How Day Trading Software Can Lead to Rapidly Improved Profitability

By Peter Skotnicky

To make money in day trading, you need to have both a good education in how stock market trading works, and the right tools to help you get the most out of market trends and the like. Day trading software, once the province of high end trading houses, is now affordable enough that home based investors can use it. This has changed the land scape of stock trading in ways that haven't been seen since internet trading houses like e-Trade.

What day trading software does is provide you with both an automatic order placer, something that will issue buy and sell orders according to parameters you've given it, and an information aggregator and analytical tool. Automated buy and sell orders have been part of brokerage accounts for quite some time; what's changed is that the tools have become more refined.

Where automated buy and sell orders used to be just set on price targets, they can now be run to hit a range of variables - this allows a great deal more sophistication in the trading model used by day trading software. When combined with deep analytic tools that research data from multiple sources, it's turned day trading software from the equivalent of a notebook organizer to having a somewhat overeager research assistant who can make some trades under very limited boundary conditions.

More and more of these trading tools are becoming aware of trading techniques like short selling and using leverage properly, but at this stage of the game, if you try and let a trading tool act as your financial advisor. Think of these tools in much the same way that you'd regard a chainsaw or other power tool: It can make you much more efficient, but you need to take appropriate safety precautions, and you don't let them run unattended.

It's the way that the analytic side of the equation has improved that has opened the frontier here. While stock markets are too complex and too chaotic to ever be completely knowable and predictable, there are tools out there that can tell you if the stock market fits patterns and flows consistent with trading behavior within its database. This is software that can make stock picks for you, but to make money, you need to understand why its recommendations are being made to act upon them with anything resembling sensibility.

No matter how well packaged the analytic tools are, it's still you, as the human trader in the decision making loop, that has to decide how you're going to invest your money. Ultimately, what these tools do is free your time up from the day to day tedium of the job that is day trading, and let you focus on the big picture, strategic level decisions that are the key to making money.

And that's the rub - you cannot use these tools as a substitute for treating day trading as a job; these aren't going to be a "invest money in your pajamas and make millions while you surf the web" deal.

Like any other job, if you don't pay attention to what you're doing, things can go wrong, no matter how much automation exists to support you.
Old school investing was only the beginning; with stock picking software available, investors are dominating the market without an ounce of sweat.