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Online Stock Trading Software – How To Use It For Maximum Profits

Online stock trading software – it had to come, and it’s well and truly arrived now. You can even get “robots” that do all your trading for you – at least, that’s what it says on the box. But, whichever one you select to help you make trades, how exactly do you use it, and how much can you rely on it? Can you stop having to keep abreast of news and developments in the market?

Before we get into that, let’s check our priorities. And number one there must be to select one that is right for you. As someone seeking to be a successful financial trader, or investor, you should select one that gives you the information you need, without burdening you with masses of data that you’ll never get through. So, should it be one that is a “robot” or makes recommendations, or a simpler one that merely provides raw data, charts  and a few indicators?

I believe a simple program that nevertheless covers a large range of financial markets and instruments is ideal. Whether it comes from your broker or not isn’t so important, though probably a program independent of your broker is preferable. “Robots” and other programs that “suggest” trades are too unreliable for the serious trader. They are for games, not for putting your real, hard-earned money on the line.

The key point is this. All the successful financial traders use online stock trading software strictly as a supplemental aid to making trading decisions. Their actual trades reflect the information they obtain, not from this software, but from simply keeping abreast of developments and news in the particular market or markets that they specialise in.

And this is what I suggest you do as well. Copy the successful traders, and specialise in just a few markets. Get to know the company and its stock before you put money down on its expected price movements. Get to know the commodity, if you’re in commodities, and any production problems, what the likely demand is likely to be in a few months’ time, and so on. If you prefer international currency trading, study the currency pairings you plan to specialise in, get to know the state of the economy of both countries concerned, their prospects, their problems, and the way they intend to deal with them.

You can easily obtain this information from newspapers and magazines, and on the internet, from specialist web sites and forums. Once you start doing that, the charts and indicators you study relating to the same market will start to make sense. The wise beginner will resist the temptation to trade with real money at this stage, but will use a demo account or simply trade on paper until he is confident he has mastered that market and can predict what is most likely to happen.

Too many people trading for the first time make the mistake of thinking the software program they use can give them all the information they need to make profitable trades. Probably it can’t. There’s something else, and it’s not just research of the market that I mentioned above. But it is something your financial trading mentor can tell you.

You’ll find a strong clue in your free copy of my mp3 interview with Vince Stanzione, Secrets of Successful Trading. Get yours from OnlineFinancialTrading now.

Philip Gegan

Stock Trading Charts – 5 Secrets to Profiting from them

Stock trading charts are used all the time by traders, but few know how to get the most out of them. Here are five tips on how to use them properly.

1. Don’t skip on research – use charts for confirmation only

Few traders can look at a chart and tell what’s going to happen next. The rest of us have to work at it. And often the price of a stock can take off in either direction at any time, regardless of recent history.

Using a chart without researching the stock you’re considering is dangerous. Even traders who use charts extensively have their ear to the ground to keep informed of developments affecting the price of stocks they have a stake in. Learn everything you can about the stock you’re interested in trading.

Research the company, what it produces, what its main markets are, what problems it is facing, and what projects it has in the pipeline. This isn’t too difficult as most of this can be found online. Once you’ve discovered stock that is under or over valued then consult the chart.

2. Interpreting chart patterns

If you see a pattern make sure it isn’t just in your imagination. Don’t try and see any that aren’t there. If there is one it should jump off the page at you. The main pattern to look for is a trend – higher lows or lower highs. If you can find just one or two established trends each week that you profit from then you’ll do well.

Other patterns include the “head and shoulders”, the “double top” and the “double bottom”. If you see either of the first two on a recent chart then there’s a strong probability that the current movement is generally downwards. The “double bottom” indicates that the price has probably reached as low as it’s likely to go prior to moving up again.

3. Establishing resistance and support levels

These are imaginary lines on stock trading charts indicating where the price cannot seem to rise any higher or fall any further. They aren’t necessarily horizontal – sometimes they can be shown to slant up or down. If the price is moving rapidly towards such a line it will probably breach it and move into a new trading range. Often the line breached becomes the opposite of what it was, i.e. resistance becomes the new support, or support becomes the new resistance.

If the price is moving slowly towards such a line it’s a sign that the price will probably not move much further in that direction and is more likely to reverse.

4. Deciding on your stop loss and profit taking levels

This is where a chart really is essential. If your stock market graph shows a clear trading range outside of which the price rarely goes, then you can set your stop loss and profit taking levels with confidence. This works with medium to long term trading only, where you have sufficient capital to afford sufficient stop loss levels. It can’t be relied on in day trading, where stop loss margins are necessarily narrow and quick profits are sought.

5. Accept your charts’ limitations

If you accept that charts don’t provide a fail-safe way to see into the future, but are simply an aid to making trading decisions, then you will avoid making many of the mistakes that unsuccessful traders make. Those mistakes are usually caused by greed and fear, the two primary factors fuelling price movements in the stock market.

In short, stock trading charts are a priceless asset to any successful financial trader provided you know how to use them and don’t substitute them for doing your homework.

Get started with your financial trading career now. Just go to our home page and complete the form for your free mp3 interview with Vince Stanzione, Secrets of Successful Trading.

Philip Gegan

How To Use A Stock Market Graph System

You can easily learn how to use a stock market graph to determine in which direction a particular financial market is likely to move. But if you seek regular, profitable trades (and who doesn’t?) it’s quite evident that graphs alone are not enough.

We know that higher highs and higher lows mean a bull market. But how do we know from the chart that the trend will continue? We can calculate the resistance level, but these can be and often are broken. What if it has already been breached and the chart shows no sign of the upward movement ending?

Are you going to invest your money on the basis that the bull market will continue? Or stand by and risk missing out on easy profits? Perhaps you’re a swing trader and decide to go short. At this point you’re probably going to turn to fundamentals (unless you are a die-hard technical analyst) for further guidance.

So what I’m saying is that there’s a problem with using charts and graphs alone, even allowing for all the indicators that go with them. Because what ought to happen seldom actually happens, or at best happens but at a different time from that indicated by your graph.

However, provided you use your charts and graphs strictly to supplement other stock market trading systems that are based on market information, or fundamental analysis, then your chances of success in any given trade increase dramatically.

Take the commodities market. If you know that production of aluminium, for example, has recently been reduced, and you also learn that a number of government-backed projects consuming large amounts of aluminium have been or are about to be announced, then it is fairly safe to say that the price of aluminium will be going up sharply in the near future as production facilities have to be re-opened and further investments made.

Going long in aluminium or the stock of a major aluminium producer in such a case gives you an excellent chance of profits. But in order to maximise those profits it is prudent to consult your graphs, or charts. It may be that aluminium is still near a 50 day high and hasn’t yet reacted fully to the news of production cut-backs. This is how you can use a stock market graph system to cover yourself against defective trades, or alternatively give you more confidence that your trade is a good one.

In summary, information is king, but in the financial markets it pays to check it against what your charts are telling you to ensure that not only have you taken the correct position but that also your timing is not too soon or too late. That’s what the most successful traders tend to do. And now you can follow one of them and trade your way to riches.

Just go to our home page and complete the form for your Secrets of Successful Trading.

Philip Gegan