Day Trading Software: The Good the Bad and the Ugly

Day Trading Software: The Good, The Bad and The UglyInstead of just writing a lengthy color commentary on day trading software, let's apply some clear parameters up front of what we mean by the good, the bad and the ugly:

  • Good -these are the few gems within day trading software that will make you make money.
  • Bad - these are bloated/wasteful items within trading platforms that increase your costs (fees, licenses, etc.) or are just a waste of time
  • Ugly - these are things which make you lose money trading

Table of Contents

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The Ugly

So, let's go in reverse order and first cover the ugly side of day trading software. The one good thing about the "ugly" side of trading platforms is the ugly is so blatantly obvious, you will know within 30 seconds to run for the hills.


Have you ever used software that is simply slow?  Slow in the sense that you are watching a stock breakout on a 5-minute chart, you go to enter your order and the screen locks up on you.  By the time you gain access to your machine it's been over 2 minutes and the stock is well beyond your entry point?

Or what about the other example where you are watching a winning trade like a hawk with a clear exit position.  As the stock approaches that target it has a burst of activity.  Your software begins to scream with alerts and sirens as your trend lines are crossed and the stock makes new highs on the daily chart, but all of this activity locks up your machine.  After the tape starts to slow down and your chart finally updates with real-time data after being hijacked, you see that your stock has now retreated from loftier levels and while you can still claim a profit it is fair less than what you had 2 minutes ago.

Horrible Fills

After you have tried your hand at day trading for some time you will undoubtedly realize market orders are your enemy.  Depending on your system a few ticks in the right direction over the course of a month could be the difference between up marginally and size able gains.  So, you switch over to limit orders to give more structure and clearly defined entry and exit points for your trading.  If your software is "ugly" after placing your limit order you will notice the price action will simply slice through your order without a fill.   You have one of two choices at this point: (1) watch the trade take off and you are not on the bus or (2) chase it with a market order and run the risk of a horrible fill.

The Bad

Your day trading software should make you a better trader at the end of the day.  You should feel on some level that if you keep practicing and stay focused over time you will make money in the market.  Well, what if your trading software actually prevents you from accomplishing your goal.

Expensive Add-On Indicators

It's no secret that I am not a fan of these Holy Grail indicators.  These "magic bullets" strip away our responsibility and ownership over or trading decisions.  You will see some platforms offer the standard 15 or so indicators, only to up sell you on some supercharged indicator that will completely change your life.  By the way this indicator is going to cost you a few hundred dollars a month to gain access, but no big deal.  So, instead of learning and improving your trading profits, your trading business has now just increased its operating costs for unproven indicators/tools.

Too Many Bells and Whistles

The more bells and whistles a platform has the greater the odds you are going to try to use them all.  Instead of focusing on the one or two things that will make you profitable, you spend all day and night trying every single offering from the platform. You end up with a screen full of indicators, CNBC running in the background and a direct feed from StockTwits.  The information overload causes you to go into analysis paralysis mode unable to put on any trades.

The Good

Let's be very clear, your day trading software should make you money.  You should look at your trading software as if it's your wing man in the trading world, effortlessly allowing you to go from winning trade to winning trade.  Below is a list of 4 "good things" you should look for in your day trading software:

  1. Trading Simulator - your platform should allow you to trade using real-historical tick data with time and sales.  Like anything in life, if you plan on taking it to the next level you need to practice
  2. Lighting Fast - it's not good enough that your software is pretty fast. You should feel that your software is able to handle the load of an Apple or Facebook streaming thousands of trades per minute without skipping a beat.
  3. Fills - not only should your software fill your orders, but on average your fill price should be better than your order price.  It's like reaching into your pants pocket and finding that unexpected $20 dollar bill.
  4. Education- the learning aspect of trading is overlooked far too often by brokerage firms and trading software companies.  It's like placing a 16 year-old behind the wheel of an Indy car and expecting him to compete on the same level as Mario Andretti. Your day trading software should provide you with the articles and videos that can help you learn all there is to know about trading so you can determine which strategy best fits your risk profile.


Al Hill Administrator
Co-Founder Tradingsim
Al Hill is one of the co-founders of Tradingsim. He has over 18 years of day trading experience in both the U.S. and Nikkei markets. On a daily basis Al applies his deep skills in systems integration and design strategy to develop features to help retail traders become profitable. When Al is not working on Tradingsim, he can be found spending time with family and friends.
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