Succeeding as a day trader requires staying one step ahead of the market. To do that, it’s essential to have software tools that help you analyze price data and make trading decisions quickly and effectively.
In this guide, we’ll explain how day trading software can improve your trading and highlight some of the best day trading software platforms.
- Why Use Day Trading Software?
- Types Of Day Trading Software
- What To Look For In Day Trading Software
- Best Day Trading Software Platforms
- Conclusion: Day Trading Software
Why Use Day Trading Software?
Day trading software plays a significant role in helping you spot, analyze, and act on trading opportunities. Day trading is typically fast paced and unforgiving, so you need tools that make the process of finding and executing trades as seamless as possible.
In addition, day trading software plays a role in improving the quality of your trades. Some software platforms are designed to give you greater insight into the market, for example by offering Level 2 order data or highlighting unusual price activity. Other day trading software helps you sort through trading opportunities so that you can spend more time researching setups that are likely to be profitable.
Types Of Day Trading Software
There are many different types of day trading software that help your trading in different ways. Let’s take a look at some of the main categories of day trading programs.
Trading And Charting Platforms
Trading and charting platforms are the software apps where day traders spend most of their time. These platforms offer price charts and technical analysis, plus the ability to enter and monitor trades. More advanced trading platforms will allow you to create your own technical studies, backtest a strategy against historical price data, and even set up trading signals and alerts.
Most major brokers offer their own trading platform that can be used by day traders. But there are also many third-party trading platforms that may offer more in-depth features or a different take on charting or market research. Make sure that your trading platform supports the types of assets you want to trade – some trading platforms cover almost all asset classes, while others are specialized for stocks or forex.
Screeners play an important role in helping you find day trading opportunities. Day trading screeners allow you to search for specific technical setups, which dramatically reduces the number of charts you need to look at in order to find a potential trade. Some screeners come with a variety of premade scans, while others offer maximum flexibility so you can create your own custom scans.
Market News Scanner
News plays a significant role in driving price changes throughout the day. You can opt for a dedicated news platform that offers a running list of headlines based on your watchlists. Alternatively, you can use a news screener that allows you to search for news about specific companies or industries. In either case, look for a market news software that lets you set up alerts so you can be among the first to know about breaking stores.
Trading journal software isn’t flashy, but it plays an important role in helping you document your trades and improve your day trading over time. Journal platforms like EdgeWonk and Tradervue not only show the entry and exit points of your trade, but give you a chance to explain your thinking around a trade. Over time, you can use your journal to identify common pitfalls and aspects of day trading you’ve done well at.
What To Look For In Day Trading Software
It’s important to remember that day trading software should help you trade more efficiently. It shouldn’t be a distraction. In some cases, relying on a single piece of software can be more effective than trying to switch between multiple day trading programs. Think carefully about what information and features you need when choosing a day trading platform.
With that said, let’s highlight some of the key features that you should look for when considering day trading software:
If you’re using a third-party trading software rather than the platform provided by your brokerage, it’s important to think about brokerage compatibility. A third-party day trading platform that lets you trade directly from charts is a lot less useful if it can’t connect to your brokerage. The same is true, albeit to a lesser extent, for software like trading journals. Tracking your trades is much easier when trade data is automatically imported from your brokerage account.
So, look carefully at what brokers a given day trading software can connect with. If you’re using a popular brokerage like Charles Schwab, TD Ameritrade, or Interactive Brokers, there’s a much better chance that your favorite day trading software can integrate.
The kind of customization options you need vary widely between different types of day trading software. But customization is critical to ensuring that a particular software made for day traders broadly can benefit your trading style and strategy.
For trading platforms, for example, look for customizable dashboards and the ability to create custom technical studies. Stock screeners should allow you to build your own scans from scratch or offer significant editing of premade scans. Market news software should allow you to create watchlists and adjust the kinds of headlines you’re seeing throughout the day. Trading journals should offer multiple layouts and the ability to add numerous types of media – not just text – to your notes.
While most day traders spend a large chunk of the day at a computer, having access to your day trading software on your smartphone can be a huge benefit. You can stay on top of the market and monitor ongoing trades even when you’re not at your computer. Or keep an eye on the news or add notes about your day’s trades during a morning or evening commute.
Make sure that if your software offers a mobile app, it includes all the key features that you need from the desktop platform. Some day trading software only offers a limited feature set on your smartphone.
Best Day Trading Software Platforms
There are hundreds of software platforms available for day traders, which can make it difficult to find the software that’s right for you. To make your search easier, here are some of the best day trading software platforms on the market today.
Best Trading Platform: DAS Trader Pro Or Your Broker’s Platform
If you’re using a major broker like E*TRADE, TD Ameritrade, or Charles Schwab, you already have access to a powerful day trading platform for free. All three brokers’ platforms offer custom indicators, strategy backtesting, and fast order input.
If you’re looking for a third-party day trading platform, though, we’d recommend DAS Trader Pro. This software has to be paid for through a partner brokerage, and it can be pricey – at Interactive Brokers, it costs $100 per month. But you get access to a vast number of tools, including Level 2 order data, options quotes, and direct-access order routing. Day traders will also appreciate that DAS Trader Pro offers a variety of advanced order types, which gives you more control over your trades.
Best Screener Software: Scanz Or Trade Ideas
When it comes to screener software, the best platform depends on whether you want maximum customization or a library of pre-built scans. Scanz offers the ability to build stock screeners from scratch using a wide variety of technical and fundamental parameters. You can’t define your own technical studies in the software, but you probably won’t need to – Scanz includes most popular indicators, including VWAP, MACD, and fully changeable moving averages.
Trade Ideas offers a similar level of customization, but the learning curve makes it prohibitive for many day traders to build scans on their own. However, the software comes with a huge library of premade scans that are specifically tailored for day trading setups.
Best News Scanner: Scanz Or Benzinga Pro
To stay on top of market news, we once again recommend Scanz. This platform enables you to search news and SEC filings or set up alerts for any company. On top of that, you can easily create news scans based on a custom list of keywords or using a variety of fundamental and price parameters. This comes in really handy, since you can scan specifically for headlines related to stocks that are making large price moves.
It’s also worth recommending Benzinga Pro as a runner-up. Benzinga Pro offers an audio squawk feature as well as the ability to chat with the professional news desk to get analysts’ take on the headlines. However, these features will cost you – Benzinga Pro Essential costs $177 per month, compared to $79 per month for a Scanz News package.
Conclusion: Day Trading Software
Choosing the right day trading software can make a huge difference in your trading. With a top-tier trading platform, screener, news platform, or trading journal, you can maintain an edge over the market and improve your trading over time.