Technological temptations

Chris Walker investigates trading support packages and whether they’re worth paying for

Chris Walker

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SHARE-TRADING SOFTWARE programs I found by surfing the internet are by no means the only ones available. But they give you an idea of what’s on offer and what you can expect to get and pay.

If you want to believe their marketing guff, they’re all better than anything else on the market, and each is capable of turning you into a prosperous, share-investing whizz.

I am reminded of the hackneyed line, “If it’s too good to be true, it usually is”. But for some of these software packages, if you’re prepared to put the work into understanding all the features and how they can make you money and you take the exercise seriously and sensibly, I think there’s a decent chance you will like them.

The priciest share software packages I came across are offered by Share Wealth Systems. Its very enticing claim is that, by rigorously using its SPA3 program, an investor could have achieved an average 17.36%pa return from their share portfolio between 2001 and 2012, compared with a return of 6.65%pa from the All Ordinaries Accumulation Index.

Devised by a team including some seriously low-handicap golfers (it’s all there on the website – and, as an envious golf hacker, I took particular note), the prices of Share Wealth Systems’ four market trading packages range from $550 to $3990 and two attract extra fees of $71.50 a month, covering data feed, desk support and product training.

Perth-based Pro Trader offers market-scanning software that, it says, uses pattern recognition as well as computer indicators to find trading opportunities, employing unique methods, it claims. The full Pro Trader service, which includes stock recommendations, education, support, advice, software and data feed, costs $2450 for the first year. If you want the software only, it’s $898 plus data feed costs; for ASX data feed it is an additional $356 a year ($1254 total).

Beyond Charts offers a free charting software program (called Beyond Charts), as well as an enhanced version of that software called Beyond Charts+ which costs $595. Both need to be complemented by a data feed, costing $478 a year, that covers the Australian or US sharemarkets, or $178 a year for an ASX derivatives or futures data feed.

The Beyond Charts website says: “Data is the most important component of any charting package. Don’t let anyone tell you otherwise.” It’s a reasonable claim. You can trial the software for 21 days with no charge.

If you find these costs a bit off-putting, take heart from the fact that online sharebrokers including CommSec, E*Trade, Bell Direct and CMC Markets all provide free software as part of signing up as a customer. These packages compile all your stocks in the one place, enable you to trade instantly whenever markets are open, give you current and historical market information and provide a decent range of charting tools.

For a fee ranging from about $40 to $85 a month they will also provide you with live market data. However, if you are a regular trader, racking up brokerage from around $220 to $330 a month, the market data feed is also likely to be free.

So, what’s the bottom line? If you occasionally buy and sell shares, buying expensive software is probably overkill, like using a bulldozer to weed your garden. If you want to get into it, try one of the platforms that offer a free trial, and determine whether you can use it easily enough; and if it is likely to help you identify winning stocks and when to buy and sell them.

If you find software that helps you trade more profitably, thanks to the quality of its data feeds, analytical tools or software smarts, it’s arguably worth the price.

If you’re just trading every now and again, the free trading platforms that come with being a client of CommSec (as I am) or similar brokers probably have more than enough inbuilt features to keep most share investors happy, while also providing access to more sophisticated trading options, if you want them, for a modest fee.

Chris Walker has contributed to Money since 1999. He has co-written books with Paul Clitheroe, including Making Money, the best-selling finance book in Australia.

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