Ask Colin

What do you think of TradeStation software and is it worth the cost compared to Insight Trader?

What do you think of TradeStation software and is it worth the cost compared to Insight Trader?

The two software packages - TradeStation and Insight Trader are not strictly comparable.

Insight Trader is a straight forward charting software package for the private investor and trader. It has an adequate range of indicators and charting abilities, that do everything I need and which I think all that most private investors and traders will need. It has some nice productivity tools and a reasonable testing module, though you cannot write your own indicators and test them. Its price is very reasonable.

TradeStation, on the other hand is the Rolls Royce of charting and testing software. I have seen it being used, but have not tested it myself. It has the general reputation of being the top-of-the-range product for the truly professional investor or trader or for the very sophisticated and dedicated private investor or trader. Its high price seems to reflect its quality.

TradeStation is also used and recommended by Dr Alexander Elder and I respect his opinion.

In deciding which to buy, I think you need to consider:

1. What indicators and charting tools you need to carry out your trading plan. Then check them off against the charting software available. Insight Trader has the most compact range of indicators. I think there are plenty there and adding more is just adding alternatives that seem to do the same job. However, some people want or need specific tools it might not have (e.g. the latest "flavour of the month" indicator is Average True Range, which Insight Trader does not have at present). MetaStock has a longer list of indicators and is cheaper than TradeStation.However, there are some things about MetaStock that I do not like or that I think are wrong. You may need to consider if these are important to what you need for your trading plan. I have discussed some of them in Ask Colin/software on my web site. The most serious for me is the incorrect point and figure charts it produces.

2. What productivity tools you need to carry out your trading plan. Some of the tools in Insight Trader, like the ability to filter the data base, are very fast and user friendly.

3. How much testing of trading systems you want to do. I understand that this is one of the real strengths of TradeStation. Unlike Insight Trader, TradeStation allows you to write and test your own indicators. This is not important to me, but may be in your approach.

4. How much trading capital you have. If you have small capital, TradeStation just does not make sense. You would be spending valuable capital on it. It may be doubtful that the extra benefits of using it will give you a sufficiently higher return to quickly give you a pay-back on your investment. After all, you have a choice of what to do with that amount - buy shares or buy TradeStation - you have to think about which is the better investment.Even if you think you would need the tools, it may not make sense financially. If you only have small capital, I would be inclined to learn the game and build your capital with Insight Trader and look forward to the day when buying TradeStation would make sense as an investment.