Charting Preferences for Technical Analysts

Every trader has a unique trading style and preference when it comes to analysing charts. However, it can be quite perplexing when it comes to choosing charting softwares, with the likely exception being FX traders. While there are quite a number of them that offer conventional charting along with commonly used trading tools, there are those with advanced features that assist traders in building complex strategies and customised trading programs. So, how does a trader go about selecting one that can be used to the maximum!!  After all, charting softwares come with a cost and unless the features match the panache of the trader, it will end up as another junk application on the desktop.

Let’s take a look at some of the features of two charting softwares; Metastock and Amibroker. They are reasonably priced compared to some of the high- end terminals and also give traders the option to program and execute custom built strategies. Both these softwares have been in existence for a long, long time and are widely used by traders across the world.

Meta-Stock

Developed by Steve Achelis in 1985, Metastock is still in vogue after 30 years. The tools are extremely user- friendly and even traders using it for the first time find it more intuitive than most of the other charting softwares. It comes pre-loaded with powerful trading tools that simplify trading decisions. Some of the popular features are-

• Explorer - Scans the market for securities that match selected criteria
• System Tester – Used to back-test strategies
• Expert Advisor – Carries out multiple analysis on a selected security and generates trading signals
• Metastock forecaster – Uses patent pending technology to define stops and profit targets.

Metastock can be used by both beginners and professionals alike to analyse all aspects of the financial markets; cash and derivatives. It delivers data from all the major global exchanges in addition to EOD updates for positional traders.

However, traders looking to design advanced trading systems may find limitations with Metastock as the software can only analyse Metastock formatted data. Although Metastock provides SDK for developing plug-ins, it does not have a very active community.

Amibroker

Amibroker has one of the most technically advanced tools for carrying out technical studies. Although many traders find the interface a little complex, it features many advanced analytical tools. It comes with around 250 inbuilt technical indicators and allows users to create more indicators based on personal requirements. The real strength of Amibroker lies in its speed and back-testing features.

Some of the key features are-

• Portfolio level back-testing - Test trading systems for multiple securities and trade portfolios based on risk/reward parameters.
• Walk forward testing - Automatically tests the trading system for in-sample (used to design the system) and out- of- sample (reserve data that has not been included in the optimization model) performance.
• Monte Carlo simulation- Can test trading systems in complex market conditions and model probability based on different outcomes.  

Historical data for Amibroker can be fed from a number of sources like Google finance, trading platforms, websites offering free data, real- time data providers etc. The Amibroker Formula language (AFL) is a powerful programming tool and is used to define custom indicators, trading rules and algorithms that go in building complex trading systems.

Amibroker is an excellent charting software with extensive features and most traders using the system will rarely get an opportunity to use the vast range of indictors from the library. It could overwhelm someone who is new to using charting softwares, however if a trader is looking for an intuitive interface, it just might be too much to handle.

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