Round-up of trading technology for retail traders

As a result of researching trading software for a project I’m engaged in I’ve compiled a list. Most items on the list are for retail-traders and integrates with retail brokerages such as Interactive Brokers, TD Ameritrade etc. Each product has a short description to help me remember the product beyond name and company. I’ve tested some of them but far from all, so I keep the list as a reference and might add other products later.

1. MetaStock is a technical analysis software and charting software for end-of-day traders. It comes with numerious add-on as uses Reuters market data for prices.
2. IBCharts is a free chart and indicator package that works with Interactive Brokers.
3. Bracket Trader is a free API frontend with GUI to Interactive Brokers. It also support eSignal as datafeed.
4. eSignal is a realtime trading platform for advanced charting, backtesting and studies. It works with a range of retail brokerage houses.
5. Multicharts is a trading platform for multi-broker automated trading, charting and back-testing.
6. jWSData is a handy piece of software that creates and updates CSV with price data in real time from Interactive Brokers.
7. Salventrex offers a flashy product called DotTrader packed with unique and interesting features, such as Twitter, RSS etc. DOT trader offer dynamic views, charting of the market.
8. AnalyzerX have several Excel modules for traders for various purposes. DownloaderXL to download prices, BackTestingXL to perform backtesting.
9. StockVision offers desktop applications such as PowerScan(stock scanner), Market Replay (backtester), Midnight Review (backtester), and Goldenticket (pattern recognition).
10. StockChartX is a charting solution with many kind of charts; 3D Candlesticks, Renko, Kagi, Three Line Break, Point & Figure, Candlevolume, Equivolume, Shaded Equivolume, Heikin Ashi Candlesticks, Darvas Boxes. The company is called Modulus Financial Engineering and offer a plethora of financial applications mainly designed with Microsoft .NET.
11. RT Soft connect calculation software that connects Interactive Brokers and other data providers with MetaStock.
12. Wave 59 is a package of technical indicators, systems testing, order execution and pattern recognition.
13. Trinhof builds your very own price database from historical data from Interactive Brokers.
14. Vestra charts is a product for charts and order management with IB, MB Trading, and MetaTrader.
15. Trading Simulation help you to identify breakout trades with the product TSimBO.
16. SSCharts is a free charting package.                                                                                                 
17. Ensign software is a charting software package.

On digitial currencies: Ripple and TransferWise

Two tech start-ups that have caught my attention lately are Ripple and TransferWise. I’m fascinated by the development of the Bitcoin ecosystem and these two companies have found their unique way in leveraging the Bitcoin system and monetary transactions. With Bitcoin and digital currencies being a very hot topic these days I’m sure there are other smart entrepreneurs in this area of the tech world. Please comment and send links below to educate me and others.

Ripple “the world first open payment network” allow you to send money in Bitcoin, dollar, euros and yen almost for free. Their fee is as low as $0.0001/transaction and each transaction is confirmed in seconds according to their website. Now that sounds like strong competition to the fees charged by banks and services such as PayPal. The ripple payment system is still in beta testing stage and at the time of writing it’s possible to sign up for early access on their site www.ripple.com

Ripple is actually more than a payment network, it is also a digital currency called “ripples” or XRP. The currency can similar to Bitcoins be sent anonymously and instantly. Just as with Bitcoin there are no central authority such as a central bank. Also like Bitcoins which are limited to 21 million coins, there can only exist 100 billion ripples. As you can see there’s a lot of similarities between Ripple and Bitcoin.

So how much are these ripples worth? You can find out here: https://ripplecharts.com/market/XRP/USD:Bitstamp

Another interesting thing is that the OpenCoin Inc. the company behind the ripple network have recently attracted investments from Google Ventures, Andreesen Horowits, FF Angel IV, Lightspeed Venture Partners, Vast Ventures and the Bitcoin Opportunity Fund.

The next company is called TransferWise a UK start-up that have attracted investors such as Peter Thiel, IA Ventures, Seedcamp and TAG. While this is maybe not as rebellious as a crypto currency it does create a buzz. With TransferWise you can send money abroad. It sounds similar to PayPal, Western Union or Telegraphic transfers but with the promise of low fees and better exchange rates compared to your bank. The idea is to use a peer-2-peer model to transfer your money sometimes even without the need for a currency exchange. A transfer doesn't actually have to leave the sending country, the amount can be offset by another transaction handled by a transfer in the opposite direction.

Currently seven currencies are supported; EUR, USD, PLN, CHF, NOK, SEK, and DKK but I have the feeling that more will be added soon.

There seem to be no end to innovations that are taking fees from banks today. The slogan of TransferWise is “bye-bye banks. You’ve had your fun”.  The question is if traditional banks have reason to worry…

On another yet related note, Mt-Gox the Japanese Bitcoin currency exchange boasting the largest traded volume of Bitcoins will require users to verify themselves while making deposits/withdrawals. The Bitcoin protocol which prides itself in being anonymous to use will remain so. Its believed the exchange hopes to gain respectability after numerous attempted hacking attacks and the shutdown of Liberty Reserve. 

Endowments and foundations on both sides of the Atlantic

Top universities such as Harvard, Yale and Cambridge may be the home to the most brilliant students of the world, very few who apply gets accepted and even less succeed in their studies and graduate. The graduates often move on to start careers as entrepreneurs or with high-profile companies. Behind most of these universities is a namesake foundation which manages the assets of the university. Endowments and foundations, a similar organization started by a company or individual, often own assets worth several billions.

Endowments refer to the permanent pools of capital owned by institutions such as colleges, universities, hospitals, museums and religious institutions. The idea behind an endowment is to maintain its assets in perpetuity and at the same time provide a stream of income. They are often started with a gift and maintain the nominal value of the gift, the endowment corpus, over its life while generating investment returns. The returns are then used for projects of various kinds, for the benefit of the university and other causes in line with the endowment policy.

Europe	€  (billions)	US	$   (billions)
University of Cambridge	5	Harvard University	32
University of Oxford	4	Yale University	19
ETH Zurich	1	Princeton University	17
University of Copenhagen	1	Stanford University	16
University of Zurich	1	Massachusetts Institute of Technology	10

Source: statisticbrain and wikipedia

Foundations are similar to endowments in many ways, the differences will be described later.  The five biggest in Europe and US ranked by approximate asset values are listed here.

Europe	€   (billions)	US	$   (billions)
Stichting INGKA Foundation (NL)	28	Bill & Melinda Gates Foundation	35
Wellcome Trust (UK)	17	Ford Foundation	11
Garfield Weston Foundation (UK)	6	J. Paul Getty Trust	10
Knut and Alice Wallenberg Foundation (SE)	4	The Robert Wood Johnson Foundation	9
Robert Bosch Foundation (DE)	1	The William and Flora Hewlett Foundation	7

Source: Foundation Center May 2013 and websites of mentioned foundations

The structure and purpose of foundations are of different types. Perhaps the foundation type most similar to endowments is the Operating foundation, where the income generated by the foundation is used to permanently fund an organization or project. Community foundations are focused on a specific geographical area, where the residents of that area are the recipients of the charitable distributions. The donations can be either direct or through other organizations in for example health-care, education, arts and culture. A large and wealthy corporation may also be the sponsor of a foundation and then it is called a corporate foundation. A fourth structure, the independent foundation is sponsored by a wealthy family or individual.

While endowments have a perpetual lifespan, foundations may only last for a limited number of years. The reason for this lies in the spending requirements for each of the structures. Foundations have a minimum annual spending requirement of 5% of its assets while no such requirement exist for endowments. This makes it harder for a foundation to exist in perpetuity. A foundation of often only receives funding at the formation while an endowment may accepts gifts at any time. Both structures have the privilege of tax exemptions where people who donate gifts to the structure receive a tax deduction and where the income generated by the endowment or foundation is also exempted from taxes.

The value of a foundation or endowment is ever changing and affected by a great number of factors. Some of the best portfolio managers of the world work for these organizations and they have formulated ground breaking ideas in asset allocation, maybe most notably David Swensen and his strong focus on alternative investments. 

I hope to write more about both endowments and foundations in the future. They are big part of the investment landscape and they support many important project and causes in our world.