Trading Charting Software & Data Packages - An Overview
Whenever a stock or futures trade is made, it has to be reported to the exchange at which the stock or futures contract is listed. For example, a trade in Microsoft (MSFT) executed on the Instinet ECN has to be reported to Nasdaq. The exchange compiles this data as the Time & Sales for this particular stock.
Time & Sales Data
This Time & Sales data is simultaneously distributed to various data vendors like Reuters, Bloomberg and IDC, who in turn re-sell this data to various other parties like brokers, money managers, other 3rd party resellers like eSignal and individual traders and investors. Raw financial data by itself is not particularly user-friendly except to the rare breed of traders who call themselves tape-readers. For the majority of other traders and investors, specialized front-end charting software are available to chart this data and present it in such a way as to be useful.
Trading Charting Software
Various charting software and data packages are available and they are put together differently to suit the individual needs of the various players. It is therefore imperative to know what is available to provide a better chance of finding a suitable charting software and data vendor for your needs. In the early days of online trading, charting software and datafeeds were offered as separate bundles for e.g. excellent standalone charting programs like Metastock, Tradestation and Supercharts were sold separately from the datafeed provided by vendors such as Reuters. The current trend however is towards complete charting software and data solutions like what eSignal and QCharts offer.
If you are a casual investor and you have very minimal charting and data needs, you can actually obtain free finance and charting services from Yahoo Finance, StockCharts.com or ADVFN, to make your trade decisions. The drawbacks to these free services are that they normally are delayed by at least 15 minutes and the user has limited or no flexibility in performing various technical studies with the data.
Data for Technical Analysis
On the other hand, there are some very sophisticated charting software and data packages that allow you to present the data in a myriad of ways so as to enable you to try to understand a trading instrument's behavior. Generally, trading data consists of the basic components i.e. Date, Time, Open, High, Low, Close, Volume and Open Interest. With these basic data, a trader can perform basic technical analysis like Candlesticks, Stochastics and MACD. Advanced analytics like Elliot Wave analysis can also be performed if the trader prefers. The charting software and data are also generally packaged as End-of-Day, Real-Time and Delayed trading solutions. Read Best Technical Analysis Software to get an idea of what TA software are available.