 | This article relies largely or entirely on a single source .(February 2014) |
Fundamental analysis software automates analysis that supports fundamental analysts in their review of a company's financial statements and valuation.
| | This article relies largely or entirely on a single source .(February 2014) |
Fundamental analysis software automates analysis that supports fundamental analysts in their review of a company's financial statements and valuation.
The following are the most common features of fundamental analysis applications.
Enables traders to test fundamental analysis strategies or algorithms to see what kind of return they would have achieved if they had invested based on that strategy or algorithm in the past. Backtest results will typically display total and annualized returns compared to a benchmark such as the S&P 500. In addition to returns, backtest results will also display volatility statistics such as average beta or maximum drawdown.
Stock scanning, or screening, is the most common feature of fundamental analysis software. Scanners enable users to 'scan' the market, be it stocks, options, currencies etc., to identify investment opportunities that meet a user's specific investment criteria. Using a fundamental analysis scanner, a user could, for example, scan the market to identify stocks with below industry average PE Ratios and above industry average sales growth.
Alerts are a common feature of fundamental analysis software. Alerts will typically notify the investor to buy or sell a stock, or notify an investor when a stock enters or exits his/her saved strategy. When alert conditions are met, a notification is typically communicated via an on screen pop up or sent as an email.
Fundamental analysis software is typically used with end of day (EOD), delayed or real time data feeds. EOD data feeds provide the end of day close, open, high, and low price for the given equity and is typically updated once a day at market close. Delayed data is typically delayed 15 to 30 minutes depending on the exchange and is the most commonly used data feed type. Real time data feeds provide tick by tick 'real time' data.
Most fundamental analysis software includes built in strategies that have been validated with backtesting to give positive returns on average. Some examples of built in strategies include: Stock Investor Pro's IBD Stable 70 or Equities Lab's Dividend Champions. Users will typically find a built in strategy that aligns with their interests and investment style then follow the strategy to keep up with stocks that pass the strategy.
Some fundamental analysis software can be integrated with brokerage platforms to enable traders to place trades, or to update the users portfolio with what is actually held in the brokerage account.
In finance, technical analysis is an analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis use many of the same tools of technical analysis, which, being an aspect of active management, stands in contradiction to much of modern portfolio theory. The efficacy of both technical and fundamental analysis is disputed by the efficient-market hypothesis, which states that stock market prices are essentially unpredictable, and research on whether technical analysis offers any benefit has produced mixed results.
Day trading is a form of speculation in securities in which a trader buys and sells a financial instrument within the same trading day, so that all positions are closed before the market closes for the trading day to avoid unmanageable risks and negative price gaps between one day's close and the next day's price at the open. Traders who trade in this capacity are generally classified as speculators. Day trading contrasts with the long-term trades underlying buy-and-hold and value investing strategies. It is made easier using day trading software.
TradeStation Group, Inc. is the parent company of online securities and futures brokerage firms and trading technology companies. It is headquartered in Plantation, Florida, and has offices in New York; Chicago; Richardson, Texas; London; Sydney; and Costa Rica. TradeStation is best known for the technical analysis software and electronic trading platform it provides to the active trader and certain institutional trader markets. TradeStation Group was a Nasdaq GS-listed company from 1997 to 2011, until acquired by Monex Group, a Tokyo Stock Exchange listed parent company of one of Japan's leading online securities brokerage firms.
Value investing is an investment paradigm that involves buying securities that appear underpriced by some form of fundamental analysis. The various forms of value investing derive from the investment philosophy first taught by Benjamin Graham and David Dodd at Columbia Business School in 1928, and subsequently developed in their 1934 text Security Analysis.
Market timing is the strategy of making buying or selling decisions of financial assets by attempting to predict future market price movements. The prediction may be based on an outlook of market or economic conditions resulting from technical or fundamental analysis. This is an investment strategy based on the outlook for an aggregate market rather than for a particular financial asset.
Algorithmic trading is a method of executing orders using automated pre-programmed trading instructions accounting for variables such as time, price, and volume. This type of trading attempts to leverage the speed and computational resources of computers relative to human traders. In the twenty-first century, algorithmic trading has been gaining traction with both retail and institutional traders. It is widely used by investment banks, pension funds, mutual funds, and hedge funds that may need to spread out the execution of a larger order or perform trades too fast for human traders to react to. A study in 2019 showed that around 92% of trading in the Forex market was performed by trading algorithms rather than humans.
In finance, market data is price and other related data for a financial instrument reported by a trading venue such as a stock exchange. Market data allows traders and investors to know the latest price and see historical trends for instruments such as equities, fixed-income products, derivatives, and currencies.
A stock trader or equity trader or share trader is a person or company involved in trading equity securities and attempting to profit from the purchase and sale of those securities. Stock traders may be an investor, agent, hedger, arbitrageur, speculator, or stockbroker. Such equity trading in large publicly traded companies may be through a stock exchange. Stock shares in smaller public companies may be bought and sold in over-the-counter (OTC) markets or in some instances in equity crowdfunding platforms.
In finance, a trading strategy is a fixed plan that is designed to achieve a profitable return by going long or short in markets. The main reasons that a properly researched trading strategy helps are its verifiability, quantifiability, consistency, and objectivity.
A stock market simulator is computer software that reproduces behavior and features of a stock market, so that a user may practice trading stocks without financial risk. Paper trading, sometimes also called "virtual stock trading", is a simulated trading process in which would-be investors can practice investing without committing money.
Stock market prediction is the act of trying to determine the future value of a company stock or other financial instrument traded on an exchange. The successful prediction of a stock's future price could yield significant profit. The efficient-market hypothesis suggests that stock prices reflect all currently available information and any price changes that are not based on newly revealed information thus are inherently unpredictable. Others disagree and those with this viewpoint possess myriad methods and technologies which purportedly allow them to gain future price information.
Day trading software is computer software intended to facilitate day trading of stocks or other financial instruments.
An automated trading system (ATS), a subset of algorithmic trading, uses a computer program to create buy and sell orders and automatically submits the orders to a market center or exchange. The computer program will automatically generate orders based on predefined set of rules using a trading strategy which is based on technical analysis, advanced statistical and mathematical computations or input from other electronic sources.
GStock was a distributed computing project formed in 2006 for stock market analysis. It was enabled by users that volunteered to download and run a software client and donate some idle capacity of their computer processing unit (CPU). The gathered computing power was used to search for an investment strategy that historically worked best for each individual stock. GStock scanned over 1 billion investments strategies on over 4,000 US publicly traded stocks.
MultiCharts is a Windows-based application which is designed, sold and distributed by MultiCharts, LLC. The company is based in Columbus, Ohio, in the United States. MultiCharts is an electronic trading platform and technical analysis software for analyzing the financial markets and performing trade execution. It uses a proprietary programming language called PowerLanguage.
An electronic trading platform is a piece of computer software that allows users to place orders for financial products over a network with a financial intermediary. These products include products such as stocks, bonds, currencies, commodities, and derivatives. The first widespread electronic trading platform was Nasdaq, an American stock exchange. The availability of such trading platforms to the public has encouraged a surge in retail investing.
In finance, a stock index, or stock market index, is an index that measures a stock market, or a subset of the stock market, that helps investors compare current stock price levels with past prices to calculate market performance.
A financial data vendor provides market data to financial firms, traders, and investors. The data distributed is collected from sources such as stock exchange feeds, brokers and dealer desks or regulatory filings.
Wealth Lab is a technical analysis software as well as an electronic trading platform owned by Fidelity Investments. It was created by Dion Kurczek, who founded the original Wealth-Lab, Inc. corporation in 2000. Fidelity acquired the Wealth-Lab software assets in 2004. The client runs on Microsoft Windows .NET Framework v4.0 and requires internet access to function properly. Licensed users can program and backtest trading strategies for stocks and futures. Fidelity premium account holders can use the platform to place trades produced by their trading strategies directly to their brokerage accounts and even setup auto-trading systems.
Markets.com, is a global trading and investing brand owned by Finalto Group, the financials division of FTSE 250 listed Playtech. Market.com is an electronic trading platform for trading on the foreign exchange market, commodity market, cryptocurrency market, stock market, ETFs and bonds through Contracts for Difference (CFDs) and in the UK & Ireland, Spread Bets. It is also an investment services provider offering physical share dealing and a quantitative investment strategy builder. Playtech is listed on the London Stock Exchange under ticker PTEC.