onlinefinancialtrading.com

The Best Stock Trading Tools For You

Stock trading tools have exploded in number and in their capabilities since the early 1990s, so what exactly are they, and which are the best ones for you?

1. Trading platforms and other stockbroker services

These have evolved the most quickly and to the greatest extent since we were still stuck with the telephone in the 1990s and before. Now with the latest software programs you can do all your trading with just a few mouse clicks, and it’s almost (though not quite, of course) foolproof, e.g. different colors for buying and selling prices.

The other main stockbroker service is up to the minute news and news feeders from leading financial news sites such as CNN and Bloomberg. This is essential unless you are a strict technical analyst taking no notice of news or other events that may influence future price movements.

2. Charts and indicators

These have evolved beyond all recognition as well. Most brokers, and many web sites not linked directly to any individual broker, have charting services available, which invariably include a host of indicators that are customisable to your requirements or those of your trading system.

Now charts are available on any stock, index, commodity, bond or currency traded on any financial market, and in most cases they can go back for ten years or more. In seconds you can load your own simple moving average settings or any other indicator or combination of indicators onto them.

3. Online educational resources

Most stock brokers have their own customised training available to their customers. It’s unwise to rely too much on any such package but nonetheless it is often possible to learn a great deal from these resources. You have available online video, DVD video as well as audio and the more basic ebooks, none of which was available to any degree before about 2003. Nonetheless, ultimately it’s far better to rely on your own mentor, rather than a broker.

One most important and significant development is that of the “demo account”. This is a major breakthrough and valuable asset of any trader. With it you can test strategies and techniques in real time to see if they really work, without risking real money. There’s a temptation to trade recklessly precisely because it’s not real money, but you should always to treat it as real money if you really want to learn and to have reliable results, whether good or bad.

4. Trading robots

These are the latest tools to arrive on the financial trading scene. Pioneered in the forex market, they are beginning to establish themselves as mainstream stock trade software. In theory, you set your parameters, e.g. how much of your capital to risk on any one trade, stop loss levels, and load your chosen indicators or “expert advisors”, and the robot will open and close your trades for you, taking away the human emotional element that so often leads to failure and losses.

At the present time they don’t seem to be able to take into account the fact that market prices are influenced by humans, with all our emotional baggage. But there’s nothing to say they can’t evolve and improve. In the meantime, if you’re tempted to buy one, test it out thoroughly with a demo account before risking real money with it. And in any event they don’t compare to having a skilled and experienced mentor to learn (and even copy trades) from.

Philip Gegan