CI Editors' Top Investment Product Picks 2006
by CI Staff
In each issue of Computerized Investing, we provide our readers with information on new and updated Web sites and software packages for investment education, tracking, and analysis. Each year, we distill the universe of computerized tools available to the individual investor down to our top picks for the most common areas of investment analysis and management: portfolio management, mutual fund screening and analysis, stock screening and analysis, and technical analysis and charting. These categories cover the needs of most of our members.
We present our top picks by highlighting selections for both Macintosh and Windows systems, as well as top Web offerings.
We have not limited our selections to the boundaries of software that needs to be purchased and installed on your computer (disk-based programs); traditional and Web-based tools were eligible for the top-pick slots in each area. This issue is of special importance for Mac users who often find that Web-based tools for screening and analysis exceed the usefulness and functionality found in the best Mac-based software programs.
The top picks represent the personal favorites of the editors of Computerized Investing. They are top-rated software programs and Web sites that we use ourselves on a day-to-day basis and can recommend to our members without hesitation. We have rated all our picks relative to the other services in the category using our standard scoring system and have tried to select products that meet the needs of the typical investor.
The software programs and services were judged in each of the following categories: performance, documentation, and ease of use. Performance rates how well the program or service accomplishes its stated objectives. Adjustments are made for specific areas such as fundamental screening, where the performance of the screening process is graded separately from the depth and quality of the data provided by the application. Documentation rates the quality of the printed materials, on-line help, and manufacturer support. Ease of use rates how simple the core application is to install, learn, and operate. Criteria are rated on a scale of one to five, with five denoting the best score possible. While all the factors are important, the greatest emphasis is placed on performance.
We have eliminated several software applications that are simply not geared toward the individual investor market. These products, which we consider professional software, go beyond the scope of the research and analysis conducted by the individual investor and, therefore, become quite expensive. The top picks presented here are not simply the most expensive products, or those with the most complex set of features. Rather, they represent what we feel are the best products suited for the typical individual investor in that area of analysis. Some of the programs are general purpose in nature, while others are more advanced applications. Most on-line tools pale in comparison to the sophistication and capabilities of software, but the on-line selections we’ve chosen here tend to be rather sophisticated Web tools.
All investors, no matter their investing techniques, must have a portfolio tracking system in order to properly monitor investments and make informed buy and sell decisions. A good portfolio management system can track the performance of individual investments, the interaction of the investments in your portfolio, the allocation and classification of your holdings, and the performance of your overall portfolio. Many also offer useful accounting systems that track the income and gains or losses on your transactions to help calculate the tax liability of your portfolio activities.
An important feature of a good portfolio management system is the ability to specify security lot assignments for any given transaction. Reinvesting dividends from mutual funds and stocks can mean tracking numerous lots (units traded) over a long period of time. The top systems mentioned here will automatically match buy and sell lots for different accounting strategies for the purpose of reducing tax exposure.
Portfolio return reports help you see a clear picture of how well your investments are performing. These portfolio managers are able to help you analyze the performance of individual securities, asset groups, and your portfolio as a whole.
Captool Individual Investor
By Captools Co.
$300; $60 for annual support license after first 12 months; a 20% discount for AAII members
Ease of Use 3
For investors who want to analyze the performance of securities and portfolio groups while maintaining accurate tax records, Captool is a great choice. Captool offers a number of versions ranging from the Individual Investor version priced at $300 to a Professional release that sells for $5,000. Captool has strict requirements for an investor to be considered an individual. If you do not meet these requirements, you will be required to purchase the Professional version.
Captool Individual Investor comes with 12 months of support and program updates. Support and updates cost $60 annually after the first year.
Captool basically has every feature an individual investor would ever want or need to track and evaluate investments. The program can handle a variety of securities: stocks, mutual funds, annuities, bonds (fixed, zero coupon, variable, Treasury, municipal), cash, GNMAs, CMOs, real estate, partnerships, options, and user-defined securities.
The program can also handle an extensive list of transactions including, but not limited to: buy/sell, short/cover, margin purchase, return of capital, cash and stock dividends, interest, phantom interest, capital gains distributions, reinvestments, splits, reverse splits, premium and discount bond amortizations, fees, commissions, spin-offs and mergers.
While some programs rely on a series of questions to record transactions, Captool relies on a transaction ledger that can be a bit daunting at first glance. However, those that stick with it will find the process rather intuitive. Captool also provides complete tracking and computation of cost basis. Lots can be assigned manually or automatically to minimize taxes or maximize gains. Taxes are estimated based upon customizable tax rate tables. Securities can be marked as tax-exempt on federal or local levels as well.
Reports are easily generated and highly flexible. Captool has over 60 report templates that draw from a wide range of data fields and portfolio statistics. Reports can also incorporate pie charts and valuation growth charts.
The program can examine the performance of individual securities, security groups, and the overall portfolio for user-designated time periods. The performance report can present the internal rate of return, time-weighted rate of return, or simple profit on an annualized or total return basis. Returns can be calculated on both an aftertax and pretax basis and fees or commissions paid over a reporting period can also be specified.
Captool provides integrated Internet data downloads from many popular Web sites, but does not offer the ability to download transactions from brokers.
Be prepared to invest some time into getting acquainted with a powerful program such as Captool. However, the program ships with a comprehensive manual and Captools offers basic support on its Web site. While experienced investors should find the program and its many features and capabilities helpful, novice investors may, at first, be overwhelmed.
Quicken 2007 for Mac
By Intuit, Inc.
Ease of Use 5
Quicken has been a long-time staple in the realm of personal finance programs and handles all aspects of financial planning and tracking, from checkbook handling to portfolio management. Quicken is the only true portfolio management software option on the Mac platform. A Windows version is also available, albeit more robust in its offerings relative to its Mac-based counterpart.
Intuit updates the program on an annual basis. This year’s updates focus on retirement preparation and include 401(k) management tools.
After installing the program, Quicken takes you through a series of questions designed to personalize your experience with the software. Then the program asks for financial information including checking, savings and various investment accounts. If you use Quicken to manage your checkbook and bills, the program will ask which institution you bank with and what your current account balance is. It can also connect to your institution’s Web site to download your account information directly into the program’s database. You can keep a detailed transaction register and use Quicken to reconcile your accounts with monthly statements.
Quicken also automatically updates investments such as mutual funds, stocks and 401(k) plans, as well as taxes in the same way that it monitors bills and checking accounts—by continually downloading investment information from brokerages. Downloads are available from over 1,600 participating financial institutions.
Current and historical quotes are also available for download and Quicken can notify you if a security’s price falls below or rises above a user-defined value. In addition, you can compare your performance versus market benchmarks and check news alerts to stay up-to-date on stories regarding your holdings. A capital gains estimator shows you the potential tax impact of selling your stocks and mutual funds before you make a trade.
Quicken also helps you set up a budget and provides advice on how to achieve many goals such as saving for your children’s college, building a house, taking a vacation, or buying a car. For Mac users, Quicken is the best option for portfolio management. From creating a simple budget or balancing your checkbook to tracking the tax impact on your portfolio, Quicken offers a tool set that will appeal to almost any investor.
By Morningstar, Inc.
Basic service free with Internet access; Premium Service, $14.95/month
Ease of Use 5
Morningstar.com is a comprehensive Web site that offers market news, stock and fund screening, portfolio tracking and security analysis. Much of the content is available for free, while the premium services—including more in-depth portfolio tracking and stock and fund screening—cost $14.95 per month.
You can track up to 50 portfolios with up to 100 stocks and mutual funds, 20 bonds and 20 cash positions in each portfolio.
You can import data from various software programs and Web sites including: Intuit Quicken software, Microsoft Money software, Microsoft Excel, Microsoft Money Investment Toolbox, Quicken.com, and Yahoo! Finance.
Portfolio price data is updated on a delayed basis. You can receive free daily E-mail updates with the market value of each of your portfolio holdings as well as links to related news stories. A wide range of additional E-mail alerts are available as well, including price movements, performance, and relevant changes in an investment—such as a stock split, dividend, change in earnings estimates for stocks, or changes in management style or expense ratio for mutual funds. Premium subscribers can receive notification of changes to the allocation or makeup of a given portfolio.
Custom views and reports can be created by choosing from a list of over 75 data points that include performance, risk, and fundamental criteria. You can add up to 35 criteria to each custom view. Reports allow you to compare performance among individual securities, as well as by asset class and investment style. You can also generate reports for single and multiple portfolios. Other portfolio interface views include intraday, fundamental, and gain/loss—which employs the specific-lot method for handling cost basis.
Morningstar.com also features a unique function for in-depth examination of your portfolios called an X-Ray. Ten different premium service X-Rays can be displayed, including asset allocation, style box diversification, stock sector, stock type, world regions, and fees & expenses. The unique stock overlap X-Ray analyzes the diversification of your portfolios across mutual funds and among individual security holdings. An X-Ray interpreter gives a detailed description of your portfolio’s asset allocation, performance, and diversification.
Another valuable tool is the risk analyzer, which evaluates how the securities in your portfolio interact and measures the overall risk of your portfolio.
In addition, Morningstar offers a wealth of data on individual securities. Most investors will find the analysis tools to be easy to use and helpful for monitoring portfolio performance. The site also offers a quality alternative for Mac users who are struggling to find a full-featured portfolio tracking service.
Mutual fund screening modules filter a universe of funds down to a reasonably sized group, making analysis easier. Fund quotes, data, charts, reports, and profiles are also found at these sites to help facilitate individual fund analysis.
Key features to look for when evaluating sites in this category include the number of funds in the complete universe, the number and types of fields that can be used for screening and sorting or ranking, and the conditions and values that can be specified for each screenable field. Also, consider the frequency of data updates and how often performance returns are made available, such as daily, weekly or monthly. Look for annualized returns over long time periods such as three, five or 10 years, in addition to returns for individual years.
Although owning mutual funds can be a cost-effective way to have a more diversified portfolio, the number of available mutual funds is constantly growing and currently there are over 50,000 different funds in existence worldwide, including over 8,000 funds in the U.S. Even the most experienced investor can feel overwhelmed by the vast number of choices.
Mutual fund screening can help lessen this burden by providing the necessary tools to pick the best funds to suit your needs. Screening involves choosing a set of criteria to find a group of funds with similar characteristics. While a basic screening process can be done using a financial newspaper, magazine or book, the screening process is most easily and thoroughly accomplished using a computer. Software programs often have high-powered and highly flexible screening capabilities as well as periodic data updates. Web-based screening tools are either downloaded to your computer or allow you to enter screening criteria directly through your Web browser.
With a mutual fund screening system, investors can find multiple funds that meet personal risk, return and management style requirements quickly and easily. For example, if you determine that your portfolio is lacking international diversification, a screening service can provide you with a list of no-load, internationally oriented mutual funds with consistent and above-average performance, acceptable risk and below-average expenses.
Steele Mutual Fund Expert
By Steele Systems, Inc.
$216/yr. for monthly updates;
$104/yr. for quarterly updates
$528/yr. for monthly updates;
$308/yr. for quarterly updates
Mutual Fund—Pro Plus:
$624/yr. for monthly updates;
$408/yr. for quarterly updates
Performance—Data (Personal) 2
Performance—Data (Pro) 4
Performance—Data (Pro Plus) 5
Ease of Use 5
Mutual Fund Expert from Steele Systems offers three versions: Personal, Professional, and Pro Plus. Each version has a database of over 21,000 funds. Updates can be downloaded from the company’s Web site either quarterly or monthly, or are mailed on a CD-ROM disk. The downloadable data is available by the sixth business day of each month and the CD-ROM is mailed in the middle of each month.
The main difference between the three versions is the amount of data available for screening and analysis.
All three versions offer user-friendly navigation tools to make the screening process relatively straightforward. Data and charts are prominently displayed in a multi-tab worksheet format and are easy to read. All reports can be customized as well as printed and exported to other programs such as Microsoft Excel and Word. Predefined screens are available as well.
The quick reference bar adds to the ease of creating new screens and accessing other program features. All of the screening criteria can be compared to user-defined values or any fund or index in the database. The multi-step process for creating new screens may be slightly confusing at first, but a detailed help section can assist with sorting out problems.
The Personal version has 95 data fields per mutual fund, all of which can also be used for screening, including performance returns (for the last 12 months, four quarters and 10 years), various risk measures and other necessary portfolio information.
The more advanced Professional and Pro-Plus versions offer 229 and 714 data fields for screening and analysis, respectively. Additionally, the Professional version offers more risk-related statistics—the Sharpe and Treynor ratios and annualized standard deviations—as well as calendar-year and monthly returns for the past 10 years. The Pro-Plus version has calendar-year and monthly returns from 1962 to the present as well as more in-depth risk measures and comparison charts.
The Mutual Fund Expert programs are great mutual fund screening tools and the various subscription and program types allow investors with varying goals, ideas and investment strategies to improve their mutual fund knowledge and investing skills.
Morningstar Fund Screeners
By Morningstar, Inc.
Free with Internet access; Premium service, $14.95/month
Ease of Use 5
Morningstar provides both Mac and Windows users with free access to news, data, reports and simple but helpful investment tools. The site has over 16,000 funds in its database and provides two fund screeners: a free basic screener with 18 data fields; and a subscription-based screener, called Premium Fund Screener, with over 150 data fields. Both screening services provide access to Morningstar’s set of predefined screens.
The free screener shows criteria on a separate Web page from the results. The Premium screener allows the number of results to be shown on the same page as the criteria. The number of funds meeting the criteria is reported after each criterion is entered, making it easy to adjust the criteria depending on the final results of the screen.
The free screener allows you to compare criteria to the category average, S&P 500 index or a user-defined number, while the Premium screener allows you to screen based on user-defined numbers as well as category averages, over 40 indexes, and specific mutual funds. A helpful feature to use when choosing your own comparison numbers is a chart of quartile ranges and averages, which lets you select a more meaningful comparison number.
All screens created with the Premium version can be saved for later use. Also available to Premium users are analyst reports and a weekly newsletter with “Picks and Pans” of the market.
Other useful screening tools are Mutual Fund Quickrank and Similar Funds. The Quickrank tool ranks all funds in a user-defined category by certain criteria including volatility and total return. Available to Premium subscribers, the Similar Funds tool finds mutual funds that have comparable characteristics and then ranks them from the most similar (10) to the least similar (one) based on portfolio make-up and performance.
For investors wanting to do basic mutual fund screening, the free screener may suit your needs. If you are looking for a more advanced tool, but not as intricate or costly as a software program, the Premium screener offers numerous screening criteria at a reasonable cost.
Screening programs help you sort through thousands of stocks to find a few that warrant further study. The top packages examine a wide universe of stocks, supply a deep set of information for examination and screening, and provide a great deal of flexibility to match the screening parameters to your personal investment philosophy. The packages should also have a wide range of pre-programmed filters to illustrate the screening process and help users get started more quickly.
Many investors use fundamental screening systems as a framework in which to investigate investment tips in an organized, consistent fashion. Company and industry data within a stock screening system can provide an initial impression of a company and its prospects.
Stock Investor Pro
$247/year ($198/year for AAII members)
Performance—Stock Data 5
Ease of Use 3
[Note: Stock Investor Pro is published by the American Association of Individual Investors.]
Stock Investor Pro is a Windows-based program that offers monthly CD updates as well as complete weekly on-line updates. The program provides the most powerful screening tools of the top three choices coupled with a deep set of data and a wide range of built-in screens. Stock Investor contains fundamental data on approximately 8,700 companies. Comparison information on 12 sectors and 100 industry groups is included. The program allows you to look up, analyze, and screen for companies meeting specific criteria on over 2,000 variables. Consensus earnings estimates are provided by I/B/E/S and fundamental data is provided by Reuters.
The program includes detailed income statements, balance sheets, and cash flow statements for seven years and eight quarters. Financial statements can be viewed as reported or on a per share basis, a period-by-period percent change basis, or a common size basis. Stock Investor Pro provides over 300 ratios and growth rates and allows the creation of 250 custom variables. These variables can be viewed, exported, or used in stock filters.
The screening function enables screening for companies meeting criteria using any data field in the program, along with comparisons to database or sector and industry norms. The program includes over 50 predefined screens that follow the techniques of well-known investors such as William O’Neil and Benjamin Graham.
Users can track lists of stocks over time and run filters to see which stocks in a given portfolio pass a specified stock screen. The program comes with a wide array of predefined reports and users can create customized reports that can be viewed on-screen and printed. Data can be exported into a number of text, spreadsheet, and database formats.
PowerScreener Lite, Free; PowerScreener 3.0, $39.99/month (30-day free trial)
Performance—Stock Data 5
Ease of Use 3
Mac users do not have any software options for fundamental stock screening and analysis, so investors must turn to the Web. The top-rated free Web site, MSN Money (see next), presents a more basic version for the Mac, making Reuters PowerScreener the best choice for Mac users.
Reuters.com offers a wealth of content and services, including market, industry, and company news, portfolio tracking, stock and mutual fund screening and research, and educational articles. Much of the site is free, with the site’s premium screener, PowerScreener 3.0, and Reuters Select portfolio available for $39.99 per month.
The Reuters Investor site offers a full range of free stock data, including company snapshots, fundamental data, earnings estimates, charts, and analyst recommendations.
If you are looking for one site to use for company research, you would be hard pressed to find one that beats Reuters. The site provides free reports covering earnings estimates, ratio comparisons, insider trading, institutional ownership, and company financials.
Reuters’ Risk Alerts subject a stock to a variety of tests to rate its overall risk. These tests cover estimate revisions, the trend in analyst recommendations, institutional activity, short interest, price activity in conjunction with industry performance, and price momentum. The more tests a stock passes, in theory, the lower its risk.
The Hot Lists segment provides daily rankings of the best- and worst-performing stocks, industries, and sectors. Links are also provided to the stocks within a given sector or industry for additional research.
Registered users gain access to the free, Java-based screening tool called PowerScreener Lite (click on Ideas & Screening). PowerScreener Lite is a strong tool that provides access to over 90 data items. Users can even create their own custom fields, a rare feature among Web-based tools. The price of this level of flexibility is a more cumbersome interface, but PowerScreener offers the advantage of being able to generate fairly complex screens. A single line in a filter can include mathematical and logical manipulation. Screening results are displayed in a table that includes the variables used in the filter, a tally of companies passing the entire screen to that point, and links to company reports on the passing companies. PowerScreener is also one of the few services where you can view all of the stocks passing a screen, instead of a limit such as 50 or 100. In addition, screens can be saved for use at a later time and registered users have access to 13 predefined “Reuters Select” stock screens.
PowerScreener 3.0, which costs $39.99 per month, has the same look and feel as Lite and includes all of its features. In addition, it offers an expanded data set with over 650 screening variables and six additional predefined stock screens. The results table can be saved as a spreadsheet file. The detailed company and industry data coupled with the free and fee-based PowerScreener modules makes the Reuters Investor Web site one of the top in the industry.
By CNBC and Microsoft, Inc.
Free with Internet access
Performance—Stock Data 5
Ease of Use 5
The MSN Money Web site offers a complete personal finance and investing resource. The investing section offers portfolio tracking, charts, news, and stock and mutual fund research. Access to articles, news, screens, company and mutual fund data, and portfolio tracking is free to all Internet users.
The research and screening module on the site has been and continues to be our benchmark for rating all other on-line services. Company coverage is both broad and deep. The site pulls together the content of Gradient Analytics, Reuters, Zacks, Hemscott, and ComStock into a comprehensive company report. Navigation between the various modules is seamless and well planned.
The screening flexibility is well above average among Internet services. There are over 30 predefined screens to choose from, and users can also create their own and save them for future use. The screening editor is an applet, or mini-program, that we were able to run on Windows-based systems using both Internet Explorer and Netscape browsers. On Mac systems, however, MSN displays a more basic Web-based screening module, as the technology used to build the screener is only Windows-compatible.
Screening is interactive, with passing companies displayed as criteria are added. The nearly 200 screening criteria encompass a full spectrum of elements ranging from basic company information, such as market capitalization, to changes in analyst recommendations and proprietary stock ratings provided by Gradient Analytics. Criteria can be compared to constants, other fields or even other companies, and index or industry norms. It is even possible to create custom fields in the screening editor, a rare feature among on-line services.
A research wizard offers a step-by-step process of analyzing factors to consider when examining a stock, including its fundamentals, price history, valuations, catalysts, and competition. StockScouter ratings provide risk/reward recommendations for stocks. This proprietary quant-driven system provides fundamental, ownership, valuation, and technical grades. A separate graph displays the projected risk versus return profile of a given stock.
MSN Money continues to be one of the strongest research and screening services on the Web.
Investors interested in technical analysis are in the enviable position of having a varied selection of software and Web sites from which to choose. There are literally hundreds of technical analysis programs on the market today, ranging from simple charting software to trading platforms that generate buy and sell signals based on technical indicators, chart patterns, and even astrological cycles. Our top software picks excel in plotting charts and indicators, developing and testing a trading system, and screening on technical factors. Our top charting Web site offers a solid collection of charting choices and technical indicators as well as technical screening and in-depth technical analysis education.
These top programs plot a wide range of charts and indicators. The most common chart types are bar and line. Line charts normally plot the closing price over time, while bar charts typically show the open, high, low, and closing prices for a given period. Other chart types include candlestick, equivolume, and point & figure. A technical indicator, such as a moving average, is the mathematical manipulation of price and/or volume displayed in a graphical manner.
Ultimately, most investors will use technical analysis to aid in timing buy and sell decisions. Trading systems apply a set of buy and sell rules—usually based on technical indicators or chart patterns—and automatically indicate when these rules have been triggered. The trading rules can be a single indicator or groups of indicators matched to specific conditions. Backtesting a trading system involves applying it to a set of historical data in order to test its performance, measuring factors such as the rate of return and identifying each buy and sell. This allows you to see which transactions would have been made based upon the signals generated by the system as well as how successful and risky the strategy would have been over a given timeframe. Taking the process one step further, some of the higher-end technical analysis programs allow you to optimize trading systems, which generates the optimum (most profitable) parameters for a given trading system. However, backtesting only provides a glimpse of how the system would have performed over the specified testing period. There is no guarantee that the trading system can duplicate this performance going forward.
Technical screening involves locating securities that exhibit certain technical properties, such as price and volume behavior, moving-average breakouts, chart patterns, or overbought/oversold conditions based on indicators. Users specify the universe of stocks to screen and the criteria they wish to include in the screen to obtain the list of securities. Coupled with screening is the ability to receive alerts when certain “technical” events occur.
Technical analysis Web sites tend not to offer the same level of power and flexibility as their software-based cousins. While they usually offer adequate charting and technical analysis indicators, they typically do not offer features found in high-end technical analysis software—namely system development, testing and optimization, and technical screening. However, they serve as an excellent stepping-off point for someone new to the field of technical analysis.
By Equis International
End-of-day software only, $499; end-of-day software & Reuters DataLink, $59/month or $565/year
Charting & Indicators 5
Trading Systems 5
Ease of Use 5
MetaStock, from Equis International (a Reuters company), has long stood at the top of the technical analysis software industry. With an impressive array of technical indicators, charting capabilities, and system development and optimization tools, coupled with unmatched ease-of-use, MetaStock is one of the most complete end-of-day programs on the market today.
MetaStock offers a wide variety of charting styles, with nine chart types to choose from—line, bar, candlestick, equivolume, point & figure, Kagi, Renko, three-line break, and candlevolume. Chart windows are object-oriented, so any modifications to a chart or indicator on a chart can be done by right-clicking on the appropriate area. The program’s SmartCharts feature automatically saves a chart, along with the underlying specifications, preserving it for the next time it is opened. Users can also create chart templates that allow you to apply the same set of indicators and studies to different securities. You also have the ability to create a custom default template that is always used when a new chart is opened.
MetaStock comes with over 200 technical indicators and line studies. 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 exchanges.
More advanced users can create their own indicators using the program’s indicator builder, which includes over 200 mathematical, statistical, and technical operators. MetaStock’s “programming language,” while requiring some time to master, is similar to the syntax used in writing formulas in Microsoft Excel.
MetaStock’s Explorer function 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 based on indicator or price levels. MetaStock 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.
A useful educational tool for novices and experts alike is MetaStock’s Expert Advisors. These built-in tools—there are more than 60—help users 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. Users can also create their own market advisors using the indicator builder.
For program trading, MetaStock now comes with over 50 trading systems and allows you to create your own trading systems. Pre-installed and user-defined trading systems can be backtested and optimized with the system tester. This feature enables users to run one system on a single security, many systems on a single security, a single system on multiple securities, or multiple systems against multiple securities. It also provides users with 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.
One problem users oftentimes encounter with such an advanced product is difficulty learning to use it. However, MetaStock is one of the more user-friendly applications out there. Even so, Equis gives its customers a wealth of resources to get the most out of its programs—everything from hard-copy manuals to on-line classes and user groups.
Users can purchase MetaStock and a subscription to the Reuters DataLink data service for $59 a month 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 eSignal. 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. Equis’ highly rated, and free, technical support is another reason to give MetaStock a close look.
Charting & Indicators 3
Trading Systems 4
Ease of Use 5
Rarely do Mac users find investment analysis packages made solely for them that match, let alone surpass, the capabilities of Windows software. ProTA Gold from BeeSoft is one of the most complete technical analysis programs available for the Mac. It can handle a wide variety of markets—equities, mutual funds, indexes, futures, options, bonds, and commodities on an end-of-day basis.
ProTA Gold offers an array of charts to satisfy the needs of most technicians—line, bar, point & figure, and candlestick. In addition, it offers over 45 fully customizable technical indicators and line studies. The program also offers candlestick pattern recognition for over 20 common patterns. The program’s portfolio tracking module allows you to enter buy and sell trades and it will display, analyze, and rank trades in a number of ways. It also generates statistics such as cost basis, return on investment, profit/loss, and more. Users can track technical information such as moving average values and volume activity, as well as post trade entry and exit points, and track overall performance.
ProTA Gold offers features found in high-end technical analysis packages with much higher prices. If you are not satisfied with the existing library of technical indicators, ProTA Gold gives you the added flexibility of creating an unlimited number of custom indicators. Custom indicators may then be plotted on charts, ranked in a portfolio sheet, used as scan criteria in the database scanner, and used to generate buy/sell signals in custom trading models. The BeeSoft Web site also has a library of user-created indicators that you can use for your own analysis and trading.
For those interested in creating trading systems, ProTA Gold offers that functionality as well. You can specify trading rules for entering and exiting both long and short trades. To simulate real-world accounting, ProTA Gold allows you to specify commissions, slippage, and idle fund interest rate. The program will then plot buy and sell points on the chart of the security being analyzed, generate trade lists and summary statistics, and optimize the system.
ProTA Gold will also scan for securities that meet user-defined technical criteria. You can specify one or several technical or performance-based values and the program scans the entire database or a portfolio of securities for those that fit the parameters. Securities that pass the screen are then placed in a portfolio sheet where you can view or rank the results.
The program allows for direct data downloading from Dial/Data. In addition, with the Universal Text Importer, users can import data in a number of formats, including MetaStock, Excel, and ASCII. The only data issues to keep in mind are that it does not automatically handle stock splits, mutual fund distributions, or futures contract rollovers, and ProTA Gold does not support intraday or real-time data.
Developer Jeffery Bizon has been at work on a version of ProTA Gold for the Mac OS X and it went into public beta testing at the end of July.
Mac users looking for technical analysis programs will not be disappointed. ProTA Gold offers extraordinary value given its features and functionality.
Free with Internet access; Basic charting, $9.95/month; Extra! charting, $19.95/month; $9.95/month additional fee for real-time
Charting & Indicators 5
Trading Systems NA
Ease of Use 5
For many individual investors, technical analysis is a foreign concept. Therefore, it does not make much sense to pay hundreds of dollars for software and data just to learn that technical analysis may not fit into their analysis scheme. The Web is an excellent place to learn about technical analysis at no charge, but again it is difficult to find high-quality educational content. StockCharts.com—an Internet-based technical analysis service—is such a place and is our top Web pick in this area.
For charting, StockCharts.com offers one of the best collections of charts available on the Internet. The site features line and candlestick charting, as well as three options for point & figure charting. Pattern alerts are automatically displayed on all point & figure charts (both free and subscription). The site offers a collection of over 20 technical indicators and line studies; users of the free service can plot up to two price overlays and three technical indicators per chart, while subscribers can plot up to eight price overlays per chart and up to 24 technical indicators per chart.
Users can create charts with up to three years of daily data using the free service, or go back to 1990 with the subscription-based services. Premium subscribers may also plot intraday charts, while ExtraRT subscribers have access to non-delayed, real-time intraday charts for all U.S. and Canadian stocks and many indexes. However, these charts are not streaming. A relatively new feature does offer “auto refreshing” charts.
Subscribers to the site can save charts to a favorites list for future analysis (one for Basic service and up to 100 for Extra!). With StockChart’s SharpCharts, subscribers may also change the default ChartStyle—size, duration, period, type, overlays, colors, etc.—and save preferences. Then, any new charts you create will appear with your default settings.
StockCharts.com offers a collection of stock scans that allows users to apply various technical formulas to a stock universe to produce a listing of stocks meeting those criteria. Non-subscribers can run predefined scans based upon technical indicators as well as candlestick and point & figure patterns. Subscribers can create custom scans; however, only Extra! subscribers may save these custom scans and view the results of custom scans in their entirety. All scans screen stocks traded on the NASDAQ, NYSE, Amex, and Canadian exchanges as well as mutual funds.
For a Web site, StockCharts.com is unique in that it provides comprehensive tutorials for all of its tools. For those looking to learn more about technical analysis, the site hosts extensive educational content at its Chart School. Articles cover the basics of technical analysis, as well as trading strategies and technical indicators and how to use them. There is also a discussion of charts, the common patterns that appear, and how to interpret them. John Murphy, a well-known technical analyst, offers his market observations at the site for $16.95 per month.
With its impressive collection of chart types and technical indicators, its scanning capabilities, and extensive educational content, both novice and seasoned technicians alike will benefit from StockCharts.com.