Trading Software (Execution System)

'The Caveman Investor' wrote this page mostly for Day Traders and Active Traders. These are folks who want to link powerful tools and software applications into one robust execution system so that they can trade with the same information and speed as the big brokers and institutions. Below, we examine each piece of the execution system and let you know which provider we think is the best.

The links in the execution system chain

• Market Data Providers (information)
• Internet connection (pipes)
• Trading software (trading goggles)
• Broker (execution)

• Quotes and market data
• Datek applications
• Stocking screening, portfolio management, theory testing and more

Market data providers (information)
Every second in the market creates oceans of quotes and news items on stocks, options, foreign exchange, commodities and indices. Companies like Reuters, Bridge, Bloomberg and S&P Comstock, gather this information and send it to your trading software so you can view, chart, analyze and manipulate it to meet your trading needs. Any delays or errors will cost you thousands of dollars in a matter of seconds. Be wary of any services offering “free” Nasdaq Level II quotes or other market data. The money losing trades you make because of the slow and unreliable service will more than pay for this “gift.”

We prefer S&P Comstock’s data feed. It’s arguably the fastest, most reliable feed on the market. It delivers market data from more than 140 sources and exchanges worldwide. Data categories include equities, futures, derivatives, commodities, foreign exchanges, fixed income, news, earnings estimates, fundamental data, Nasdaq Level II, research and market commentary. Combined with trading software, it costs $200-$300 per month depending on the package you order. This is comparable to other high-end data providers. Comstock has three redundant ticker plants and "hot-swap" servers to guarantee its data is sent in real time to your PC. S&P Comstock has years of experience serving all levels of customers including private investors and Day Traders as well as brokerage houses, institutions and Web sites like AOL. [top]

Internet Connection (pipes)
You diminish the value of your data feed's speed and reliability if you have a slow and unreliable Internet connection. If you have any doubts, your best strategy is to get a cable modem or ADSL (Asymmetric Digital Subscriber Line) connection. If you're lucky enough to have a choice, pick cable over ADSL. It's probably the fastest and cheapest option on the market. If you're stuck with regular phone lines, you have two options. Use the same Internet Service Provider (ISP) that your broker uses for its backbone. This minimizes the number of communication links between you and your broker and ensures the most direct and efficient execution. Or, choose a large, nationally recognized Internet service provider like Earthlink, AT&T WorldNet or MCI Internet. Avoid satellites as they're still quite expensive and unreliable. Click here for a complete discussion of your Internet connection options. [top]

Trading software (trading goggles)
Like special goggles for traders, your trading software will help you see and make sense of all the information flowing into your computer. The most popular trading software is Real Tick III—a software application developed by Townsend Analytics. Most Nasdaq Level II software applications provided by companies like PCQuote are based on Real Tick III. Real Tick III offers unlimited creation of Nasdaq Level II screens, stock monitors, position managers, real time chart displays, interest list (unlimited stock groups), stock tickers, position manager, stock monitor and audible alarms. With this intuitive, real-time interface, you'll be able to quickly retrieve and analyze market data and make lightning fast trading decisions. Here are some sample screens:

Sample Nasdaq Level II Trading Screens:

• Level II Screen
• Level II Screen with Execution System
• Stock List (Market Minder Screen)
• Time & Sales
• Fundamental Analysis
• Chart I
• Chart II (Candlesticks)
• Order Entry Screen
• Orders
• Positions
• Screen Shot
• Single Monitor Screen Shot
• Dual Monitor Screen Shot
• Additional Screen Shots

If you decide to pass on Real Tick III, we recommend these advanced executions systems:

• CyberTrader
• CyberX
• Trade Cast
• Redi Plus [top]

Broker (execution)
The last link in the chain is a broker that caters to Day Traders by helping them connect the links. This includes brokers like A.B. Watley, The Executioner and MB Trading that provide a reliable data feed, intuitive trading interface, rapid-fire order entry and lightning fast execution at the best possible price. While you'll be safe with any of these brokers, we recommend The Executioner because:

• It offers the best mix of services to novice and expert Day Traders at a reasonable price;
• Uses S&P Comstock as its data feed provider;
• Provides trading software that's based on Townsend Analytics' Real Tick III and is compatible with the Neologicfx Trade Master Simulator;
• Places all trades through Terra Nova Trading;
• Clears all trades through Southwest Securities;
• Partners with The Pristine Day Trader—one of the best training firms in the business.

Quotes and market data
You’ve heard so much about Nasdaq Level II quotes. Here’s where you can get them:

Datek applications
There are several programs developed by third parties that help speed the ordering process at Datek. Here are three of the best:

DaSlinger
The most robust and probably the best third party interface for Datek’s Express Server. It uses using frame technology and Java script and relieves traders from having to retype common order information such as the security symbol, quantity and password. It also helps traders enter more profitable short sales because it allows them to “rapid fire repeat" the order as quickly as the rejections come back for lack of a plus tick. Also, special buttons allow traders to quickly switch servers when one of Datek’s servers malfunctions.

Datek Express Server Enhanced Order Entry Form
A specialized interface to improve the order entry process on Datek’s Express Server. Facilitates the entry of multiple orders on Datek Express Servers without requiring password entry each time. Also enhances the order entry process by providing controls to quickly adjust the quantity, symbol, price and more.

Super-Express for Datek
A streamlined third-party HTML interface for Datek's Express Server. Provides a static window where traders can "pre-load" up to 5 orders and send them to Datek's Express Server in one click. Because of the framed interface, it's possible to keep the order-entry window on-screen at all times, allowing traders to queue-up orders and save time.           [top]

Stocking screening, portfolio management, theory testing and more

Chartsmart 2000
Screening program that allows users to filter from over 15,000 securities, on the U.S. and Canadian Exchanges, based on preset criteria. For example, users can filter out all securities trading on NASDAQ or the OBB that are the most active traders, trading at year lows, with prices between $1.00 and $5.00. Filtering criteria includes trading volume, number of trades, price volatility, price, earnings, % the current price is from its cyclical high or low, and more.

Day Traders' Assistant Plus
A shareware program that helps Day Traders keep track of open positions, profit and loss and available buying power.

EZStock
A high-end, low cost tool for the individual investor that combines automatic online data retrieval with offline analysis and forecasting. Automatically downloads stock data and all other market information from Internet sites and stores them in a database. Matches stock selection criteria and performs analyses and forecasts using well-established industry standard methods. Portfolio manager tracks stock trading history and analyses the risk and return of an investor’s portfolios.

First Alert
Stock screening software that filters an unlimited number of symbols and then alerts the user when they match preset criteria. Supports several data feeds.

IQC Chart
Java stock screening and charting application that combines Web based data gathering with a program that crunches numbers, scans through extensive databases for stocks that fit preset criteria, and creates charts that users can analyze with technical indicator overlays. Real-time data automatically updates throughout the trading day.

Medved QuoteTracker
Connects to Web sites that users select from an available list and extracts stock quote information. Also allows maintenance and tracking of stock portfolios, shows live intraday charts of collected data, alerts users when preset price goals are reached, and provides an easy to use interface to Big Charts for historical charts.

MetaStock
Offers a family of trading software packages that allow traders to create, test, optimize, and automate their trading systems. Includes flexible charting, a complete collection of trading indicators, powerful searching, personalized tutoring from industry gurus, and more. Supports a range of data feeds. The Web site also includes Steve Achelis' Technical Analysis from A to Z online—one of the best places to learn about technical analysis.

Mobeo Pager
Provider of wireless, portable, real-time financial information. Delivers real-time quotes on over 150,000 stocks, options, futures, treasury, foreign exchange and other critical market data to banks, financial institutions, hedge funds, money managers, individual investors and traders.

myTrack.com
A trading software provider that also happens to be an online trading firm. Known more for its software, myTrack offers four software packages with increasing levels of sophistication and information.

Omega Research ProSuite 2000i
A popular trading suite that combines TradeStation 2000i and OptionStation 2000i, with a new scanning tool—RadarScreen 2000i. Users can design and monitor trading strategies for all markets—securities, commodities and options. Includes historical testing, charting, analysis, in-depth market views, automation features, customized market scanning and more. Expensive! Financing is available.

OmniTrader
A 32-bit Windows based program designed to help traders quickly and easily find profitable trades. Provides a fully automated market analysis process and comes with 120 built in orders systems so traders don't have to write and test trading systems from scratch. Offers three editions: Stocks, Futures and Real Time. Prices range from $400-$2,000.

Speed Research (purports to be free but soon disabled unless you pay a fee to register)
Also known as StockWatch. A downloadable Web browser designed to expedite the stock research process. Allows you to build portfolios and link them to hundreds of stock research sites such as charting, message boards, price history, performance history, real-time quotes, profiles, news, financials, insider info and more. It contains dozens of other links including all major brokers, stock tips, rumors, movers, upgrades, downgrades, tips and stock screeners.

TC 2000
A stock screening software package & CD-ROM databank designed by Worden Brothers, Inc. Scans the entire NYSE, NASDAQ & AMEX for stocks that fit present criteria. Users can chart, analyze and organize results in an intuitive interface.

VectorVest
A stock analysis and graphics system that combines fundamental valuation with technical analysis. Features “Stock Viewer” with instantaneous analysis of Value, Safety, Timing, Price, Volume, Earnings, Growth Rates and many other critical parameters on over 6,500 stocks, 194 industry groups, and 50 business sectors. Provides Buy, Sell, Hold recommendations and Stop-Prices each day. Analyzes, sorts, screens and ranks all stocks, industry groups and business sectors in both weekly and daily modes.

Wealth Wizard
Program-trading software Day Traders, small trading houses, and investment managers. Monitors a trader’s portfolio in real time and executes trades automatically. Provides an extract file of trades, importable to popular tax programs, to help prepare in tax preparation.