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How do I Choose the Best Day Trading Program?

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  • Written By: Dana DeCecco
  • Edited By: A. Joseph
  • Last Modified Date: 24 August 2016
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Day trading programs can refer to programs offered by brokers catering to day traders or to computer programs specifically designed to aid day traders. Some brokers offer day trading programs that might include specific tools and services available to high-volume traders. Technical analysis software programs provide the trader with the ability to develop and test his or her own trading strategies.

Short-term trading strategies require software programs and platforms that are specifically designed to capitalize on small price movements. Highly liquid assets are traded, such as currencies, index funds and heavily traded stocks. Access to sophisticated tools might be provided to the day trader by certain brokerage firms.

Stock, commodity and foreign exchange brokers supply traders with the resources necessary to day trade in the markets they offer. These resources might include analytical software programs. Technical analysis is the foundation of most day trading systems. A good day trading program will provide the trader a means to develop and test new strategies and systems.

Trade entry and exit signals are developed and refined using programs designed for traders. These programs can adapt indicators and chart patterns to suit the trader's time horizon. Analytical programs might indicate alternative strategies for use under varying market conditions. These types of programs are available from independent firms as well as some brokerages.

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Software programs include the actual broker interface. Buy and sell orders are entered on the trading platform. This software program must be lightning fast and accurate to accommodate the day trader. Buy and sell orders must be executed quickly and reliably. Ease of use might be a major factor in the selection of a day trading platform.

Back testing programs are integral with many analytical software packages. The ability to back testing is necessary in order to develop a functional system. Historical data is used to test a new system under different market conditions. The trade system's results are displayed for the time period selected.

A quality day trading program might include multiple news feeds and time-sensitive informational services. Price fluctuations are driven by supply and demand, which is driven by news such as economic and political announcements. Corporate earnings affect price volatility. Other factors as varied as weather conditions and political unrest can affect price fluctuations of various financial assets.

The trader can also develop a day trading program. This program would include the asset to be traded and a time frame to trade. The trader must have a system with entry and exit signals. Perhaps the most important part of the day trading program is a money management system. Controlling risk is essential for a successful day trading program.

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