Trading is an exciting and often lucrative way of making money in the stock markets. Those with the requisite skillset can profit from price fluctuations with little more than their laptop and an internet connection. With that said, there is now a myriad of software and trading tools available to help you better evaluate patterns in trading data and spot profitable set-ups with ease.
Even though stock analysis software won’t turn you into Warren Buffet overnight, it will certainly go a long way to helping you refine your strategies and make your trading performance more efficient and more accurate.
Technology and trading: A match made in heaven
There are no two ways about it; big data has taken the trading industry by storm. Advances in analytics technology have given traders access to an unprecedented amount of information that they can use to base their future decisions upon, increasing the likelihood of profitable trades and reducing the amount of time each trader needs to spend manually analyzing the markets.
Furthermore, AI and machine learning have come a long way in a short period of time, both of which have done a great job at speeding up the execution of trades and helping to better predict markets and execute trades at optimal times.
With that said, let’s take a look at three ways you can leverage this technology to your advantage so you can take your trading game to the next level and improve your trading decisions.
Stock scanners/screeners
Ask any trader what the most time-consuming part of their job is, and nine times out of then, then will tell you it is searching for set-ups. You see, most traders have a particular set of criteria they look for when deciding whether or not to enter into a position. Whether that’s searching for a stock that is trading at all-time highs, reaching overbought or oversold levels, or nearing support and resistance zones, scrolling through the markets to find stocks that match your criteria isn’t easy.
Thankfully, technical stock scanners remove this burden, allowing you to quickly search for stocks based on pre-selected criteria that you define. These tools take away hours upon hours of trawling through the market looking for the perfect stock, meaning you can spend more time entering into profitable trades and less time staring at the screen.
As most people know, one of the biggest challenges traders are faced with is overcoming boredom and refraining from entering into risky trades. After all, we are all human, and spending hours staring at a screen without entering into a position will test anybody’s patience. Stock scanners remove this concern and drastically reduce the likelihood that you will enter a trade based on emotion, which should go a long way to improving your bottom line.
High-quality stock charts
Learning how to properly read charts is an integral aspect of becoming a successful trader. In general, the more accurately you can decipher the charts and understand the information that is presented to you, the more accomplished of a trader you will be. On that note, the more precise and up-to-date your charts are, the better.
However, not all charting software was born equal, and certain companies offer more sophisticated charting capabilities than others. These days you can find charting software that comes with a wide variety of features that you can play around with and use to your advantage. These features allow you to dig deeper into the stock’s history to predict future movements and find opportunities that you may be more inclined to miss without the benefit of this added information.
As for providers, you can usually get access to fairly capable charts with most brokers. However, if you find these are not sufficient, then you should look for external resources such as TradingView, FINVIZ, and Stockcharts.
Trade idea-generation tools
For traders, knowing when to open and close a position is the million-dollar question. As we have already touched upon, people use various tools to find good setups, such as stock scanners and technical analysis tools with charting software. However, this still leaves the trader with a lot of work to do and a whole bunch of information to analyze.
These days, there are idea generation services that you can subscribe to that will help point you in the right direction and highlight key events that you may be interested in. For example, there are a variety of online services that share regular updates on things like:
- Exciting growth stock opportunities
- News on IPOs (initial public offering)
- Company news
- Research reports
- Financial statements
Having access to this information in an easy-to-digest format is a great way to keep yourself updated with market events. It also means you have a much better chance of identifying interesting stocks and trading opportunities that would normally require considerable amounts of research to spot.
Final word
If you’re not taking advantage of the amazing trading technology at your disposal, you’re almost certainly leaving profits on the table. The tools, software, and services that we listed in the article will help you become a better trader by streamlining the process and improving your overall accuracy.
After all, there’s no doubt that the traders who perform best are the ones that have access to the best information, so get on board and take your trading game to the next level before you get left behind!