It’s fair to say that software can be programmed to do just about anything that relies on raw data as its primary consideration. This is especially true in the world of investing, where both qualifiers and quantifiers are expressed as dollars and cents, as well as percentages and absolute quantities of goods.
Getting With the Program
Investing software, by definition, is a program that allows its owner to establish specific parameters, not only for price, but for volume, volatility and other market variables. The program can then monitor stocks and bonds, even foreign currency and other investment vehicles traded in monetary terms, signaling activity that meets carefully selected criteria, which is then applied to the decision process to determine what to buy, when to buy it, and what percentage of holdings should be involved.
For example, if a certain stock falls in a given day to an identified level, and if volume is otherwise normal and there appears to be no other variables that have violated normal parameters, the software might signal that stock as a buying opportunity. With so many stocks out there, automating this monitoring and evaluation process greatly increases market visibility and trading efficiency.
A Confluence of Variables
Investing software can also monitor supply and demand pressures by looking at backlogged bids and offers, both in terms of price and volume. This, in combination with other variables, can help flag a security as either a buying or selling opportunity, and to an extent and with an immediacy that far exceeds the capabilities of human eyes.
The nature and scope of these investing programs varies widely. Lower-end versions are available for individual use, while some programs that require nearly a supercomputer level of processing power and memory are used by institutional investors and research houses.
In both cases, however, the final decision resides at the discretion of human eyes, which apply intuition and the level of current risk tolerance to the equation.
With investing, the more information the better, and the more powerful the tools, the better than information can by applied. This means the role of investing software will evolve over time and become an ever-more visible player in the investing equation, and at all levels of the trading universe.
