Short term trading is a type of trading that has a very short time horizon. A day trader is one type of short-term trader that is getting a good deal of attention in the news media these days. Day traders take a position in a market, and close out the position by the end of the day. When the trading day ends, they do not hold anything over to the next trading day. There are also short-term traders that keep their stock, options, futures, etc. for several days or more.
Today, with the increasingly fast electronic communications, day trading or short term trading can be done from offices in day trading firms, or if you have the software, PC and telephone, in your home or office.
Short term trading requires powerful software, timely market data, and a system with a fast response time. After a few days of trading, it will be apparent that you are competing with the pros and the pros have the expertise, the hardware and the high-end systems.
Software development tools from Investment Technology Labs can help you build high-end realtime trading systems so that you can compete with the professionals. All of our products are designed meet the intense, real time, dynamic requirements of day trader software systems.
The real time graph capability of Conceptual Charts provides the software developer and trader with an excellent trading tool. All of the visual and data components are objects and can be manipulated, changed, or moved dynamically, in real-time, while data is being received, analyzed, and displayed. Conceptual Charts has the following real-time capability:
The following example will show how Conceptual Charts can be used in your own custom software to trade the futures market in real time. Here is a scenario: you are following the price action of the SP500 futures contract in real-time, in a window. Your monitor is displaying the current prices of multiple stocks, options, and news in several windows. You suspect that there is going to be a good move in the market, but you don't know whether it will be up or down. Your attention is on the SP500 future window (above). A government report is coming out at 11:00AM, so far the
SP500 contract looks like it might be trending up. You decide to look at the US
Bonds future, since the bonds may lead the market. Also, you add a Stochastics indicator using SP500 data. The display pops on your screen. The bonds are trading in a tight range. It's 11:00AM, and still nothing. The SP500 future is up. Suddenly the bonds drop like a rock! You immediately sell several SP500 future contracts short, set a protective stop, and hold on for the ride! At about 1:05PM the bonds look like they will go back through the moving average, and the Stochastics %K has hit bottom and is turning up. You sell all of your SP500 contracts "at the market". Depending on your actual trading price, you would have made 10 to 15 points. Using $500 per point, that is $5000 to $7500 per contract. The chart at the end of the trading day is the above graph. The complex graph building is all done dynamically. Whether you make a selection from a list, combo box, or click a button, the required code to command Conceptual Charts to perform these actions is minimal. For example, it takes one line of code to add a graph (subgraph) and two lines to add an indicator and load it with data. Conceptual Charts does the rest.
Real-Time Examples
Example Graph #3
Real-Time Example Graph
#4
This next chart is a OLHC bar plot of the SP500 Index over an entire trading day. The bars have been converted from real-time tick data to 5 minute bars. The chart includes a point and figure plot to detect price resistance levels. The scaling of the y-axis is automatic. If desired, this plot can be easily configured to display a moving window of the last 30 minutes or any intraday period.
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