” of stocks—and then alert you when any of the prices move by a certain percentage (up or down), or if pre-determined price levels are met. These alerts can take the form of on-screen pop-up windows, E-mail alerts, or messages sent to a pager, cell phone, or hand-held device.
Like all types of security analysis, the end goal of technical anaysis is to arrive at a decision as to whether to buy or sell. One of the benefits of computerized analysis is a reduction in the time it takes to arrive at this decision point.
Many traders develop trading systems—sets of trading rules for when to buy, sell, short, and/or cover—based on technical indicators, and they use a technical analysis program to indicate automatically when these rules are triggered. The rules underlying a trading system can involve a single indicator or a collection of confirming indicators matched to specific market conditions. Generally, you tend to find trading systems in the higher-end technical analysis packages. Among the programs in this article, roughly half offer some level of trading systems.
You may also then be able to modify these systems to match your own trading patterns and the securities you track. For the most advanced traders, there may also be a need to develop your own technical trading systems. Some packages allow you to build systems from scratch using proprietary programming languages or wizards that walk you through the process.
When developing a new trading system, it is useful to test it using historical price and volume data to get an idea as to how it may perform going forward. To backtest a system, users specify a time period in the past and the test provides an indication of how the trading system would have performed over that period.
It is important to implement assumptions that mimic the “real world” as closely as possible when you backtest a trading system. To add realism to a trading system, and provide more realistic performance statistics, programs allow users to account for such items as slippage (the amount by which a security price may move between the time you place an order and when it is actually filled) and broker commissions. Other items to consider are stop-loss methods, user-defined entry and exit points, and whether you wish to trade on long positions, short positions, or both.
The final element of system backtesting is optimization, where the program identifies the optimal variables that generate the highest gain or smallest loss for a trading system over the test period. For example, assume a basic system that buys when the price closes above the 50-day moving average and sells when the price closes below the 50-day moving average. With system optimization, the program will test a set of period lengths used in calculating the moving average to find the period that yields the best performance. However, be aware of the popular saying regarding optimization: “You can torture the data until it tells you what you want to hear.” All but three of the programs here that offer trading systems also offer system optimization—the exceptions are HotlineX, Investor/RT Pro and Personal Hotline.
When analyzing the overall effectiveness of a system, it is useful to have access to system reports that provide such measures as rate of return, performance relative to buy-and-hold, maximum drawdown, and the profitability of each individual trade. These reports allow you to see the transactions you would have made if you were following the system and measure the success (profitability) and riskiness of the strategy over the testing period. The ability to rank and compare trading system performance is a valuable tool for finding out how different systems perform in different market conditions.
It is easy to fall into the trap of thinking you can extrapolate past performance into the future. However, it is important to keep in mind that backtesting only informs you of how the system would have performed over a specific time period, if you had traded the system exactly as it was defined. There is no guarantee that these identical conditions would exist in the future, or that you would be able to mechanically trade the system without letting your emotions take hold.
Technical analysis programs tend to be some of the more complicated software packages you will run across. Therefore, you want to make sure you have the resources to get to know the program.
The best way to learn a program is to roll up your sleeves and dive right in. However, the learning curves for these programs differ greatly. Therefore, it would be nice to have time to test drive your investment and, if necessary, return the product for some rebate if you find it does not meet your needs or is beyond your computing skills. All of the programs here either offer a demo version of the software or a money-back guarantee.
Some programs, including Investor/RT, MetaStock, and OmniTrader provide multimedia tutorials that walk you though the key features of the program.
No matter how computer savvy we think we are, inevitably we run across a function in any new software package that gives us trouble. When this happens, the support resources maintained by the software company can often mean the difference between a package ending up on the shelf collecting dust or becoming an integral part of our investment analysis toolbox.
The days of receiving printed manuals the size of a small-town phonebook are long gone. Today, when you run into trouble using a software package, you can usually refer to a help system within the program. If the program’s help system isn’t as helpful as you would like it to be, ideally there will be human support available through E-mail or telephone. All of the programs in this comparison offer, at a minimum, free E-mail support. Two packages—Investor/RT and StockShare—charge for telephone support depending on your needs.
Some software companies have even built on-line user “communities” where you can go and interact with fellow users. At these forums, you can exchange ideas relating to trading and gain insight on how to get the most from your technical analysis package.
AmiBroker offers a robust collection of features for a fraction of the cost of similar programs. This comprehensive technical analysis platform allows users to create and analyze their own technical indicators as well as test the effectiveness of these indicators in the context of technical trading systems.
The program’s analytical tools—including the Quick Review, Automatic Analysis, and Guru Commentary—add a powerful component to the program. However, equally impressive is their ease-of-use. The Quick Review window allows users to track a “watch list” of stocks using a variety of criteria, including price performance and fundamental data.
The Automatic Analysis feature tracks preset buy and sell rules for a selected group of stocks. With this tool, users can identify top-performing stocks within individual trading systems as well as determine the effectiveness of various trading systems with a certain type of stock. Automatic Analysis also offers backtesting and optimizing features for individual stocks as well as whole portfolios.
The Guru Commentary provides you with a description of the technical condition of a given market. For example, the commentary will tell you whether a stock is overbought or oversold based on the stochastic indicator. The Guru Commentary will also plot buy and sell signals on the chart you are following. Additionally, you can use the Guru Commentary to create custom commentaries using the AmiBroker Formula Language.
AmiBroker comes in two versions—Standard and Professional. The main difference is that the Standard version handles end-of-day data, while AmiBroker Professional is a real-time version. The two offer one of the largest collections of compatible data services—nearly 30 for end-of-day data. The program can also download data from such free end-of-day data providers as Yahoo! Finance, MSN Money, and Brite Futures, which can save you the literally hundreds of dollars needed to acquire an entire database from a fee-based service. AmiBroker also supports numerous international exchanges and securities.
AmiBroker offers the typical line, bar, and candlestick charts and provides a choice of over 60 technical indicators and drawing tools. The indicators are modifiable as well. One feature we wish the program did have is the ability to specify a date range to plot data.
Using the AmiBroker Formula Language, users can create custom indicators, as well as scans and trading systems. Like most programming languages, AFL takes getting used to, so plan to spend some time mastering it. To help you with the custom indicator-building process, registered users have access to an on-line library of over 100 custom indicators. You can scan the price histories of securities to identify buy and sell signals that match your trading rules. There are also explorations that search the database and generate a list of symbols that match specified criteria.
One potential problem for “casual” technicians is that AmiBroker does not offer a library of predefined trading systems. The program is gaining in popularity, so you can now locate systems from trade magazines and on-line sources. However, this requires you to program these systems yourself.
Once you have programmed a trading system, AmiBroker allows you to test systems on portfolios of symbols as well as to optimize a trading system. The program also generates backtest reports that highlight such things as a system’s net profit, average win and loss percentages, and maximum drawdown.
The program even provides a portfolio manager that tracks buy and sell dates, prices paid, and quantities bought or sold to track performance. Users can also track cash balances and dividend payments.
Users wishing to speak to a support technician will be disappointed that AmiBroker only offers E-mail support. However, most outlets report responses within 24 hours. There are also several active message boards at Yahoo! Finance, and the AmiBroker Web site features numerous video tutorials along with an archive of the AmiBroker Tips newsletter.
Given its price point and functionality, AmiBroker fills an important niche between entry-level technical analysis programs and high-end trading platforms. However, to get the most out of AmiBroker, you must be willing to become a bit of a programmer.
Trendsetter Software was a pioneer in technical analysis software for the Mac. Today, the company saves Mac users from the frustration of not having quality technical analysis software at their disposal. In fact, with the apparent passing of ProTA and ProTA Gold, Trendsetter’s products are the only “pure” Mac programs in this year’s comparison.
Trendsetter offers four technical analysis programs—Personal Analyst, Pro Analyst, Personal Hotline, and HotlineX. The programs build on each other in terms of functionality, with an offering for almost every level of technician.
Personal Analyst and Pro Analyst offer many of the same features, including the ability to create bar, line, candlestick, and point & figure charts. With both programs, users have a respectable number of indicators and studies from which to choose—over 30 in all. Despite this solid library of technical indicators, more advanced technicians may be disappointed to learn that none of Trendsetter’s programs allow you to create custom indicators. Both Analyst programs can identify significant candlestick patterns and provide explanations of the patterns.
The Analyst software also offers computer-generated trendlines that automatically track and chart significant highs and lows. This is a feature lacking from most other programs in this comparison. Both Analyst programs will generate alerts when these trendlines are violated. You can also manually draw your own trendlines. Other studies that the programs can plot automatically include Fibonacci, Gann, and speed lines.
With Personal Analyst, users can perform technical screening: You just specify the criteria you are interested in and the program scans the database of stocks for those that meet your rules. Furthermore, you can apply multiple technical indicators and studies to a list of securities and Personal Analyst will produce numerical ratings to aid in the trading process.
Personal Analyst offers three unique chart templates: equiview, compare, and general market (Pro only contains the general market template). The equiview template displays two years of price data, which is useful for displaying seasonal tendencies in the price activity of a stock. The compare template allows you to display up to four separate securities for easy comparison. Lastly, the general market template displays an advance/decline line, up volume versus down volume, the TRIN, McClellan oscillator and summation index.
The Analyst programs also contain a master analysis report that includes a technical summary showing how your securities performed for the day, candlestick pattern alerts, and results of Analyst’s ratings systems.
Pro Analyst and HotlineX are Trendsetter’s real-time software packages, offering data elements not found in Personal Analyst or Personal Hotline—tick data, trade volume and size, time and sales, streaming news headlines, and a personalized ticker tape. With both programs, users can create bar, line, candlestick, and point & figure charts in timeframes ranging from one minute to monthly that are updated dynamically as trades occur. The software also allows you to work off-line for end-of-day analysis. Market Pulse reports in Pro Analyst and HotlineX can display over 75 pages of statistical indicators pertaining to all major exchanges, including most actives, new highs and new lows, index statistics, currency and futures markets, and more. Interestingly, Pro Analyst does not offer technical screening, a feature found in its three siblings.
The next product on the Trendsetter “ladder” is Personal Hotline. The program builds upon the features found in Pro Analyst to offer high-end features geared toward active traders and investors (features also found in HotlineX). The personal trade tracking function summarizes your open positions on a daily basis and analyzes your trading results. The expert trading model (also in Pro Analyst) makes buy, sell, and stop-loss recommendations; tracks theoretical performance; and allows users to view past trading results such as winning trades versus losing trades, average gain or loss per trade, net profit (after commissions), and maximum drawdown. The day trader system (also in Pro Analyst) offers daily recommendations for commodities and stocks based on a system used by commodity traders. Personal system alerts allow users to build and test their own technical trading systems and receive alerts when trading opportunities appear. In addition, users can apply multiple technical studies to a list of securities, and the program will generate numerical ratings to help identify trading opportunities. However, neither Personal Hotline nor HotlineX offer the same system optimization functionality found in other programs with system development that appear in this comparison.
Trendsetter is an important cog in the technical analysis software industry, especially for Mac users. These programs easily fulfill the needs of the average technician, given their collection of technical indicators and line studies and analysis features.
Investor/RT, from Linn Software, is a powerful technical analysis package that offers the unique feature of being compatible with both the Mac and Windows operating systems. It offers practically everything an active technical trader would need—end-of-day as well as intraday analysis, several different chart types, custom indicator and trading systems creation, system optimization, order placement, and portfolio management functions. The program also supports one of the largest collections of data vendors of any technical analysis package. There are two versions of Investor/RT—Standard and Professional. Professional users have the ability to add modules for trading system development and testing (Pro Backtester) and for trading system optimization and deployment (Pro Complete).
Investor/RT offers several popular chart types, including line, bar, candlestick, and point & figure—along with a library of over 110 technical indicators. In addition, it provides candlestick pattern recognition. Users may select from any of the over 30 predefined patterns, and the program will mark each pattern’s occurrence on the display—even on an intraday basis.
For any trader, it is important to track open positions; however, portfolio management and tracking capabilities in a trading and analysis package are considered added conveniences. Investor/RT can track long or short positions and gains and losses on stocks, mutual funds, futures, and equity/index options. The system also tracks transactions such as cash, dividends, commissions, and interest in order to calculate the annualized rate of return for each open position. However, one missing feature is year-end tax reporting.
Investor/RT supports a wide variety of data feeds through the Internet or satellite. In fact, users can choose from nine different data services. You can download historical quotes and fundamental data for free from Yahoo! Finance. The program has also integrated the Yahoo! Finance Stock Screener into its interface. At this point, screening criteria are limited to price range and average volume, with additional criteria promised for the future. The resulting tickers from a screen can then be imported into Investor/RT. You can download 19 different key statistics/fundamental values as well as sector and industry names from Yahoo! Finance.
Investor/RT Professional offers all of the functionality of Standard plus several features for more advanced technicians. Chief among these features is LinnSoft’s Real Time Languagecapabilities. With RTL, users can create custom indicators, trading systems, and scans. Using the scan function, users are able to identify trading signals being generated. Scans can be based on technical indicators, fundamental data, and current or historical prices and can be run using tick or minute data as well as daily, weekly, and monthly data. Once a scan is completed, the results are presented in a quote page that can be sorted on a number of data elements. Professional also supports additional indicators that are fully reliant on RTL.
Users of the Professional software can purchase two additional trading system–related modules for an extra $10 to $60 per month, depending on whether you are using end-of-day, intraday, or real-time data.
The trading system development & backtesting feature that comes with Investor/RT Pro Backtester adds the tools users need to develop and backtest trading systems using RTL. Users can organize trading signals into a set of trading rules and then backtest these rules over any desired time period. To analyze the results of backtesting, this version also offers detailed reports. Lastly, the Pro Backtester module allows you to deploy trading systems as indicators on a chart with buy and sell signals.
The Investor/RT Pro Complete module rounds out Linn’s offerings by adding system optimization to its list of features. The trading system optimization feature allows users to backtest ranges of values for the variables used in the trading system to find the optimal values and periodicity. Once a trading system has been developed, backtested, and optimized, trading system deployment allows for the plotting of trading systems—in real-time or on an end-of-day basis—on a chart. With the trading system deployment module, users can set up “signal actions” that communicate trading orders when trading system rules are triggered. These orders can then be sent to simulated trading portfolios within Investor/RT or to real brokerage services.
Overall, Investor/RT has features and functionality that rival any of the high-end packages discussed here. Mac users will also appreciate having such a robust system at their disposal. A wide variety of both end-of-day and real-time data sources is an attractive feature for those wishing to “shop around” for a data provider. The ability to download free historical data from Yahoo! Finance is another welcome offering. Furthermore, Linn Software has done an excellent job of producing on-line tools to educate their users on how to use the software. Combine all of these features, and you have a CI editor’s choice.
MetaStock, from Equis International (a Reuters company) has been a constant in the technical analysis software arena for many years. A potent offering of technical indicators, charting capabilities, and system development and optimization tools, coupled with unrivaled ease-of-use, MetaStock has established itself as one of the most complete end-of-day programs of its kind. Over the years, this program has won numerous awards from leading trading publications and has long been a favorite of CI, earning it an editor’s choice designation.
MetaStock goes beyond the standard chart offerings of most charting platforms to offer nine different charting styles—line, bar, candlestick, equivolume, point & figure, Kagi, Renko, three-line break, and candlevolume. Chart windows are object-oriented, so you can perform any modifications to a chart or indicator on a chart by right-clicking on the appropriate area.
The program’s SmartCharts feature automatically saves your charts, along with the underlying specifications, so you do not have to recreate it the next time you open it—a valuable time-saving feature. You can also create chart templates that allow you to apply the same set of indicators and studies to different securities. You can even create a custom default template that is always used when you open a new chart.
MetaStock comes with over 260 technical indicators and line studies, arguably the largest library available. To help gauge the direction of the overall market, MetaStock offers over 90 “broad market indicators”—monetary indicators as well as momentum indicators for both the NYSE and NASDAQ.
If MetaStock’s extensive indicators library isn’t enough, you can also create your own indicators using the program’s indicator builder. You have over 200 mathematical, statistical, and technical operators from which to choose. MetaStock’s “programming language,” while requiring some getting used to, is similar to the syntax used in Microsoft Excel to write formulas.
The Explorer function in MetaStock allows you to find, compare, filter, rank, search, and list multiple indicator values for multiple securities, including stocks and futures. Users can view a list of securities that are generating buy or sell signals or that have broken through some predefined barrier dealing with price or indicator.
MetaStock also ships with a set of predefined scans, and you can create and save custom scans with the same programming language used to create custom indicators.
One useful educational tool for novices and experts alike is MetaStock’s Expert Advisors. These advisors—there are more than 60—help you interpret technical analysis signals. Expert alerts provide indications of when current market conditions meet your criteria. There are also Expert highlights that color-code individual prices or significant chart patterns. You can use these expert systems to receive text, audio, or video alerts when certain conditions are met. Using the indicator builder, you can also create your own market advisors.
MetaStock ships with over 50 trading systems and allows you to create your own trading systems, all of which can be backtested and optimized with the enhanced system tester. You can run one system on a single security, many systems on a single security, one system on many securities, or multiple systems against multiple securities. It also offers features such as the ability to change and edit variables in testing—entry and exit points, commissions and slippage—to help create a more realistic picture of the trading scenario’s results.
Despite offering such a powerful program, the developers of MetaStock have taken great pains to make sure the program is not overwhelming. The software is very user-friendly and offers a comprehensive on-board help system. In addition, the MetaStock and Equis Web sites offer user forums, video tutorials, and real-time chatting with technical support.
Users can purchase MetaStock End of Day and a subscription to the Reuters DataLink data service for $59 a month ($565/year), or they can purchase the MetaStock software along with The Downloader (Equis’ data downloading software) for $499 and go with a third-party data vendor such as Dial/Data or CSI. The Downloader automatically collects price updates, tests data for accuracy, checks for data errors, adjusts for stock splits, and reinvests mutual fund dividends.
MetaStock offers everything a seasoned trader needs—custom indicators, trading system development, backtesting, optimization, and scanning capabilities. However, it also offers ease-of-use and extensive educational resources to fortify any neophyte. When combined with Equis’ highly rated, and free, technical support, you have one of the top products for technical analysis.
OmniTrader, from Nirvana Systems, is unique compared to the other advanced software packages highlighted here. Instead of offering trading systems to complement a suite of analytic tools, OmniTrader is primarily an automated trading system. Much like a black box program, the software automates the analysis process and provides trading signals based on the analytic tools. However, the program is more of a gray box, as it shows you the basis of the signals and you can specify system parameters.
OmniTrader now ships with 66 pre-installed trading systems (Nirvana Systems, the maker of OmniTrader, claims there are over 120 systems, but they count end-of-day and real-time as two different systems).
However, with the brand new OmniTrader Professional version ($1,995), you can program your own trading systems (and technical indicators) and exit strategies. You also have access to five additional pre-built trading systems. OmniTrader Pro is an improvement over the former System Development Kit SDK. OmniLanguage, the programming language used in Pro, is based on Visual Basic .NET from Microsoft. Nirvana offers Pro users a dedicated Web site for downloading new trading system ideas gleaned from popular trade journals such as Technical Analysis of Stocks and Commodities, Active Trader, and Barron’s.
Beyond the OmniTrader Pro, there are three other versions of the program—stocks, futures, and real-time. The stocks edition handles stocks, mutual funds, and options on an end-of-day basis; the futures edition adds the ability to track futures, also on an end-of-day basis; and the real-time version combines the functionality of both the stocks and futures editions with real-time analysis capabilities. OmniTrader supports end-of-day data feeds from Nirvana’s OmniData, eSignal, Quote.com, and DTN.IQ. The real-time version supports eSignal, DTN.IQ, and Quote.com.
The cornerstone of OmniTrader’s analysis is the Personality of Markets Theory, which is based on the assumption that “trading systems fail when markets change personality.” The program attempts to overcome this possibility by applying a proprietary “adaptive reasoning model” that tests all of the trading models in the program against a given security to select the best-performing systems for each security. So instead of testing one system with a particular security, the programs tests 66, a unique feature among the services discussed here. The signals generated by the best-performing systems are displayed in a “vote line.” OmniTrader then “votes” on the signals generated by the top systems to arrive at consensus buy and sell signals. This process is ongoing, so the optimization results are dynamic, giving users a fresh basis on which to trade.
The program itself is nearly fully automated, offering a variety of useful and time-saving features. At the heart of this automation is the To Do List. Here, you can instruct the program to download historical and current price data and perform analysis for each symbol on the Focus List (the list of securities being analyzed by OmniTrader). With the To Do List, you can also manage the strategies in the program as well as edit the parameters of each individual strategy. Lastly, you can use the To Do List to specify the test periods applied to all the strategies in the profile. Once you have run the tasks on the To Do List, new trading strategy signals are displayed in the Focus List along with a statistical analysis of the efficacy of the strategy.
To give users time to familiarize themselves with the software and the trading process without risking real money, OmniTrader has a “game mode.” Here, the software randomly selects a symbol from the focus list and displays the chart and all associated trendlines, candlestick patterns, and trading systems the program has found most useful in analyzing that security, along with the corresponding vote line and consensus signals. To avoid any bias on your part, however, the identity of the security is not revealed. Moving one day at a time in the game mode, you can place trades and track the value of your account over time.
The other training module in Omni- Trader is the “lab mode,” which is similar to the game mode but allows you to trade a specific portfolio of up to 10 securities instead of only one. The futures edition automates the analysis process for futures contracts. It will roll over to the next contract automatically, build continuous contracts, and provide alerts to first notice days. Lastly, you receive seasonality graphs that show the seasonal tendencies of contracts.
The real-time version is compatible with intraday delayed and real-time data services. It also offers all the features and functionality of both the stocks and futures editions, in real time.
Beyond the typical on-board help system, you also receive the OmniTrader Education Series CD with 14 different video lessons on how to use the program. Additionally, there is an on-line forum where users can interact with fellow traders.
OmniTrader is a good choice for beginner and intermediate traders looking to learn about technical analysis and trading. However, it is disappointing that you have to pay to create custom indicators and trading systems. Those who don’t need these capabilities may be intrigued by the robust selection of trading systems and unique buy and sell signals.
SpiffyCharts is a David among Goliaths in this comparison. Given its functionality—custom indicators, trading system testing, development, backtesting and optimization—it is surprising that the software is free.
SpiffyCharts is the only product in this comparison that runs on Linux (along with Windows and Mac). Those interested in SpiffyCharts can download the software and register it for free (www.spiffycharts.com).
The software is a little lacking in the chart types it supports, as users can only plot bar and line charts. The developers hope to provide candlestick charting in future versions. Currently, there are 24 technical indicators and line studies to choose from, a very respectable number. Creating charts and applying indicators is not as intuitive as in other programs and takes some getting use to. In order to open a chart, you must specify the “model” or indicator you wish to plot on the chart. This creates a “worksheet” that consists of both the chart and a table with the underlying price and volume data and the calculations behind the indicator. From here, you can apply additional indicators.
For a free program, the ability to create custom indicators is an impressive offering. “User Functions” allow you to create your own indicators and functions and are text files containing sets of commands, which are used to generate new columns of data in the worksheets. The language used to create User Functions isn’t necessarily more complex than what is used with some of the other programs here, but the lack of a “wizard” to aid in the process does make things more difficult and time-consuming.
While the ability to create custom indicators is impressive, being able to create and optimize trading systems is even more so. Trading models allow the user to establish their trading rules—buy and sell commands—as well as set the variables for the model along with the ranges used during optimization. Once the backtesting and optimization process is complete, SpiffyCharts generates reports that contain a variety of statistics regarding the performance of your trading system.
The program supports three fee-based data services as well as data downloading from free services Yahoo! Finance and EODdata.com. You can also import ASCII-based data.
SpiffyCharts has taken major strides since it was first introduced a few years ago. While the ability to create custom indicators as well as system testing, development, backtesting and optimization place it on an equal footing with many of the programs in this comparison, it does lag in ease-of-use and support. In the past, the programmers funded the program through arrangements with third-party data vendors. However, since our last comparison they have added data downloading from free sources. Although the program was updated in November of last year, we were not able to reach anyone involved with SpiffyCharts at the time of this writing, so we wonder about the program’s long-term prospects. That being said, for as long as it is around it offers a powerful, no-frills alternative to the other programs in this comparison.
StockShare, a Windows- and Java-based application, is a solid option from StockShare Publishing in the realm of technical analysis and charting software.
StockShareV2 is designed using Tabs and Chart Pages, which at first are a little confusing. Tabs are separate windows or pages displaying charts, indicators, or combinations thereof. A Chart Page is one area of a tab, with each page containing separate price, volume, or indicator information. A three-page tab, for example, would have three different charts—perhaps a price chart on one tab, volume data on another, and an MACD indicator on the third.
For charting purposes, StockShare offers both open-high-low-close bar charts and candlestick charts. There is also a collection of 34 technical indicators and line studies. The program does not allow you to create your own indicators. In order to modify chart properties and add selected analysis overlays, all you need to do is right-click on the chart to display a pop-up window. One element you cannot fully control, however, is the date range of charts. You can specify ranges from one year up to 20, but cannot dictate a specific time period.
The Groups tab in StockShareV2 is a handy feature that allows you to organize stocks into groups based on factors such as sector, industry, or market capitalization. This is useful for those wishing to look at a large number of stocks.
A unique feature of StockShare is the risk/reward calculator. Here, users enter portfolio size and risk percentage along with entry, stop, and target price. Based on this data, the calculator determines the risk/reward ratio, the amount of capital at risk, the potential reward if the target price is reached, and the number of shares to trade. This serves as a useful money management and risk control mechanism.
StockShare does not offer backtesting in the same manner as some of the other programs mentioned here. Instead, the program’s backtesting feature is more of a “game” mode where you select where to stop the data and, based on the analytical tools at your disposal, decide what actions need to be taken. Users can then step ahead one day at a time to see whether their decisions yielded the expected results.
StockShareV2 accesses free delayed data feeds that are available over the Internet—such as at Yahoo! Finance, MSN, and Brite Futures. These feeds give you access to over 130,000 stocks, indexes, mutual funds, and commodities from over 30 countries. The program also can make use of MetaStock data and has an ASCII text importer.
StockShare is a good choice for beginning and intermediate technicians. Its collection of indicators, ability to collect data from free data sources, and reasonable price make it an attractive candidate.
Since its release in 1998, TeleChart from Worden Brothers has positioned itself as a solid contender in the technical analysis field to go along with its award-winning data feed. Over the years, it has evolved from being a simple program for the beginning technician to one of the most complete technical analysis and charting applications available for beginner and intermediate technicians. Its combination of solid charting and technical analysis capabilities, ease-of-use, and unique features has made it one of the most popular end-of-day products on the market today. It is also the final CI editor’s choice for technical analysis and charting software.
TeleChart is truly a free program. You can download the program from the Worden Web site (www.worden.com), or opt to receive the program through the mail, also for free. At no cost, you also get 20-plus years of historical data, free tutorial video set, free live on-line video training course, and free chart analysis lesson archive.
Although Worden markets its software for free and offers a substantial free historical database, to use the program with current data you must subscribe to a data service. Worden is also a data provider and TeleChart 2007 can only use Worden data feeds and data. Worden data has long been highly acclaimed and is compatible with numerous technical analysis programs. A Gold subscription, which offers end-of-day data, is $29.99 per month. A Platinum subscription for $89.99 per month gives you have access to unlimited real-time data and expanded features for TeleChart 2007.
The TeleChart 2007 database currently covers over 7,100 exchange-traded stocks (it does not track bulletin board or pink-sheet stocks), over 670 exchange-traded funds, and over 200 market indexes. Stocks are also divided into 239 Media General/Hemscott industry groups.
TeleChart 2007 offers 17 technical indicators, including some proprietary indicators that are exclusive to the program. If you wish to go beyond the provided indicators, you can program your own. Unfortunately, there is no “wizard” to walk you through the process and the program’s help system provides no useful information on the topic. However, the training CDs that come with the program show you how, so be sure to keep them as a reference.
One of the most interesting and useful features of the software is the Worden Notes, based upon the trading ideas of the Worden brothers—Don and Peter. Users can view the Wordens’ charts to use and to learn from their indicator choices and analysis ideas. The notes are delivered throughout the trading day, as well as at the end of the day.
With TeleChart’s Easyscan feature, you are able to locate symbols meeting custom search criteria. You can run scans against the entire Worden universe or against subsets—personal watchlists, industries, etc. Simultaneously, you can scan for long-term technical and fundamental conditions, as well as intraday conditions. The software comes with several predefined scans and users can save custom scans. Users will find predefined lists of index and industry components.
Subscribers to TeleChart have access to Support Chat, where you can communicate on-line directly with TeleChart support, as well as the Worden Discussion Forum and on-line knowledge base.
Beyond getting real-time data and charting capabilities, Platinum subscribers also get a number of features that Gold subscribers do not. Charts can be displayed in a variety of timeframes—tick; one-, five-, 10-, 15-, and 30-minute intervals; hourly; daily; weekly; monthly; quarterly; and yearly. Platinum service also offers access to over 40 real-time news and commentary outlets. One feature that is lacking is access to Level II quotes.
One of the more interesting Platinum features is that the software allows users to interact with each other. Platinum subscribers can join more than 100 public and private chat rooms or create their own. Here, users can discuss their own trading strategies, gain insight from others, and exchange links, files, and charts with other members. Platinum subscribers also upload files to the Platinum community as well as download files from other Platinum users.
TeleChart 2007 is an excellent program for those just starting out in technical analysis. The program’s ease-of-use will not intimidate new users and its collection of educational content, including the Worden Notes, provides real-world trading insight. More advanced users will also appreciate these issues, as well as TeleChart’s scanning capabilities.