Is there any charting software that you recommend? Metastock, eSignal, ShareScope?

There are several charting packages available nowadays and really trading data (price, volume and other relevant details) are necessary if you want to keep track of your trading. Having said that long gone are the days when technical analysis meant hours of chart drawing. These would include ADVFN, Equis Metastock, eSignal and ShareScope. But if I were you, I would forget about Metastock and eSignal Market Scanner until you have mastered Sharescope. Metastock is good if you want to write your own programs and back test them but if you are a new trader I would stick with the basics. Imo Sharescope has everything any of us need to make profits. If you can’t cut it with Sharescope buying more expensive software won’t help. There‚Äôs also Sharelock but this no technical stuff other than relative strength. It also has no Index listings so forget it for short time frame trading.

You need to be able to keep track of price movements and trading volumes on the markets you spread trade. There are several sources that provide daily closing prices, but you also need historical data as well as current information. For myself I wouldn’t do without Sharescope (an offline charting package, with brief (one minute) online updates each evening). I’ve used it for a number of years, and haven’t bought or needed any other trading/investment software. I am quite a fan of ShareScope. For UK shares, you have all the data you could ever want plus news searching. ShareScope has come a long way yet its entry-level pricings still one of the best buys out there and with the recent addition of its Sharescript programming language (on Plus and Pro versions), it is a powerful tool with the capability to do some serious bespoke modelling. Their Pro subscription certainly ticks most of the boxes for me but the glaring hole is no Plus market trades nor on Level 2. Since I tend to focus on smaller cap and AIM stocks I’d really like to see those. The Sharescope Gold option is good for historical charts and technical analysis (no intraday/ real time) and is good value for that.

One other thing, do not pay for eSignal immediately on starting out, use StockVision instead (http://www.garsworld.com/), it has no monthly fees and the pre-programmed filters very helpful. The guy that made StockVision is an absolute saint and deserves your money, a real credit to the trading scene. On the other hand Sharelock has no technical stuff other than relative strength. It also has no Index listings so forget it for short time frame trading.

ADVFN is quite good but doesn’t keep any of your lines and markings on the charts, and the company data is unreliable. So okay for a small number of positions, and Level 2 is the best on the market for the private mush (me included).

I’ve also found IG Index’s advanced charts to be very useful and I now get them for next-to-nothing, as I meet the minimum trade criteria. IG’s advanced ProRealTime charts is a great service if you want real time charts – all depends what you are doing – some folks don’t even need Level 2 if they’re just making a few trades for longer term. The ProRealTime software are part of IG’s advanced charts and as long as you do 2 trades per month you won’t be charged anything to access them. Loads of features – probably way too many. In particular the ProRealTime software is useful as a backtesting tool but of course you don’t get any of the fundamental stuff like you do with Sharescope.

Having said that IG Index and Sharescope are not directly comparable. IG Index provides advanced charts that are primarily a trading tool whereas Sharescope on the other hand is more like a stock picking and trading tool. I’d say the data mining on Sharescope is excellent, and this coupled with the fact that all the data is on the machine rather than on a web site server makes flicking through charts a real doddle.

Sharescope comes with all the standard technical indicators and has powerful drawing tools. Thankfully it remembers what you have previously drawn, and it can be made to sort and sift through user-defined groups of stocks to find such things as moving average crossovers and volume spikes. It allows you to quickly scan through lots of different charts so for instance you could scan through the charts of each individual stock in the FTSE 350 or any other index or user-created list in a matter of minutes. It just takes one click to go from one chart to the next with each being configured how you want it. I think the ability to draw on charts, park them and then come back and pick them up later on is vital to being able to make progress.

I would guess I use less than a quarter of Sharescope facilities (it’s far to customizable for its own good!), but the facilities that I do indeed use, I keep using every day. My only lament on Sharescope is the lack of back testing facilities – they spend a lot of effort on data mining which is is really relatively useless unless you can validate the strategy. It’s all very well saying I want a buy signal with say MACD and RSI but what use is it if you don’t have statistics to show you its win: lose ratio or where the ultimate stop loss position would be? Likewise I could run MACD with RSI on a tipster’s qualifying stocks only but without back testing how do I tell if its any better than any random selection of stocks. We need a tool that tells us if I buy the top ten stocks selected on a particular criteria and sell at a defined exit with a defined stop my annual return would average X% based on the past ten years worth of data. Currently to try and test on Sharescope data is not even manually viable.

eSignal on the other hand utilised data streamed from the internet and is more suitable for full-time traders (in fact in some ways it is not suited to an end-of-day investor) and can be programmed for bespoke studies by the user if required. eSignal Premier is mainly aimed at intraday trading, most likely by traders focused on futures or currency trading, although it has also has comprehensive stock coverage and can be used to produce daily charts. Mind you it doesn’t come cheap starting at some $120 per month. eSignal does offer delayed data for much reduced rates (I think the eSignal OnDemand product at $37.95 per month), so you can try out your ideas before starting the meter.

Another useful website is http://www.investorease.com/ which is particularly useful for researching and trading UK equities including the ones listed on Aim. InvestorEase also provides data on directors dealings as well as information on mergers and acquisition activity, including the largest risers and fallers in main indices, and dates for results and annual general meetings.

Note: Daily end of day charts are provided for free at services like Prorealtime and ADVFN. However, beware that most spread betting providers offer charts whose prices are based on their own bid as opposed to the underlying.

P.S.: Sharescope is not something you can get into quickly…if you know a bit of technical analysis, then good but if not I would advise a book or two before Sharescope. The first time I used it I gave up and eventually I ventured back to it a few years after and I must say I love it. It is so damn powerful and so bloody customizable.