Technical Analysis software

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marco096

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Hey guys,
I have been trading for a little while now and getting increasingly interested in technical analysis. I was wondering if some of you know a good software offering good technical analysis data. It doesn’t have to be free necessarily, but I do not have a huge budget to apply on it either.
Thanks!
 
?.
im looking for a software. does the CMT order has one? couldnt find.
 
I think you should just do a google search for “technical analysis software [your machine (i.e. mac/windows/linux/stone tablets)]” and see what comes up.
The American Association of Individual Investors occasionally does a software comparison, a search through them may be useful to you.
 
Marketsmith is around 1’000 bones per year for the naked version. Man, I wish I was the guy behind that shop.
 
Don’t waste your time or get caught up in the hype that is technical analysis, more specifically chart reading. I have never heard a single intelligent portfolio manager ever refer to “technicals” as a reason to purchase a stock. Technical analysis is just another thing for the talking heads at CNBC to fill time with for all the muppets that think they know what they are doing to be captivated by and for the brokerage firms to lure people into being “active traders”. It makes me cringe everytime I see a commercial on CNBC with some middle age guy sitting in his home office reading the charts with a bunch of spinning numbers and charts with overlays. Rely on the fundamentals and general trends and you’ll come out ahead. I must admit that on my brokerage chart settings I do have the 50 and 200 day moving averages overlayed on the charts, but I never use that as a basis to make a trade.
 
Palacio,
I do agree with you that fundamentals may be more useful, but only for medium/LT investment horizons.
For day & swing trading, technical analysis can provide some useful insight. I hardly believe you never heard a portfolio manager do a purchase decision based on technical analysis: it does happen.
FYI, studies shown that the probability of the market crashing by 10% in a day is 1 on 1000 under the random walk hypothesis. Thus the prob of that happening two days in a row is 1 on 1000 times 1 on 1000, etc. Empirical evidence showed that crashes of 10% for a couple of days in a row happened way too many times in the last century (given the absurd probabilities under the RW hypothesis) to believe markets follow a random walk. Hence technical analysis should not be totally discarded from your toolbox.
 
Technical analysis is often used for timing entries and exits. Most investors don’t use it for deciding on what goes in the portfolio, but they may use it to figure out when to pull the trigger. Do you want to buy something in free-fall just because the valuation looks good? Lots of people will look at the technicals before acting.
If you’re a trader, techncial analysis is only one part of the process. The other is position sizing and choosing a technical system that you can be disciplined to apply.
Technical analysis is potentially more valuable in areas where there aren’t clear fundamentals (like currencies) or where the latency it takes for valuation effects to appear can be looong.
 
bchad,
as i mentionned in my previous post, it would not be for setting up a portfolio. It would be for day and swing trading.
I agree with you for portfolio composition though.
 
marco096 wrote:FYI, studies shown that the probability of the market crashing by 10% in a day is 1 on 1000 under the random walk hypothesis. Thus the prob of that happening two days in a row is 1 on 1000 times 1 on 1000, etc.
Click to expand...
That’s true (i.e., the random walk hypothesis is applicable) only if:
  • The crashes are statistically independent, and
  • The probability of a one-day crash doesn’t change.
In short, that assumes that one-day, 10% crashes are Bernoulli trials. I strongly suspect that they’re not.
(We appear to agree on that point.)
 
My comments were more in response to PalacioHill.
As for day trading, I don’t really know how well it works It seems to me that on an hour by hour basis, there tends to be little news that is relevant to valuation, and so countertrending strategies may work better on this time scale as trading mechanisms figure out how to balance supply and demand.
How to compete with HFT on that score is hard to say, particularly on the day-trading scale. For swing trading, you’re not competing directly with HFT, but it’s also hard to say whether technicals are going to help that much.
 
CQG is the best but not sure how much it costs (was always provided to me). I’ve heard that as far as free software goes, Ninja Trader is the best.
 
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