“Special FX” Charts – What Are the Best FX Charting Software Packages?

For almost every trader, charting software is a key component to doing business. Forex traders are no exception. Without a good chart, it is impossible for most of us to get our arms around the market’s big picture when determining our next move. So for the forex trader, what is the best charting software?

As with so many pieces of the trading puzzle, there isn’t a single clear answer. Each of us will have different criteria by which we determine the charting software that best serves our FX trading business. However, without a clear idea of what those criteria are we stand a good chance of choosing a product poorly. The following is a strong set of questions I have found it useful to ask when determining which charts to use in my trading:

  1. Which forex broker do you trade with? This might be the single biggest component when determining your charting software. Every brokerage offers charting software (at least, I’ve yet to run into a broker which doesn’t), and some of the software is really quite good. If the broker you are trading with offers a charting package you find unacceptable, you have two primary paths of recourse. You can change brokers (not a big deal, but it is a bit of a hassle), or you can use 3rd party software to chart and continue trading through your current broker.
  2. Do you want to ‘trade on the chart’? Personally, I’ve never found this compelling. Sure, it is convenient to simply click a spot on the chart and enter an order to trigger there, but for precision order entry (which my own trading plan requires) is more of a hassle for me than just typing in an entry through my broker’s standard trading window. But if you are comfortable with a simple point/click/trade functionality and an order entry that is ‘close enough’ really is close enough, this could be a useful feature. Particularly if you trade in an environment which demands lightning quick action, this ability could be a deciding factor.
  3. Price. Obviously, paying a monthly fee for your charting software represents an additional cost of doing business. Some of these premium (meaning ‘not free’) programs are quite good, but usually the only improvement over a free charting package you’ll see is the addition of a few additional technical indicators. Unless your trading system absolutely depends on such a special indicator (or the capacity to program your own indicators, as with Tradestation or eSignal), this additional expense is probably unnecessary.
  4. Trade automation. Prior to the advent of Metatrader and it’s Expert Advisors there were only a small handful of charting software which provided trade automation. One of my favorites (and still is) is VT Trader. The charting software is very good, and activating a simple trading system is not complicated. If you are comfortable (and that is a big ‘if’) walking away from your computer while it trades your money behind your back, either VT Trader or Metatrader can provide good options. (But please, PLEASE let any system you implement paper trade for a while prior to using it real time).

So we can see that one size does not necessarily fit all FX traders when it comes to charting. But here are three packages that I use regularly:

  1. PowerCharts – you can find this software at http://www.dailyFX.com (click their ‘charts’ tab, to find multiple FX charting packages, both free and premium).
  2. FXCM – this is one of my brokers, and the charting package is fine. I have the option to trade on the chart, though I rarely exercise that option.
  3. VT Trader – this is the beefiest of the forex charting packages I regularly use. It has a nice set of indicators (unavailable in the other two I use), as well as the ability to program very simple trading systems.

Don’t take any of these as particular endorsements. There are quite a few FX charting packages out there; you owe it to your own trading business to see what will work best for you, but when you keep these criteria in mind you will certainly find the one which is right for you.

Stay timid!

Timothy