Owning part of a successful business without having to take the pressure which comes along with day to day management of running one – is the dream job for most of us.
Stock trading makes this a reality for people like us.
By owning stocks in a given company, you can maintain your distance and watch your company grow from one level to another.
Stocks are excellent financial instruments that allow you to grow your income by doing nothing but collecting profits at the end of a financial year.
This gives you the opportunity to witness the growth of your assets while all you must to do is understand the ways in which the stock market works and patiently make pragmatic market decisions.
With patience and precision, stock market trading can provide you with unhindered profit and growth.
Investing in stocks is considered to be an integral part of an investment portfolio.
Thus, it is important for you to have a complete understanding of what stocks are and how to trade them before embarking on your journey to financial freedom.
Stocks are traded in stock markets; hence it is vital to understand the stock market as well.
Like all other fields of money making, stock market trading also requires an in-depth understanding of how to make investments, when to buy or to sell your stocks.
Reading market signals is considered to be of utmost importance and this would lead you to all the wealth you were hoping to acquire!
Stock market has gained quick popularity over the past few years and this is mostly due to the advance in technology which has made stock market trading open to a larger crowd.
One of the measures by which Stock market enthusiasts have tried to navigate through the Indian stock market with ease is through the use of Charting Softwares available in the market.
These charting softwares make it easier for traders around the world to understand the movement of the stocks better – through charts.
However, interpretation of charts can be slightly tricky and that’s where, the charting software with its additional features comes into the picture.
If we were to look at 4 salient functions that a charting software MUST be able to execute, they would be :-
Helping the trader analyze his/her trades! What can be more important than that?!
The software must be enabled to help out in simulated trading, check the risk profile, help out with the probability analysis, check the fundamentals and back test their trading strategy.
“Scanner” feature on the charting software should provide the ability to scan the market with different technical indicators so that traders can pick what all technical indicators they want to run and scan the market for the stocks that satisfy the technical indicators.
Here the trader can also scan for the fundamentals like the criteria used in the 7 step trading strategy.
For more information on the 7 step trading strategy, view the post here : http://stockmarketsignals.com/how-to-invest/7-steps-leading-successful-trading-stock-market/
Market watch allows traders to check the quotes, creates alerts etc.
Obviously! This is a charting software – how can we work without well defined charts?!
The software must enable the user (trader) to view different types of charts to understand the market better.
In the next section of this article, we would be looking at what are the possible types of charts a stock charting software must have.
Keeping these 4 salient functions in mind, let’s look at an elucidated format of functions that your favorite charting software MUST posses!
Through the course of this post, we would be discussing the 7 attributes that can be considered as features explored in an all inclusive Charting Software.
And, these 7 attributes to look out for in a stock charting software are:-
1. Traditional to Exotic Chart Types
Traditional Charts would include the most commonly used charts in stock market analysis.
Some of the most basic chart patterns include : OHLC Charts, Candlestick charts, Dot on Close, HLC Charts and Line Charts.
Open-High-Low-Close or OHLC bar charts provide information on volatility.
Volatility is calculated by the height of the bars.
The faith of the buyers and sellers along with the price range between the open and close marks also affects the measurement of volatility.
OHLC Charts also have another component called the OHLC Bar Colours which helps to identify chart attributes through colour.
Unlike the traditional OHLC bar charts, candlestick charts are more visually appealing and thus, many traders find it easier to interpret.
Each candlestick provides a simple picture of price action.
An analyst can quickly compare between the opening and closing prices as well as the high and low price.
Candlesticks with hollow bodies indicate buying pressure and candlesticks with filled bodies indicate selling pressure.
Candlestick charts come with the option of colouring prices to improve one’s understanding of the chart.
The Candlestick’s outline and body be coloured black or red, depending on the candlestick’s opening and closing prices and the previous day’s closing price.
If the closing price is higher than the opening price, the body will be displayed hollow.
If the closing price is lower than the opening price, the body will be filled red.
Dot On Charts
Dot On Close chart visually presents the data series as a sequence of dots that are not connected by a line.
In a Dot on Chart, dots graphically represent the Close price of each group.
The colour and size of the dots can be customized by the users in most of the softwares as well.
Most of the softwares also enable you to change the weight or size of each dot as well.
These are usually bar charts which represents data as a sequence of bars.
A HLC Chart has two major components : High/Low and Close.
In a HLC Chart, market data is represented through a bar which is a vertical line connecting the High and the Low price points – points which further on represent the range of a stock’s price movement over a defined interval.
The bar’s close component represents the price of the last price movement.
Lastly, the most basic type of charts available in the market are ‘Line Charts’.
Line Charts are created by plotting a line between the closing prices for each period set on the chart.
Line charts are also used to visualize the direction of prices and to understand the extend of reactions in trends.
Let us now look at the more relatively unknown range of chart types – the exotic charts.
Some of them we would be dealing with through the course of this post are:
Kagi, Kase, Line Break , Momentum, Point & Figure, Range Bars and Renko Charts.
Kagi charts graphically represent a combination of connecting vertical lines whose thickness and direction is based on price movements in the market.
There are softwares available in the market where the Kagi reversal amount can be specifically represented as either a fixed price or a percentage.
Kase Charts are bar charts which use real price data to represent a price range according to a trader’s specified target range value.
These charts bear resemblance to a traditional chart, most accurately with that of a candlestick chart except for the size of each bar which is based on the target range value and all bars are of the same size.
Line Break Charts
These charts are also known as “three line break” charts.
Line Break Charts derive their name from the concept that there are three consecutive lines plotted in a direction, the close must “break” the most recent three lines in order to draw a line in the opposite direction.
For example, once there are three consecutive up lines, the close would have to break below the low of the prior three up lines before a down line can be drawn.
Momentum Bar Charts
These are standard vertical bars, with opens, highs, lows and closes along with having the specified price range in place of charted units of time/tricks.
Point & Figure Charts
These charts work on changes in price by integration of time and volume through which the relativity of price can be measured with reference to previous levels.
They display only relevant price movements.
These charts are a lot like Line Break charts but figures are graphically represented by a brick of a fixed, equal size.
Range Bar Charts
They focus only on price changes and only if a range is complete. Each bar has a specified price range.
Now, you must be getting confused reading about how each of these chart patterns could help you out?!
The trick is to jot down your expectations from a chart – and narrowing down the ones that best suit your needs.
The good thing is that all these exotic chart patterns in their own way save time and assure better market analysis.
2. Exclusive number of indicators
The best charting software should have the best (and all-inclusive) set of indicators.
Market Indicators are one of the initial features a chartist tries to master.
Because these indicators are a set of technical indicators used by traders around the world to understand and predict the market movements.
These indicators are what gives us an idea about how the marketing is faring and how it might fare in the future.
These indicators can be roughly divided into two types :-
Primary and Secondary Indicators.
The two most reliable yet basic market indicators are : price and volume.
Whatever indicators are available to us in the stock market today (and the innumerable new ones which pop up every other day) are derived from the logic of price and volume data.
Therefore, you must be in sync with the understanding of price and volume as its working on the market today to get a hang of the current trend in the stock market.
These primary indicators show how price and volume paired with historical market data is all you need to analyze the most accurate of current market trends, strength and direction.
Having said that, the secondary indicators further clarify these details for us!
Secondary Indicators are based on the descending divisions that could be potentially plotted on a stock market graph.
These elements of division are used by seasoned traders / chartists to analyze a chart for better accuracy.
Advance Decline Line
The first line is used to plot the number of advancing shares juxtaposed with the number of declining shares.
Often, a small number of hefty stocks are shown to make big moves in the market that could play with the price action on a chart index.
In such cases, this line along with the data it provides helps to understand whether a lot of stocks are following the direction of major indexes on the given day.
Short Turn Overbrought/Oversold Oscillator
Short Term Overbrought / Oversold Oscillator comes right after the Advance/Decline Line.
It could be seen as a 10-day moving average of the number of stocks moving up in price pitched against the number of stocks moving down in price.
This calculation does not include stocks whose prices did not change from the previous close.
Some investors may use this indicator to take a contrarian position when the market has moved too in far in one direction over a short period of time.
10 Day Moving Average (Up and Down)
Right after the Short Term Overbrought line come the two 10-day moving average lines.
These are used to show the the volume of all stocks on a particular stock exchange (for example : AMEX, NASDAQ, NYSE) that are moving up or down in price.
There is a Blue line and a Pink Line that feature in this 10 Day Moving Average.
Blue Line : This shows a 10-day moving average of the total volume of all stocks on a particular stock exchange that are ascending in price.
Pink line: This shows a 10-day moving average of the total volume of all stocks on a particular stock exchange that are descending in price.
When the two lines cross, there may be an indication of a trend change in favour of whichever line is going up.
10 Day Moving Average New Highs and New Lows
The last part indicate two 10-day moving average lines which graphically represent stocks reaching new highs and new lows, with relevance to their specific exchange.
Blue line: This shows a 10-day moving average of the number of stocks creating new price highs.
Pink line: This shows a 10-day moving average of the number of stocks reaching new price lows, according to the prices seen during a market close.
When the two lines cross on the chart, it might be an indication of new a trend change in favour of whichever line is ascending.
Apart from these, from one of the four salient functions mentioned before, the “scanner” is also an indicator.
3. Multiple Time-Frame Analysis
While looking at the stock market, try to not look too close.
Move yourself away and take a look at the entire scenario – and not at just what you might want to see!
Remember that a trend on a longer time frame got more time to develop.
Therefore, support and resistance levels are more significant on longer time frames.
Keeping this in mind, understand your preferred time frame.
There could be possibly 5 different time-frames that you could look at :
Of course, apart from these, chartists are developing more varied time-frames that could be analyzed for better market performance.
Looking at different time frames can give you a better idea of how the stock is faring in the market.
Is this going to be confusing?
You bet it is !
For a new trader, seeing different time frames together can prove to be highly confusing as each time frame looks different!
For example, a stock (for example. Apple) may be doing very well in a 5 minute time-frame while faring rather badly in a weekly time frame.
So, why is understanding time-frame important?
Each time frame affects the other, in the stock market.
It gives you a clearer perspective of entry and exit points in the market.
If you know a stock is going well at a particular time frame, you’ll know that’s the time to enter the market to trade that stock. Same applies for the exit points.
The trick lies in understanding which time-frame of which stock works out best for you.
Finding the perfect charting software which can help you do that, is the best thing that could happen in this scenario!
4. Comprehensive Historical Market Data
“History Would Repeat Itself” – this is the backbone of Technical Analysis.
Technical Analysts believe that this repetition of movements indicates that the specific stock movement can recur in the future as well.
Thus, technical analysis believes in researching about the past data to understand how the market would behave in the future.
Historical Market Data is the only way we get to know how the market has performed over the years.
Our choice of certain stocks also depend on how they have fared in the stock market through the years.
For example: Stocks like Microsoft or Apple have gained popularity due to their products in the market.
This has affected the movement of their respective stocks in the market.
The internet provides a comprehensive list of details regarding historical market data.
5.Visualization of Market movements in real time
Graphical representation of market movements in real time is very important.
There are 5 pivotal stock chart patterns that all of you must be well aware of !
- Head and Shoulders
- Triple Bottom/Top
- Double Bottom/Top
These chart patterns are named according to the shape they form on the chart.
These chart patterns are mostly used to understand price movements and are considered to be highly helpful to understand which direction the market might move in the future.
6. Chart Analysis Done with Ease
Now that we have dealt with the top 5 fundamentals to look for in the best charting software, you must also remember that the software must help you navigate through the ordeal of chart analysis with ease.
Chart Analysis could be quite confusing for beginners in trading – especially if you have had no exposure to graphical representation of statistical data in the past.
Chart Analysis can be best understood through Market Psychology.
Market Psychology can be defined as a phenomenon where the fear and greed emerges as a result of a collective participation of traders with respect to the market trends.
How do you deal with this easily then?
Your charting software helps you map the support and resistance levels as visible in the stock market, through which you can understand the market psychology prevalent.
Doesn’t this sound easy?!
Trust me, with the right kind of software, it is !
7.Visually appealing highly customizable charts
We’re bringing this list of 7 attributes to a close by going back the first point about customizable charts.
If you’re given a faded, grey chart to study with innumerable confusing chart patterns on it, would you be excited to analyze it?
Instead, a visually appealing chart, with appealing yet highly customizable elements, will compel you to experiment with market patterns – inturn, helping you learn and work more efficiently!
Make sure you choose a charting software which doesn’t offer you a drab for a chart, but gives you the option to customize charts that you might need to study everyday and analyze further more to help you make money!
Next, let’s look at the best charting softwares available to us in the Indian Market.
Each of these softwares have been ranked according to precise market analysis and enlisted according to market ranking.
Rank# 1 – eSignal
Here is quick review of eSignal software for Indian market.
Pros/strong points of eSignal-
eSignal trading software has an advanced charting system and graphs with fast updates of trading market.
It provides real-time updates in a way that it also automatically alerts you through email regarding best timing for trading.
Thus, these are really key parameters and reasons why it has been the first choice for reputed brokers and traders in India.
Market data and Technical Indicators represented by this software have been acknowledged as key decision maker for top traders in India.
It also represents trading option/future overview with technical analysis also.
Interference of this software is really user friendly.
Price of eSignal in India-
In India, eSignals has launched many versions in India ranging from $45 to $295 per month.
However, its basic version is available with monthly $45 (Around Rs 3000 monthly) and advanced version with monthly $145 (Around Rs 9500 monthly).
These two versions have been more popular in India than most advanced ones which are also offered by eSignal India.
Cons/weak points of eSignal-
Pricing is too high for entry/medium level trader.
Most advanced version is upto $295 (Around Rs 18000 monthly) which will surely not cover your initial ROI (Return of Investment).
It is not dedicatedly customized for Indian stock market in a specific way.
It is just representing international version of software lacking real-time news feed or key scenario/events in Indian market.
It also does not have any Indian version app for android.
It is recommended software for desktop interference only which makes it less desirable in the context of being mobile.
These weaknesses of eSignals make it less preferred choice for entry level traders in Indian market.
Rank# 2 – Metastock
Here is quick review of Metastock software for Indian market.
Market analysis with automated reports is key point of it.
Pros/strong points of Metastock-
It has really better and précised market analysis with charts and graphs which is coupled with automated reports in most professional and accurate manner.
It ranks even superior to eSignals in this particular context.
Market data and technical indicators are well-represented and well-understood as per feedback by actual users in India.
Interference of software is also good.
Price of Metastock in India-
It is priced from $99 to $150 per month in India.
Basic version is available in $ 99 (Around rupees 6500) per month and advanced version at $150 (around rupees 9500) per month.
Cons/weak points of Metastock –
Like eSignals, Pricing of Metastock is also too high for entry/medium level trader.
Like eSignals, It is not customized for Indian version specifically for maket news and financial events, etc.Like eSignals, It also does not have any Indian version app for android platform.
Rank# 3 – Amibroker
Here is quick review of Amibroker software for Indian market.
Pros/strong points of Amibroker-
It is one of best software for entry/medium level traders in Indian market because cost is more affordable without compromising with quality of trade market analysis and stock charting/graphs.
It also has well-understand representation of market data with indicators, etc.
Interference is average but fits nicely with cost of this software.
It also have android platform app for its users with name “TradeSender:Amibroker 2 Mobile” which is good for getting mobile.
Price of Amibroker in India-
It is priced from $79 to $339 per year (12 months) in India.
Basic version is available in $ 79 (Around rupees 5000) per year and advanced version at $339 (around rupees 21000) per year.
It has really great pricing for traders in India.
Cons/weak points of Amibroker –
Like eSignals and Metastock, It is not customized for Indian version specifically for maket news and financial events, etc.
In actual reviews by Indian customers, it seems that they had to put even special efforts to grasp real-time trading market news and insights.
Desktop version does not have good user interference while using software.
It is not very much user friendly.
Above are top trading software in India which provide really quality analysis.
These are highly recommended software for you and you can do unlimited trading with maximum benefits.
There is no commission/brokerage amount to be paid for trading stock each time.
But below are brokerage software/trading technical options that have recently became more famous in India as top trading methods equipped with quality stock analysis, charting.
These provide free subscription but takes discounts from each trading session.
Note:- Below mentioned “Brokerage type software” are not recommended for trading because you “lose high amount as trading commission fees per stock trading”.
It does not provide you high benefits.
Sharekhan is ranked as fourth in overall trading softwares in India for Indian stock trading software.
Although it is not dedicated trading software but it is brokerage type trading platform.
Rank# 4 – TradeTiger “Sharekhan” (Brokerage Type)
It provides real-time analysis, charting information with real-time customer support to let you really understand technical analysis, etc. Best for entry level traders.
Fully Customized to Indian market and gives all information related to any important event in stock market, etc.No initial cost for purchasing software/application.
It has android based app platform also.
For your actual stock trading, It takes heavy commissions per stock value and not recommended for someone who invests higher amount for trading.
You will not be able to secure good profit because you lose some amount as commission.
Rank# 5 – ICICI Direct (Brokerage Type)
It is ranked as fifth in overall trading software in India.
It is also like sharekhan software where you can join free but have to pay some amount as commission per trading order.
Customized to Indian share market and It has android based app platform also.
By now, you must have figured out what you need to look out for in the best charting software!
This post elucidated the salient features you need to keep an eye out for while choosing the best charting software available in the Indian Share Market.
Do you need an android based charting app or one that is not very heavy on the pockets?
Choose a charting software which best addresses your needs.
Do you want to understand charts better ?
Do you want to learn more about the coveted ways of the stock market?
Read and learn more on – www.stockmarketsignals.com/blog