We’re pretty lucky as home-based traders.
Almost all the tools we need are free.
But, there are small investments you can make in certain ‘performance-enhancing tools’ that can really pay-off.
The trick is to know where the point of diminishing returns lies before you decide to spend your money.
That means asking yourself:
– Am I clear on the benefit this tool/software/widget will give me before I spend my money?
And more importantly:
– Is the benefit worth the money?
Here’s an example on a grand scale…
Imagine how much it cost a company called Spread Networks to lay a secret fibre optic cable in the straightest line possible between trading exchanges in New York and Chicago.
Could there really be a benefit to going to all that trouble when perfectly good fibre optic lines were already in place?
The cable run stretched to 825 miles and tunneled through mountains, under rivers, beneath city streets, and whatever else stood in the way.
And when it was completed data sent down this line shaved 3 milliseconds off the time it took for a trade to reach the exchanges.
That’s right, a whole 3 milliseconds!!
Now that doesn’t sound like a lot but in the world of high-frequency trading it’s an age.
And the incredibly high investment cost – estimated at $300 million – would undoubtedly be classed as a bargain for the big banks and hedge funds that use this service.
Obviously a project like that is beyond the realms of fantasy for us home based traders. But where might you invest some of your hard-won funds to gain an edge?
Are there any trading tools you can buy, quickly put to work, and see a definite benefit from?
This follows a number of email conversations I’ve had recently.
I’ve been recommending my favourite premium charting tool to those who’ve been asking. And I thought I’d share it with you here along with another two tools you might find useful.
Now, like I said, you only want to pay for tools if they benefit your own particular approach to the market.
So again, just to be clear, you may not NEED any of them.
But they all offer free trial periods so it’s well worth giving them a try, just so you can keep abreast of what’s out there.
Here’s an overview of the three tools:
Three performance enhancing tools for traders
- eSignal:Flat out the best data and charting platform available. This is professional-level stuff. The quality of their data is unsurpassed. Their Forex feed is made up of over 200 contributors and you can also filter out individual broker’s feeds. This is the truest picture of the forex market you can get. You’ll also have access to professional level analysis tools for an uncommon insight into market behaviour, these are things the average broker just will not offer you on their free platforms. Esignal is a good fit for higher-volume traders.
- Ninjatrader:This is a great tool that makes entering and managing trades a doddle. If you work on the shorter timeframes you’ll wonder how you ever managed without it. You can drag and drop your orders up a ‘ladder’ of pricing. It’s a very visual way of monitoring your trades. It’s easy, accurate, fast and also lets you set up automated trade management so it all runs hands-off. Great for short term traders or scalpers.
- Forextester:This is your risk-free training ground. Test your trading skills in a real-world accelerated environment. You get 10 years worth of tick-by-tick data so you can go back to whatever point in time you like, hit play, and trade the actual movements the market made in real time. Don’t worry, you have total control over the playback speed too! You can test a year’s worth of trading with your new strategy idea in a hour or so.
So have a look and see what you think.
You may stumble upon something life-changing, or your investigations might simply reinforce how the free Metatrader platform already offers everything that you need!