Technical Analysis Software

A technical analysis software can help you with the charting, analysis, and reporting functions when you try to review and predict forex market. If you have been trading for some time and learn it the hard way, you must know how confusing it is to check various charts and study numerous prices and volume data just to make a good entry decision.

Using a technical analysis software can greatly help you to make the best entry and exit decisions. The features of this software may vary from the one that only help you in specific area to the one that will automate all the process for you. These are some features of a technical analysis software:

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1. Charting
Charting is the bread and butter of technical analysis. Basically, no technical analysis can be done without charting. The chart form is a graphical interface that presents price, volume, and technical analysis indicator such as Elliot Wave, Fibonacci, Gann Fan, etc. You can select a time frame to display based on your preferred analysis strategies.

When selecting a time frame, you can choose from tick (seconds), minutes, daily, weekly, to monthly. You can also select a time range by date and access to certain historical data with varying time frame.

2. Back Testing
Back testing is used when you are testing various trading strategies or systems. You just simply apply the strategies to a certain time period from the historical data and see how it performs against the market movement during that time.

While this method is good to a certain degree, rely on it too much have caused the fall of many traders. The reason is they tested their strategies with historical data and keep modified it so it can be a profitable strategy during that time period. These traders usually forget to test the strategy against current market movement. This is very fatal; it is useless to have a strategy that worked in 1997 but fail at the current market.

If you have a strategy that worked with historical data, open a practice account and have it against current market; if it can survive and give you adequate profit for at least two months, then you have a working trading strategy.

3. Alerts
Alert software is using to notify the trader if certain conditions are met in the market. For example: the price has reached certain level specified before. This notification will be send to the trader via screen pop up, email, short messages, instant messenger, or any other communication means.

4. Custom Indicators
In a good technical analysis software, you can use, customize, or combine various standard indicators such as MVA (Simple Moving Average), EMA (Exponential Weighted Moving Average), LWMA (Linear Weighted Moving Average), etc. You can even create a new indicator that meets your need.

5. Broker Interface
There is technical analysis software that can be integrated to a brokerage platform so you can still trading with a familiar user interface. This will also make it easy to trade since you can just make an entry from the chart.

Using technical analysis software can greatly help you to analyze the market, make entry and exit decisions, and predict future market movement. If you enjoy analyzing market and don’t want to depend on somebody else for that, this software is a must have.

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