Technical Analysis Software
by Wayne A. Thorp
One of the biggest impacts computerized investment analysis tools have had on the lives of individual investors is cutting down on the amount of prep work that has to be done before arriving at a finished product. Instead of calculating complex returns by hand or looking up stock prices in the newspaper, investment Web sites and software allow users to automate tasks and perform analysis more quickly. This holds true especially for charting and technical analysis—research based on trading volume and price studies of a security—as the days of chart books and plotting charts by hand are long past. Today, individuals have a plethora of technical analysis Web sites and software at their disposal to perform a multitude of tasks, from simple plotting of prices to complex trading system development and optimization.
There is perhaps no other category of investment software that offers a more diverse collection than the realm of technical analysis software. There are scores of programs on the market today, ranging from basic charting software to programs that generate buy and sell advice based upon astrological cycles. Faced with these many choices, it is important to identify what type of analysis you wish to accomplish with the software. From there, it is a good idea to familiarize yourself with the features and functionality of various software packages to find one that meets your particular investment and analysis needs.
In this article
- Data Types Used
- Data Vendors
- Auto Downloading
- Data Import & Export
- Chart Types
- Screening & Alerts
- Trading Systems
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The goal of this comparison article is to introduce you to some of the more popular mainstream technical analysis programs currently on the market. The programs included here all analyze stocks, provide some level of charting, and contain technical indicators. Furthermore, each of these programs can be used for end-of-day analysis, while some also handle intraday data, either on a delayed or real-time basis.
The comparison grid examines the features and functions that many of these programs have in common. The features outlined in the comparison grid are those that a comprehensive, robust technical analysis program should provide. Furthermore, Table 1 outlines some of the more popular technical indicators and drawing tools that each program offers. The information provided in the comparison grid and Table 1 has been provided to us by the respective companies, but it is a good idea to verify the information before choosing a technical analysis program. Reviews of individual programs begin in the comparison grid, and ratings are presented in Table 2.
|WHAT TO LOOK FOR|
A common mistake made by those buying technical analysis programs for the first time is overlooking the importance that data plays in the analysis process. Technical analysis, by definition, is the plotting and manipulation of price and volume data. Therefore, without data, a technical analysis program is as useful as a car without fuel. Furthermore, it is important to use reliable, or clean, data in order to generate logical and reasonable results. For all these reasons, it is important to consider your data source in conjunction with choosing your technical analysis program. The following are some data issues to consider when purchasing a technical analysis program.
Data Types Used
Price and volume data, the basic tools used in technical analysis, are divided into two broad categories: end-of-day and intraday. Ultimately, your investing time horizon will dictate which you require. End-of-day data summarizes trading activity during the course of the day by revealing the opening (first trade) price, the range of trading with the lowest and highest transaction prices, the closing (last trade) price, and trading volume (number of shares or contracts bought and sold). Investors with a longer-term investment horizon are typically satisfied with end-of-day data. Intraday data, on the other hand, is updated throughout the day—either on a real-time or delayed basis. More active investors and traders tend to need access to this more timely data to monitor movements in the markets. Beyond handling price and volume data, some programs recognize the role that fundamental analysis can play and may provide additional data such as earnings and sales data, growth rates, and financial ratios and multiples. End-of-day technical analysis programs will offer a historical database. What separates one program from another is the breadth (number and types of securities covered) and depth (number of years of price and volume data) of the data. Real-time programs should also provide a database to plot historical charts. An adequate historical database is a requisite for programs offering trading systems and the functionality of backtesting these systems. Programs that do not offer a historical database require you to seek a third-party source of data in order to develop a suitable database for backtesting.
Many technical analysis programs use data from third-party data providers, which means you must select a data provider in order to use your program. Programs vary in their support of data vendors. Investor/RT from Linn Software allows for six different data services (data feeds).
A growing trend in technical analysis software is to offer a completely self-contained package, where the program manufacturer is also the data provider. These programs are only compatible with their companys own proprietary feed. Examples include TC2000 and TCNet, VectorVest, TradeStation, and Trading Expert Pro.
Those hoping to shop around for a data vendor are not able to do so with these programs. While this is not necessarily a negative, be aware that, in these instances, you are tied to the data the program provides and its quality (or lack thereof), as well as that companys fee structure for data. The comparison grid indicates which data vendors are compatible with each program.
Some programs give you the flexibility of retrieving data on a fixed schedule without having to manually initiate the download process. With programs such as TC2000 and VectorVest, you specify when and how often you want updates, and the program will log onto the data provider, download the data, and then log off.
Data Import & Export
If you are looking to upgrade an existing technical analysis program, you may wish to keep in mind the data formats that can be imported into the newer version. This is especially true if you already have built up an extensive database of historical data, as you may be able to transfer existing data to use with the new program. This functionality can save you time and money by not forcing you to start completely from scratch.
The ability to export data means you may be able to use your data with other programs, such as financial planning software and portfolio management software. Refer to the comparison grid to see which particular import/export formats each program supports.
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 could merge the prices of Disney and Comcast to create a media index.
The most common chart types are bar and line, and most of the programs highlighted here provide these chart types. Line charts typically plot the close over time, while bar charts show the open, high, low, and closing prices for a given period. Some of the other charts you may come across include candlestick, equivolume, and point & figure. Be sure that the program you select supports the chart types you use in your analysis.
A chart template or layout allows you to specify the characteristics of a chart, including the time period displayed, the periodicity of the data—daily, weekly, quarterly, etc.—chart type, and indicators or drawing tools you wish to display. 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. All you need to do is specify the security and the template automatically displays the data in the desired manner.
A technical indicator is the mathematical manipulation of price and/or volume data displayed in a graphical manner. The number and type of indicators built into a program are important factors to consider when selecting software. However, the emphasis should 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 seems lacking in relation to other programs. Programs such as InsiderTA provide a small number of unique, proprietary indicators—those developed and marketed by the company itself—that you may find useful. It is helpful to take a moment to consider your needs when assessing the number and type of indicators you will require in a program. The more you wish to experiment with different trading strategies, the greater your need for a program with a more extensive listing of technical indicators.
Beyond a set of predefined indicators, 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 in a calculation. For example, the Wilders RSI (relative strength index) is usually constructed using 14 periods, but the period may need to be adjusted depending on the security or market condition.
Savvy technicians may follow technical indicators they have created themselves. In addition, trade publications such as Technical Analysis of Stocks and Commodities regularly publish new indicators or variations on existing indicators. Some of the more advanced programs allow you to create custom indicators. While the methodology differs from program to program, in general, you enter the formula into a spreadsheet-like module or use a wizard that walks you through the process.
Table 1 details many of the popular indicators each program offers as well as the overall number of indicators supplied by each program.
Screening & Alerts
Screening is the method of taking a large universe of securities and narrowing it down to a more manageable number with similar characteristics. Technical screening involves locating securities that exhibit certain technical properties, such as price and volume behavior, moving-average breakouts, or overbought or oversold conditions, based on indicators. Users are typically able to specify both the universe of stocks 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, you may also be able to perform screens using fundamental criteria as well.
Another useful feature is the ability to receive alerts when certain technical events occur. Programs may give you the option of selecting groups of stocks 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 predefined price levels are met. These alerts can take the form of on-screen pop-up windows, E-mail alerts, or a message sent to a pager, cell phone, or hand-held device.
Ultimately, most investors using technical analysis depend on it to help decide when to buy or sell a security. Trading systems apply a set of buy and sell rules and automatically indicate when these rules have been triggered. The trading rules can be a single indicator or a group of indicators matched to specific conditions. Generally, you will tend to find trading systems with only higher-end technical analysis programs.
Backtesting a system involves applying it to historical data in order to test its performance over a specified block of data. Backtesting provides an idea of how a trading system may perform if you were to use it going forward. To complement this functionality, some programs also offer system reports that provide such measures as rate of return, performance relative to buy-and-hold, and the profitability of each individual trade. These reports allow you to see which transactions would have been made as well as how successful and risky the strategy would have been over a given timeframe. The ability to rank and compare trading system performance is a valuable tool. You can see how different systems perform in different market conditions.
It is easy to fall into the trap of thinking that what has happened in the past is what will happen going forward. However, it is important to keep in mind that backtesting only informs you of how the system would have performed in the past. There is no guarantee that any trading system can duplicate historical performance going forward. When backtesting a trading system, it is important to implement assumptions that mimic the real world as closely as possible. To add realism to a trading system, programs allow you to account for such items as slippage (the amount a stock 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 want to trade on long positions, short positions, or both.
As with indicators, some programs allow you to modify existing trading systems to better suit your trading style. In addition, a few packages allow you to build systems from the top down using proprietary programming languages or wizards that walk you through the process. Once you have created a new trading system, you should be able to backtest as with the predefined systems.
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 we have a system that buys when the closing price goes above the 50-day moving average and sells when the closing price falls below the 50-day moving average. With system optimization, the program will test a set of time periods used in calculating the moving average to find the period that yields the best performance. However, theres a popular saying among traders about optimizing a system: You can torture the data until it tells you what you want to hear.
|TECHNICAL ANALYSIS PROGRAMS|
Insider TA Standard & Professional
Insider TA Standard and Pro from Stock Blocks, Inc. is a unique application when compared to the others highlighted here. Whereas most technical analysis programs available today offer users a range of analysis techniques, InsiderTA is more of a niche product. To elaborate, the bulk of the analysis performed by the program deals with volume, more specifically, equivolume. This type of charting places price and volume on equal footing in the form of two-dimensional boxes. When analyzing these boxes, the vertical height of a box is the price range for the period, while the horizontal x-axis is a sequence of periods where the box grows wider as volume increases and narrower as volume decreases. The program also offers candlestick, candlevolume, and point & figure charts.
For volume analysis, Insider TA offers four tools—consolidation mapping, box analyzer (BA), volume analyzer (VA), and VA rank. The box analyzer is based on ease of movement principles and determines the trend in price by analyzing box shapes and their relation to price movement. The program identifies trends, issues buy and sell signals that indicate where a reverse in price may be taking place, and plots these signals on the chart being analyzed. The program also provides a summary of how the trades would have performed had you traded on the buy and sell tags.
Insider TAs volume analyzer is a derivation of on-balance volume (OBV) and attempts to measure the demand for a stock. Volume analyzer is plotted as a line that rises when there is more buying interest in the stock than selling interest, and vice versa. Building on the volume analyzer function, the VA rank function measures the relationship between a stocks price and its volume analyzer level. Extremes in the VA rank line indicate potential entry and exit points.
In equivolume charting, a consolidation period is marked by a range of boxes that are of similar height (price). During this time, prices tend to move sideways with little upward or downward movement. Oftentimes, when prices break out of this consolidation period, the stock undergoes rapid movement (either up or down). Studies have shown that when this breakout takes place, post-breakout trading volume approximates that which took place during the consolidation period as investors take profits or cut losses. Therefore, the horizontal distance of the consolidation—the volume traded during the period—will often be roughly equal to the horizontal distance following the breakout. Using the consolidation mapping tool in Insider TA, users can get a feel for how long (but not how big) the price move will be.
Beyond those features found in Insider TA Standard, the Pro version offers additional features, such as stop-loss and trailing stop signals that attempt to protect you in the event of an unexpected turn in the stocks price. Pro also offers MetaStock, TC2000, and QuotesPlus data compatibility (the standard version handles only ASCII text files) as well as a file scan utility that allows you to scan portfolios of stocks to find those that meet your individual criteria.
Investor/RT & Investor/RT Professional
It is good to see that the programmers at Linn Software have not slowed their prolific pace of software updates for their Investor/RT platform. Since our last technical analysis software comparison in the March/April 2002 Computerized Investing, the program has issued no less than 23 updates, with dozens of incremental updates along the way. The end result is one of the most versatile technical analysis and trading programs available today. Investor/RT is one of the few technical analysis programs that is offered for 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, eight different chart types, custom indicator and trading systems creation, system optimization, order placement, and portfolio management functions.
The program offers an array of chart types—including line, bar, candlestick, and point & figure—along with a library of over 140 technical indicators. In addition, Investor/RT provides candlestick pattern recognition. Users may select from any of the over 30 predefined patterns and the program will mark each patterns occurrence on the display—even on an intraday basis.
For any trader, it is important to track open positions. Any portfolio management and tracking capabilities within your trading and analysis package are 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.
The proliferation of updates with Investor/RT has also led to multiple versions of the program—four in all. Both real-time and end-of-day versions of the software support a wide variety of end-of-day and real-time data feeds through the Internet, cable, satellite, or FM radio. But, perhaps disappointingly, they have segregated some of the most advanced features of the program to the Professional versions. With the standard version of the program, users have access to the advanced charting capabilities and portfolio tracking functionality. The Professional version offers LinnSofts Real Time Language (RTL) capabilities.
With the RTL, users can create custom indicators, trading systems, and scans. Using the scan function, users have the ability 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 then be sorted on a number of data elements.
For users of the Professional software, three additional trading system-related add-ons can be purchased, at a cost of $9 to $15 a month, each: trading system development, trading system optimization, and trading system deployment. Trading system development allows users to develop their own trading system, while trading system optimization allows the testing of thousands of combinations of trading rule setups to find optimal periodicities, indicator periods and other setup variables. This is an improvement over our last look at the program two years ago when optimization was non-existent. Finally, 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 can 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. To accomplish this, Investor/RT Professional can work in concert with a software product called Ninja Trader. Once trading signals are generated by Investor/RT Professional, trading orders are conveyed to Ninja, which does the order management work, conveying the order to the brokerage.
MetaStock End of Day & Professional
With a potent offering of technical indicators, charting capabilities, and system development and optimization tools, coupled with unrivaled ease-of-use, MetaStock End of Day and Professional have established themselves as two of the most complete programs of their kind.
MetaStock offers an extensive collection 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.
Both versions of MetaStock come with over 130 technical indicators and line studies. If you choose to create your own indicators, the programs indicators builder offers over 200 mathematical, statistical, and technical operators to select from. MetaStocks programming language, while it does take some getting used to, is similar to the syntax used in writing formulas in Microsoft Excel.
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 ships with a set of predefined scans, and users can create and save their custom scans.
A useful educational tool for novices and experts alike is MetaStocks expert advisors. These advisors—there are now more than 50—help users understand what a technical indicator is telling them. They offer commentary based on the current technical condition of the security being viewed. When you open an expert advisor, buy and sell signals are plotted on the chart in question. Using the indicator builder, you can also create your own market advisors. With MetaStock Professional, alerts based on expert advisors can be sent to your pager, E-mail, or cell phone.
MetaStock comes with 26 trading systems and allows you to create your own trading systems, all of which can be backtested and optimized with the recently overhauled system tester. The new system tester enables users to run multiple system tests against multiple securities and offers more customization than before with the ability to change and edit variables in testing—such as entry and exit points, commissions and slippage—to help create a more realistic picture of the trading scenarios results.
Users can purchase MetaStock and a subscription to the Reuters Datalink data service for $59 a month or they can purchase the MetaStock software and The Downloader software for $449 and go with a third-party data vendor such as Dial/Data, Reuters, or Telescan. The Downloader automatically collects price updates, tests data for accuracy, checks for data errors, adjusts for stock splits, and reinvests mutual fund dividends.
If you are looking for real-time analysis at a reasonable price, there is MetaStock Professional. All of the features outlined here are found in both the End of Day and Professional versions. However, Professional provides tick-by-tick analysis capabilities and is compatible with real-time data provided by QCharts from Quote.com and eSignal.
OmniTrader, from Nirvana Systems, is unique compared to the other advanced software packages highlighted here. While some programs offer trading systems to complement their suite of analytic tools, Omni Trader is 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, unlike a true black box, you are shown the basis of the signals.
OmniTrader ships with 61 pre-installed trading systems. If you want to create your own systems, you will be disappointed as this functionality is not available. However, if you are a trader looking for a robust selection of trading systems and unique optimization features, OmniTrader may fit the bill.
There are three 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 and adds real-time analysis capabilities. OmniTrader supports end-of-day data feeds from HyperFeed, eSignal, Quote.com, Telescan, and DTN.IQ and real-time data feeds provided by eSignal, DTN.IQ, and Quote.com.
The program automates the trading process by applying its trading system to a user-specified collection of stocks, mutual funds, or futures contracts and finding those systems with the best historical performance. This process is ongoing, so the optimization results are dynamic, giving users a fresh basis on which to trade. Additionally, trading signals in OmniTrader are confirmed by using more than one trading system, a feature unique among the services discussed here. Another unique feature of the software is the vote line, which is the result of OmniTraders analyzing its trading systems. Based upon the analysis, the software selects those systems that performed the best over the backtesting period and then votes on the signals generated by the top systems. The results are shown in the vote line, which represents the consensus of the signals. Since the vote line is based on those systems that are performing best at a given point in time, OmniTrader can adjust to the trading behavior of a symbol.
To allow 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 and displays the chart and all associated trendlines, candlestick patterns, and trading systems the program has found most useful in analyzing that security. To avoid any bias on your part, however, the identity of the security is not revealed. Once the game has started, you can place trades and track the value of your account over time. Another training module in OmniTrader is the lab mode, which is similar to the game mode but allows you to trade a specific portfolio of securities.
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.
Personal Analyst, Personal Hotline, & Pro Analyst
Mac users looking for technical analysis software have three offerings to consider from Trendsetter Software: Personal Analyst, Personal Hotline, and Pro Analyst. All three programs offer basically the same core features, but as you advance through the product line, the features and complexity of the programs expand, with Personal Hotline at the highest end.
Personal and Pro Analyst offer many of the same features, including the ability to create bar, line, candlestick, and point & figure charts (added to Pro Analyst since our last comparison). With both programs, users have over 50 indicators and studies to choose from. Analyst can also 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. The one drawback, however, is that you cannot plot your own trendlines. Other studies that the program can plot automatically include Fibonacci, Gann, and Speed lines.
With Analyst, users can perform technical screening—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 Analyst will produce numerical ratings to aid in the trading process.
Analyst offers three unique chart templates: equiview (Personal Analyst only), compare, and general market. 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 users 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 including: a technical summary that shows how your securities performed for the day, candlestick pattern alerts, and results of Analysts ratings systems.
Pro Analyst is Trendsetters sole real-time software package, 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 Pro Analyst, 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 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.
Lastly, Personal Hotline offers the features of Analyst along with some additional, high-end features geared toward active traders and investors. The personal trade tracking function summarizes your open positions on a daily basis and analyzes your trading results. The expert trading model 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 offers daily recommendations for commodities and stocks based on a system used by commodity traders. Despite being billed as a program for traders, Hotline does not support intraday or real-time data, a necessity for active traders. In addition, the program does not offer system customization or creation functionality available in other high-end technical analysis programs.
ProTA & ProTA Gold
ProTA and ProTA Gold from BeeSoft are two of the more complete technical analysis programs available for the Mac. Both programs allow for direct data downloading from Dial/Data. Also, with the Universal Text Importer that is included with both packages, users can import data in a number of formats, including MetaStock, Excel, and ASCII. The only data issues to keep in mind are that neither program automatically handles stock splits, mutual fund distributions, or futures contract rollovers, and they do not support intraday or real-time data.
ProTA 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 programs portfolio tracking module allows users to enter buy and sell trades and it will display, analyze, and rank them 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 has all of the same features as ProTA, as well as advanced 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 added flexibility of creating an unlimited number of custom indicators. The BeeSoft Web site also has a library of user-created indicators that can be downloaded and installed.
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. Once you have created a system, the program will 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.
SMARTrader & SMARTrader RT
SMARTrader from Stratagem Software has a long and distinguished lineage, tracing its roots back to one of the first commercially available technical analysis packages—CompuTrac.
SMARTrader is a platform for charting, technical analysis, trading system development, testing, and optimization. The program is built around spechsheets (short for specification sheets), which are divided between a definition window and a spreadsheet. The definition window allows you to specify the information you wish to calculate—data files, indicators, and entry and exit rules. The spreadsheet is where the actual raw data, studies, formulas, and profit results are calculated and displayed. SMARTrader offers a variety of chart types, including line, bar, candlestick, and point & figure. This roundabout method of creating charts and plotting indicators makes SMARTrader more cumbersome than some of the other packages highlighted here. However, what is lost in sexiness and ease-of-use is made up for in speed of execution and value.
For system development and testing, SMARTrader provides a formula wizard that does not require much mathematical knowledge. If you want, however, you can still write your own formulas using algebraic operators and mathematical expressions. The software can also optimize the variables in a trading system and generate a list of the results of each optimization run. The listing includes information such as net profit, maximum drawdown, maximum gain, and number of trades.
SMARTrader allows users to automate tasks using SmartSearch and SmartView. With SmartSearch, the program searches the database to find securities that meet user-defined criteria. Securities matching the criteria are placed on a hot list and SMARTrader will draw price charts for these securities with any indicators you specify. The SmartView function allows you to draw charts for any security or your entire database and then view them. The browse mode cycles through the charts automatically using a time interval of your choosing.
Other features of SMARTrader include a portfolio manager, database manager, and screening capabilities. SMARTrader RT supports real-time data from Quote.com.
SpiffyCharts If you are looking for a general-purpose charting software program for either Windows or Mac, but do not want to spend any money, check out SpiffyCharts. SpiffyCharts is from the makers of Behold!, a program included in past technical analysis comparisons. We are not including Behold! this time around since Investors Technical Services is pondering the softwares future.
Those interested in SpiffyCharts can download the software (www.spiffycharts.com) and register it for free. With SpiffyCharts, users can download daily data from CSI, MJK, or Dial/Data for stocks, currencies, futures contracts, and mutual funds. The software is a little lacking in the chart types it supports, as users can only plot bar and line charts. Users do, however, have a reasonable number of technical indicators and line studies to choose from—42 in all. In addition, despite being a free program, users can also create their own indicators.
SpiffyCharts offers a variety of portfolio reports, which show the most recent data for your securities and indicate the current value of your portfolio. The software comes with a collection of predefined reports and offers users the ability to create their own personal reports.
While SpiffyCharts does not offer as many features as other packages highlighted here, keep in mind that you get what you pay for. For the cost of data only, you have decent charting capabilities, a respectable indicator library, and the ability to create your own indicators or studies. In addition, the program is available for both Windows and Mac operating systems. From the SpiffyCharts Web site, it appears that Investors Technical Services is devoting a tremendous amount of energy to improving the product in the coming months.
TC2000.com & TCNet
Worden Brothers has been a staple in the technical analysis world for many years. The companys original product—TC2000.com—is 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. With TCNet, Worden has ventured into the real-time realm and introduced a number of unique features.
Worden markets its software for free. The company is also a data provider. The companys end-of-day feed is highly acclaimed and is compatible with numerous technical analysis programs. TC2000.com and TCNet can only use Worden data feeds—the company relies on data subscriptions for revenue. A subscription to data for TC2000.com, an end-of-day application, is $29.75 per month. A $99.95 per month subscription gives you have access to unlimited real-time data for TCNet.
TC2000 offers a dozen or so indicators, including some proprietary indicators that are exclusive to the program: balance of power, moneystream, and time-segmented volume. The balance of power (BOP) indicator provides insight into the underlying action of a securitys price movement. It depicts trends in the systematic buying and selling of a security. Moneystream is a price/volume indicator, resembling the on-balance volume indicators. Time segmented volume (TSV) is calculated from a securitys price and volume. With it, various time-segments of both price and volume are compared to one another in order to uncover periods of buying and selling, which may lead to a sustained price swing. The software does not allow users to create their own indicators. In addition, TC2000.com and TCNet do not offer trading systems.
One of the most 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 TC2000.coms Easyscan feature, you are able to locate symbols meeting custom search criteria. Simultaneously, you can scan for long-term technical and/or fundamental conditions, as well as intraday conditions. The software comes with several pre-defined scans and users can save custom scans. Users will find predefined lists of index and industry components.
TCNet is the real-time version of TC2000.com. It offers the same level of functionality as TC2000, with real-time capabilities. 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. When viewing charts in TCNet, you can view news headlines related to that stock as well as fundamental and technical data.
One of TCNets more interesting features is that the software allows users to interact with each other. Through TCNet, users 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. Worden technical support has also established a chat room with operators available 12 hours a day.
TradeStation is the heavyweight of the technical analysis software industry: a complete technical analysis and trading platform for stocks, options, and futures contracts. This system is definitely not for the casual technician or investor. The programs pricing schedule has been revised since our last comparison. The $199.95 per month base price for simply using the program is lower than two years ago. Meanwhile, active traders who trade with TradeStation Securities used to pay nothing for the program; they are now charged $99.95 a month. Note, however, that these prices include the data, as TradeStation is not compatible with any third-party data vendors.
What makes TradeStation unique is that it offers seamless integration for direct-access trade execution. Once you have set up an account with TradeStation Securities, you can place your trade from directly inside the TradeStation program window.
Using TradeStations proprietary programming language—EasyLanguage—users can create and test their own trading strategies. Systems can be as simple or as complex as you can create. The program even allows you to create strategies on pre-market or post-market hours only, on pre- and post-market hours combined, or on any other custom sessions you define. You can also set your strategy to place limit orders based on real-time bid and ask prices. EasyLanguage itself does take some getting used to, but the program offers an EasyLanguage wizard that helps you create trading systems, indicators, show-me studies, and paint-bar studies.
The program also provides a system performance report consisting of 11 different tabs and over 20 graphs that allows users to analyze the results of a system on a trade-by-trade basis. In all, there are over 180 performance fields at your disposal for analyzing trades. Furthermore, you can automate the execution of equity and futures trading systems in real time. An enhancement since our last comparison allows the program to automatically execute buy and sell orders as signals are generated (you can also set the program to prompt for confirmation before sending the trade order).
The account manager in TradeStation tracks stocks, stock options, and futures options positions on a real-time basis. Information contained within the manager includes todays orders; open, filled, and cancelled orders; account statistics; duration; ticket number; and net profit/loss.
RadarScreen, a feature re-introduced to TradeStation since our last comparison, allows users to create a list of securities and monitor them with a variety of tools. The software provides a number of predefined symbol lists and a set of popular indexes and subsectors. Once you have specified the list you wish to monitor, you have an almost limitless number of search possibilities. You can use any of TradeStations predefined indicators or use the programs EasyLangage to create custom indicators to use in your searches. You can program pop-up or E-mail alerts for when securities are located that match your criteria.
TradeStations plethora of charting options and technical indicators, custom indicator creation capabilities, system development and testing, and seamless order placement place it at the forefront for active, serious traders.
Trading Expert Pro
AIQ Systems Trading Expert Pro is an artificial intelligence-based stock market trading system for market timing and stock screening on either an end-of-day or real-time basis. The application combines charting, technical analysis, trading system design testing, and portfolio management.
Trading Expert Pro offers both bottom-up and top-down analysis to identify trading opportunities. Users can create stock screens based on technical indicators to winnow the universe of stocks down to a more manageable subset. In addition, the program offers stock selection using group and sector analysis.
To help traders in market timing, Trading Expert Pro offers its expert rating, which signals possible changes in market direction. The model compares the Dow to the activity of the broad market—represented by the New York Stock Exchange market breadth and the number of NYSE stocks reaching news highs and lows. Each chart created with the software will include a daily expert rating. Ratings range from 0 to 100, with values greater than 95 considered a strong signal that the market in this security may be changing direction.
Trading Expert Pro offers one of the most comprehensive collections of reports, with over 200 in all. There are more than 120 prebuilt screening reports that are customizable to fit individual preferences and trading habits. These reports list securities, sectors, futures contracts, indexes, and mutual funds that pass the screening process. Screening reports can be generated on both a daily and weekly basis. Summary reports can also be generated that display comprehensive data on all stocks, either by groups, sectors, or daily/weekly trendline breakouts and breakdowns.
The programs expert design studio module allows users create their own custom indicators as well as design, backtest, and optimize trading systems. To help you with building your own indicators, the expert design studio includes a rule builder, which has a built-in wizard. Once you select the trading ideas that interest you, the rule builder will write the language for you. The rule builder handles fundamental data elements as well as industry group performance. The software program can run multiple systems at once with both technical and fundamental data elements.
A portfolio simulator allows you to establish entry and exit strategies along with the initial investment, and the program runs a day-by-day trading simulation of the system and tracks the value of the investment over the course of the simulation.
Finally, the matchmaker module in Trading Expert Pro allows you to create groups of stocks that emulate sector funds. Because these groups of stocks have trading volume, which mutual funds do not, you can use Trading Expert Pros volume indicators and screening reports to analyze sector groups. Traders can also use the matchmaker to identify stocks that seemingly are completely unrelated, yet are highly correlated with one another—an excellent tool when trying to create truly diversified portfolios. For sector and group rotation, there is a sector rotation report that graphically displays each sector, and a group analysis report that shows which industry groups are currently moving in and out of favor.
Data for Trading Expert Pro is supplied solely by myTrack, on either an end-of-day or real-time basis. With myTrack, users also have access to an integrated brokerage option.
VectorVest ProGraphics & ProTrader
With its ProGraphics software and ProTrader add-on, VectorVest offers both fundamental and technical analysis capabilities that include stock recommendations, technical analysis, and charting.
ProGraphics is an end-of-day stock analysis and graphics program that allows users to analyze, sort, screen, search, rank, and graph stocks and exchange-traded funds (ETFs), industry groups, and sectors by any of over 30 investment parameters, including pre-installed indicators of safety, timing, and value.
One of the softwares most attractive features is its buy, sell, and hold recommendations on its database of stocks and ETFs as well as popular indexes, industry groups, and sectors. These recommendations are based upon value, safety, and timing. By analyzing a companys earnings, earnings growth, dividends, and profitability, the program attempts to determine a relative value figure for the company. This denotes the growth potential of the stock. A companys safety factor measures whether or not the growth potential of the stock justifies the risk involved in investing in the company. Lastly, timing involves when to buy, sell, or hold a given stock. After calculating these individual variables, ProGraphics combines them into a master indicator—the VST-Vector—that provides a common denominator to compare stocks. Those with a high VST-Vector have the best combination of value, safety, and timing as determined by the software.
ProGraphics is divided into a number of sections, including viewers, graphs, watch lists, research, views, and portfolios. There are separate viewers for stocks, ETFs, sectors, industry groups, and market indexes, each providing numerical values for various data elements. The graphs section provides basic charting for stocks, ETFs, sectors, and industries.
The charting capabilities of ProGraphics are rather basic; the ProTrader add-on offers expanded charting and technical analysis functionality.
WatchLists are lists of stocks that users can monitor over time, whether they are currently owned or not. There are predefined watchlists for various indexes—including Dow Jones industrials, transports, and utilities; S&P 100 and 500; and Nasdaq 100—that provide best new highs and worst new lows.
The most interesting feature of the research area is the UniSearch tool, which can evaluate stocks in any watchlist using any of over 200 predetermined strategies or customized trading strategies. The predefined searches are grouped by type, such as those for going long or short, searches that work best in trending markets, or those that fit a particular trading/investment style—aggressive, prudent, conservative, or speculative. Once a particular search has been run, companies passing the search are listed. By selecting an individual stock, you can see the performance of the stock over any time period, the stocks VectorVest rankings, or a comparison of the stock to its respective sector or industry.
ProGraphics portfolio manager allows you to track multiple stock portfolios. Furthermore, you are able to backtest investment strategies without having to put real money at risk.
Daily views in the program discuss current market conditions and advise a trading strategy accordingly. These views provide commentary on whether the market is overvalued or undervalued, whether it is advancing or declining, or whether it is better to be long or short the market.
The ProTrader add-on requires ProGraphics to function and is not a standalone product. It provides charting capabilities and an expanded library of almost 40 technical indicators and studies that can be charted and viewed. ProTrader now allows users to create virtually any custom indicators they wish. The package also offers more extensive charting capabilities, including candlestick and point & figure charts.