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To become a better trader, it is important to have the best stock trading tools. Tools such as charting platforms, automated trend line analysis, trading simulators, and technical and fundamental analysis will help you gain a better understanding of the financial markets.
With the volatility in the financial markets, interest in stock prices is skyrocketing. It is not surprising that more and more of us are interested in the stock market, either because we have invested capital or because we are sensitive to economic developments. There are platforms, applications and some specialised stock market courses that allow you to make or view stock market charts in real time.
With society’s growing interest in financial markets, what tools are available to follow market prices?
TECHNICAL ANALYSIS
Technical analysis is a way of approaching the study of opportunities in a market and determining when to enter, exit and, in general, manage our positions. There are countless indicators, recognisable patterns, techniques, and trading systems. Therefore, the important thing is to know a few tools that complement each other well and learn to use them thoroughly.
Don’t try to learn technical analysis all at once. It is just one tool in our stock market speculation system, and it will be enough for you to know a few key basic concepts and a couple of indicators in depth to put you light years ahead of most people who put their money in the stock market. It is a question of quality rather than quantity.
CHARTING
With charts you can see the trends in a stock’s price over periods of time, such as days or weeks, or even years or decades. The following are some sites that offer charting platforms to have a better knowledge of how the stock prices move throughout time.
Yahoo! Finance
It is perhaps the best-known website on this list for most traders. This service is very similar to that offered by Google Finance, and it is known for its strong charts. Through Yahoo Finance you can obtain and download the historical prices of many listed securities.
The charts it provides are very easy to interpret and use, and on the website, you can follow the latest relevant news that may affect the prices of any stock or market. Users have the possibility of creating a stock market portfolio with products with lower or higher risk, in which they can make comparisons and review the evolution of values, as well as make decisions to invest at a precise moment. It also has an application for different systems.
Google Finance
This is a Google technology option for technical stock market analysis with a very clean designed charting system for all investors. It offers information on the most important events that have occurred on a given day, which have an impact on the market or the most important securities.
Finviz
The charts that we can find or create are very easy to read, we can overlay several indicators and other data such as line, candlesticks and OHLC. Users have access to real-time pricing in daily, weekly, and monthly time frames.
TRADING SIMULATORS
By using trading simulators, you will be able to review the impact of trades or investment decisions in a virtual environment before executing real trades with real money.
Investopedia, Virtual Stock Exchange and Wealth base are major financial sites which offer stock simulators.
FUNDAMENTAL ANALYSIS
Fundamental stock analysis undoubtedly encompasses many more aspects than simply studying political and economic news that may or may not affect stock prices in the short or medium term. In fact, professional investors and speculators who regularly invest in this type of financial asset analyse in detail the companies that issue the shares in order to obtain objective indicators that allow them to determine whether the present and future conditions of these companies will have a positive or negative impact on the price of their shares.
For example, these investors analyse the financial health of a company to determine whether it is a good long-term investment or whether it is advisable to sell the company’s shares due to poor financial and management performance. In this way, a trader may decide that it is more profitable to open short positions in a particular stock in order to profit from a possible fall in its price. The factors that professional investors analyse are many and varied and are used to get a true picture about a company they are considering as an investment alternative.
When it comes to stocks, fundamental analysis is a technique that attempts to determine the value of a stock by focusing on underlying factors that affect the company’s current business and prospects. In a broader scope, we can apply fundamental analysis to industries or to an economy as a whole. The term simply refers to the analysis of the economic well-being of a financial entity as opposed to the study of only its stock price movements as in the case of technical analysis.
In this way, fundamental analysis allows questions such as the following to be answered:
- Is the company’s revenue growing?
- Is the company making profits?
- Is it in a strong enough position to beat its competitors in the future?
- Is it able to pay its debts?
- Is the company’s management trying to misrepresent its financial results?
Of course, these are extremely important questions to ask before buying or selling a stock, although in fact there are literally hundreds of other questions we can ask about a company. However, all of these questions seek to answer one overriding question: Is the stock of a given company a good investment? We can think of fundamental analysis as a kind of toolbox that will allow us to answer this question.
One of the main assumptions of fundamental analysis is that the price of a share on the stock market does not fully reflect the real value of the share. After all, there would be little point in price analysis if the stock market were always right. In financial jargon, this real value is known as the intrinsic value.
