In this blog post, I specifically want to address students that are just getting started and help them find the right charting software.
I do! I was so excited, I saved up $1,250 to buy my candy apple red 1983 Mercury Lynx. However a few weeks later the thrill of driving to school and my job wore off.
I was ready for some new adventures.
As any teenager in central Pennsylvania would want to do in the summer, I decided to take my first road trip to the Jersey shore!
I'm now 37 years old, so back then, Google Maps did not exist. Along with my Cola, snacks, and beach towels, I had to take along a map to chart my course.
Ultimately it became the most useful tool I brought on my trip, because somewhere along the NJ turnpike I managed to get lost. As an 18 year old traveling in a different state, I quickly came to realize that it is helpful to know where you are and where you are going.
Now that I spend my time helping students at TradeSmart University, I occasionally think back to that story. The lesson I learned on my first road trip is this: To be a successful student of trading it is extremely helpful to know where you are, and where you are going.
As a trader, your charting software is one of the most important tools you can use. If you've been trading for a while it’s likely you probably have one that you can't seem to part with. If this describes you then there is a good chance that this blog post isn't really for you.
For example, Josh & Jeremy have been using Trade Navigator for a long time. Even though there are flashier versions of charting software out there, Trade Navigator is what they know and prefer.
In this blog post, I specifically want to address students that are just getting started. Many people see all kinds of charting options and throw their hands up in the air, frustrated and unsure of which one to choose.
Please don't let this be a road block that stops you from achieving your trading goals! Make sure you choose the charting software that is right for you. Make sure you utilize it while going through your action steps with your Foundations Of Stocks & Options coursework. You'll thank me!
If you're a beginner, I would recommend starting with something that is rather basic. You don't need to get bogged down with advanced stuff.
In order to make your way through Foundations Of Stocks & Options you simply need to be able to draw support & resistance lines. As well as, view multiple timeframes, see historical replay, draw trendlines, and view basic indicators and oscillators. Examples: RSI, Stochastics, and ADX. Most charting software will provide this for you.
Two examples we mention quite often are Trade Navigator and MotiveWave. TSU Charts is sometimes referenced in our teaching, however TSU Charts is no longer available.
The name of the company that creates this software is Motive Wave. They have many offerings that can be of benefit to you. Let’s take a closer look at these platforms and draw a couple of comparisons. You can find additional information about each of them in Foundations Of Stocks & Options, Level 1, Class 2.
I’ll mention MotiveWave first, as this is the software I personally use. The version I have is simple and it’s not too flashy or difficult to use. Kind of like my 1983 Mercury Lynx! It enables me to quickly pull up a stock, draw lines and apply indicators.
(This is perfect for back trading exercises.) MotiveWave is very affordable at just $99 for a basic license, and they have many plugins that you can utilize when you’re ready to move to the next level.
Bear in mind- the $99 “Charts Edition” version does not include historical data (or back trading, as we call it). You can achieve a similar effect by manually clicking to the next day. If you would like to add this feature among several others, it is an additional $250.
I do have historical data on my version, and I must say, I do like this feature a lot. For $99, it’s a great way to begin. The software itself is what costs money, and this is a one time fee. The data is up to you to provide, either through Google/Yahoo (which is free, but delayed) or through your brokerage, if they provide you with data. Some do, others don’t.
One example of a brokerage who provides data that can be utilized with MotiveWave is TradeStation, and their data is real-time data. As a Mac user, I love it that MotiveWave runs on my Mac natively. This is a personal preference, and may not apply to many of you. MotiveWave is also available for PC, so essentially anyone can use it.
Trade Navigator has a slightly different pricing model. For example, their basic version of the software is actually free, and you pay for the end of day data. The basic version will provide you with every indicator you’ll need at the beginning of your trading journey.
As with MotiveWave, you can always upgrade anytime you’d like, so you can grow with the software. Their monthly data fees range from $30 for stocks & indices end-of-day data to a full market data bundle with back testing for $225.
If you are just starting, end-of-day data will serve you perfectly fine for back trading. It is unnecessary at this point to spend anything more than you need to for data. Save your money for trading when the time is right.
Trade Navigator runs natively on PC- if you have a Mac, you’ll need to install software which emulates a Windows environment, such as Parallels or Boot Camp.
An additional option is a piece of software called thinkorswim, also known as TOS. There are many benefits to TOS- first off, it’s free when you open a brokerage account! Another big benefit to TOS is that it’s synced up with and exclusively provided by a brokerage, which enables you to virtually trade quite easily.
TOS is also available on Mac or PC, which is also quite appealing to me, and other Mac users.
TOS offers a slew of indicators, a scanner, real time data (when you fund your account with TD Ameritrade, or in Canada, TD Waterhouse) and a number of other bells & whistles. Sometimes this proves to be more of a distraction than a benefit at this point in your journey, so bear this in mind as you make your decision.
I had a friendly tech support agent spend 45 minutes of his day with me and show me the ropes of TOS.
There is a lot to it, and I found it easy to be distracted with everything that is offered. Although there are many benefits, the software itself was a little challenging for me personally. I would recommend weighing this into your decision as you choose the charting software you end up choosing, as there is a bit of a learning curve.
Similar to TOS is TradeStation. TradeStation is a very powerful piece of software which also has a bit of a learning curve. TradeStation’s brokerage rates are far cheaper than TD Ameritrade’s, which makes them much more appealing to me. Like TOS, they offer real-time data, scanning, many analysis tools, and have many bells & whistles available which may be a distraction as a beginning trader.
I wouldn’t recommend learning how to drive a stick shift with a Ferrari, and I probably wouldn’t recommend TradeStation or for that matter TOS for beginners either.
There are many options out there for charting software that I haven’t covered in this post. If these solutions don’t work for you, I would recommend speaking with other students on the TSU social network TradeSmart University Community, read reviews online, and search for yourself. If you have any observations or suggestions to offer to students looking to map their trading journey, feel free to comment below!