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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

Stock Trade Software Advice For All Readers

The emergence and development of stock trade software to the levels of sophistication that it now occupies is something that must be welcomed by financial traders. But does this mean that anyone using such software in trading on the stock exchange can make money more easily?

Not surprisingly, there are dozens of stock trade software packages available, all claiming to be able to regularly select profitable trades. Just a search on Google for it gives at least 30 such packages out of the top ten results. A few are free but most carry a price tag of between $20 and $500.

Generally speaking, you get what you pay for. If you are serious in your efforts to generate substantial profits from financial trading then you should not skimp on the software you are going to use. If you’ve joined our list and especially if you’ve started trading under the same mentorship as me then you’ll know that we use Sharescope, which is not too expensive and contains all the features you need, and more.

It doesn’t purport to find trades for you (which frankly no software can really do), but it’s the program the successful professional traders use. Used in conjunction with guidance and advice I receive from my mentor, himself a multi-millionaire who has been successfully trading in the financial markets for 20 years or more, and a reliable internet stock broker, this software has proven its worth many times.

Nonetheless, let’s take a brief look at what any stock trade software needs to include.

1. Scope of Data

As a serious financial trader, you need access to data covering all sections of the market, from company stocks to foreign exchange. Make sure that lesser known instruments such as Unit Trusts are included. All the companies listed in the stock exchange you trade on should be included in the data available. The “All Sectors” companies listed on the London Stock Exchange, for example, number nearly 8,500, and the number of instruments available to trade is nearly 22,000. And there are over 320 indices.

Unless you day trade, which personally I do not recommend, you do not need up to the minute data. The previous trading day’s closing prices are quite sufficient. (This will be welcome news as it invariably works out quite a bit cheaper.)

2. Depth of Data

Make sure the data you can obtain for any share, index, commodity or other financial instrument includes not only a price history going back years but also charts, with a facility to make your own simple moving averages, and news feeds. The latter is particularly important if you include fundamental analysis as well as technical analysis in your method of making trading decisions.

3. Reliability of Provider

Check out how long the provider of the software and service has been in the business. Find out what you can about the package and the provider from online forums and by doing a search on your favorite search engine. You’re looking for easy access to help and technical support by telephone and email, as well as recommendations for accuracy and integrity.

You’ll also want to satisfy yourself that you can understand the user guide and that it covers the program comprehensively. If there is a demo version of the software available then download and use that before deciding if the program is for you.

Get to know how to use the software thoroughly. And if you haven’t already done so, fill in the form on our home page and click Submit. That will be the most important thing you do all day.

Philip Gegan

How To Assess Online Trading Brokers

The sheer number of online trading brokers, with all their colorful sites and flashing logos, probably adds to the pressures facing newcomers to financial trading, rather than making life easier. Such is the competition that many of them seek to entice you with special offers such a lower fees. But don’t allow yourself to be hurried into selecting a broker. Consider your strategy first.

What part of the market do you want to concentrate on first? Do you want to trade in shares, or in futures and options? In commodities from a regular account, or speculate in forex from a spread betting account?

For example you may be of the view that company shares in the energy sector are set to increase in value over the next year and more. In that case you will want to invest in several selected energy-related companies. Will you simply purchase the shares or go for futures and options?

The latter means purchasing the right to purchase a quantity of shares at a fixed future date at a fixed price based on their price now. If your trade was successful then you would in effect be buying the shares at maturity of the option at a discount. You could then either sell them and pocked the profit, or keep them if you think they are going to carry on increasing in value.

If you are more interested in the foreign exchange market then you should study currencies and form an opinion on which currency pairings offer the best prospects for profit and what price movements in the medium to long term are likely.

The important thing is to learn as much as you can about all the various financial instruments you can use to profit from and the different kinds of brokerage packages available and how they relate to each other. And to do this before considering which broker to use.

Brokers invariably classify themselves under a number of headings, though in reality often one broker will cover all these classifications. For example, there is a stock trading broker, a forex trading broker, an options trading broker and a futures trading broker. All these are fairly self explanatory, and all services are normally online. But just because you are currently interested in one of these types of broker, e.g. a forex broker, it’s best not to make your selection of broker on that criteria alone.

In any event forex brokers are often specialists in foreign exchange and do not touch any other kind of market. As a beginner it’s best if you avoid these and select a well-known broker that covers all kinds of markets, including forex. This gives you flexibility in your trading without having to open another account with a different broker (and fund it).

Brokers also classify themselves according to whether they are promoting “discount” services or “full service” services. Again, in reality, most brokers offer both kinds of service. The full service is more expensive as the broker gives advice on proposed trades and may even suggest trades for you to enter, and when to come out. The discount service does not include this advice, but merely lets the trader use the broker’s trading platform and certain other facilities, for example an online forum or charting package.

Most newcomers to financial trading opt for a discount service broker. Not only is this a cheaper option, but it gives flexibility in selecting independent sources of information and advice in making trading decisions. If you’re still unsure, check the forums for opinions of current traders on which online stock brokerage is best. Or check those brokers on the web site of the appropriate regulating authority.

And one final thing. Whatever you do, find someone who will be your mentor, so you’ll know that you just cannot fail. Someone who has made millions himself from trading the financial markets, and who would love to teach you how to copy him. Just go to our home page, fill out the form, and click on Submit. Simple as that.

Philip Gegan

Your First Online Stock Trading Account

Once you open and fund an online stock trading account, you’ve committed yourself to financial trading in a way that no other action does. Perhaps you’ve read  about investing and trading in shares, options, futures and so on, and maybe mapped out a business plan and set targets. But actually parting with your money and using it to buy and sell stock market securities is the watershed.

How successful you will be in online stock trading is governed not just by your own trading activities. It’s the kind of account you opt for and the broker you choose, as well. Most people open their first account with a discount broker. Here, the trader simply uses the broker’s facilities in order to place, amend and close his own trades without even asking the broker for an opinion. It’s the equivalent of the old “execution only” account. But is this the right account for you as a beginner?

Bear in mind that you are probably starting with a modest sized account of perhaps $2,500 to $5,000 and your knowledge of the stock market and its mechanisms is limited. This means you have to be cautious, at least until you are familiar with the online stock trading environment. You also need as much help and advice as you can get, but of course this comes at a price. You could opt for a full-service account from your broker, which includes advice, sometimes pro-active. But although prices have come down considerably in recent years, this can still be expensive, and it isn’t necessarily what you’re looking for.

Most new traders rely largely on the wide range of information available, often free of charge, on the internet. Forums and brokers’ sites are good sources of this information, much of which not so long ago was available only to full-service account holders of certain brokers.

Information from other sources is available if you are prepared to pay for it, but its quality and accuracy is sometimes open to question. That’s why it’s so important to have an account with a reputable online stock brokerage that has reliable information readily to hand on its web site.

As to which broker to start with, someone like Charles Schwab, if you’re in the United States, is ideal for a beginner. If you’re in the United Kingdom then probably Barclays Stockbrokers would be hard to beat. You could look at other market leaders like E*Trade, Fidelity and Scottrade to see which one you feel most comfortable with. Check them on your favorite search engine and on the stock trading forums and sites such as Investopedia for any opinions from existing customers.

Whichever broker you choose, it is vital that you don’t follow any untested advice, wherever it originates from, unless you can somehow validate it at no risk to yourself. For example, a new trading strategy can be tested with a demo account so you don’t risk real money. The only problem with that is the time it’s liable to take.

Probably the best thing you can do as a beginner is to find a successful online financial trader and see if he will teach you his methods. This may mean some financial investment on your part, but it will pay off handsomely. Just click through to our home page, fill out the form and click on Submit.

Philip Gegan

Your Internet Stock Broker Should Tell You This

Here’s a question for your internet stock broker. “What is likely to be happening on the world’s stock markets from the autumn of 2009?” Even if you have a full service broker who advises on a pro-active basis about actual and prospective investments, I doubt he’ll raise this with you. To be fair, it’s probably because he hasn’t thought things through, or doesn’t want to believe the current market rally will end soon.

It’s very likely that the present bull market in shares, that started in March 2009, is but a short-term rally in a largely bear market. Just take a look at the present situation both in the US and in the UK and many other western countries as well.

The economies of the US, the UK and most other western countries are drowning in debt. Take the US. The government has a tax revenue income of around $2 trillion a year. Added to that is around another $2 trillion that it is somehow able to borrow. It has a Treasury Bond Debt (or national debt, if you like) of $12 trillion. Some people maintain the true figure is much higher, but nobody seems to know for sure. $12 trillion seems a conservative estimate, but lets stick to that for now.

Added even further to that is $65 trillion of unfunded social security and Medicare debt and the 2009 budget deficit of $2 trillion. That’s a total of $79 trillion total debt owed by the United States government. Future generations of taxpayers will have to struggle to cope with the repayments of capital and interest.

In the UK it’s not quite as bad, but still pretty awful all the same. Its growing debt burden is expected by S&P to balloon to 100 per cent of its GDP by mid-2010.

In the US banks are again lending recklessly to individuals and companies with little chance of ever repaying it. To be more precise, they are continuing to make corporate loans that for the most part won’t be repaid. And they won’t be repaid because the recession is hitting both the retail and manufacturing sectors, causing bankruptcies and insolvencies, the most famous of which has been of General Motors.

This lending is in fact responsible for the mini-boom consumers (or at least those that still have jobs or businesses) have been enjoying for the last few months. But this mini-boom cannot last. The underlying recession, loss of jobs and rising insolvencies will see to that. And the corporate debt sector is already around three times the size of the sub-prime mortgage sector that has caused so much trouble up to now.

So you can see for yourself that the rally in share prices of the period April to June 2009 is just that – a rally in a bear market. Check with your online stock brokerage that they provide the facility of purchasing “put” warrants, so that you can short companies set to spectacularly lose their share value. And then wait for the autumn.

Philip Gegan