An Overview of the Best Stock Market Tools For Stock Trading
The best stock market tools for stock trading are highly dependent upon a stock trader’s trading frequency. If a trader occasionally trades stocks, there are a wide variety of free stock market tools that are suitable for infrequent traders. For more frequent traders, such as swing traders and day traders, fee-based stock trading tools are available that provide more in-depth information about stocks and more control over executing stock traders. Additionally, a stock trader’s trading style and methods are important considerations when one is looking for the best stock market tools. For example, traders who focus on position trading may require different trading tools than momentum traders.
The Best Free Stock Market Tools For Stock Trading
The great thing about being an occasional stock trader is that there are plentiful free stock market tools to assist casual stock traders with their trading decisions. Mainstream financial websites, such as YahooFinance, GoogleFinance, MarketWatch, and Bloomberg provide a great amount of information about individual company stocks, including but not limited to: current and historical pricing information, charts, news, United States Securities and Exchange Commission (SEC) filings, upcoming company events, analyst ratings, insider buying and selling transactions, and income and balance sheet information.
For traders that want to look at in-depth charts and use advanced charting tools to perform technical analysis on stocks they are considering trading, there are a number of free stock charting tools available to assist them. Bigcharts.com is an example of a powerful free stock charting tool that is available to stock traders, which allows them to analyze the charts of stocks in many different ways from line charts to candlestick charts. It also allows traders to compare the chart of a stock versus other stocks or stock market indexes.
For stock research and trading ideas, there are number of free stock market tools at the disposal of casual traders. For traders interested in trading stocks listed on the New York Stock Exchange (NYSE) and NASDAQ stock exchange, sites such as Seeking Alpha and Silicon Investor offer excellent free articles and forums for keeping up with current stock events and finding stock trading ideas. These sites also include occasional penny stock trading information and ideas; however, sites that focus mainly on penny stock trading ideas, such as Investors Hub are better suited for traders trying to find penny stock information and trading ideas. For additional information about penny stocks, the stock quotation platforms that penny stocks trade on, including The Over The Counter Bulletin Board (OTCBB) and Pink Sheets (otcmarkets.com), offer a great amount of free stock market information that can be useful to stock traders.
Many online brokers offer a wide variety of free stock market tools that traders of all frequency levels may find useful, from trading simulators that allow traders to try out new trading techniques and strategies to back-testing tools that allow traders to see how their trading techniques and strategies have performed in a historical context. Another useful trading tool that many online brokers provide is a stock market heat map that visually indicates which stock sectors are currently hot, so traders know where to look for hot trading action and opportunities.
The Best Fee-Based Stock Market Tools For Stock Trading
If a stock trader trades stocks frequently, fee-based stock market tools may be worth paying for, as they provide additional information and trade execution flexibility that can make the difference between a profit and a loss on a stock trade. It is important to understand that the best fee-based stock market tools are highly dependent upon a stock trader’s frequency, style, and methods. A trader that trades once per week may not need nearly as many fee-based stock market tools as an active trader that trades daily or many times in a single trading session.
Many fee-based stock market tools can be obtained through online stock brokerage firms. This makes the task of choosing the correct online stockbroker very important since the trading tools offered by these firms vary widely and are often tailored to the trading frequency of traders. For example, a very useful fee-based stock market tool for traders that trade many times each trading day is order routing to ensure that an order is routed to a particular Market Maker or Electronic Communication Networks (ECN) to obtain the best trade execution price. However, an order routing tool may not be worth paying for if a trader only trades once or twice per week and holds their stock positions for several days, weeks, or months.
One of the most widely used fee-based stock market tools is Level II quotes, which provides real time sales and price data for all Market Makers and Electronic Communications Networks making a market in a stock. Once again, paying for Level II quotes is more worthwhile for frequent traders verses traders that only trade once or twice per week, as the information provided by Level II quotes can be used to route an order to the correct Market Maker or Electronic Communication Network.
Another widely used and worthwhile fee-based stock market tool for frequent traders is real time stock news alerts provided by sites such as flyonthewall.com. Information is power in the stock market, as mere seconds can mean the difference between getting into a profitable trade and missing a trading opportunity, which is why real time stock news alert sites are popular with frequent stock traders.
Stock Trading Tools That Every Stock Trader Should Know About
Whether a stock trader trades once per month or once per minute, understanding how to use the various capital preservation and price level purchase trading tools is critical to successful trading.
Online brokers allow traders to enter limit and market stop loss orders that automatically execute if a stock reaches a predetermined price level below the price at which it was purchased to ensure that the stock is sold before incurring significant losses and a potentially having significant impact to trading capital. Stop loss stock orders can also be used to track a stock as it increases in price to ensure that if it falls, a stock position will be sold and profits will be locked in. This is known as a trailing stop.
A price level purchase limit order is a stock order that is set above a stock’s current price level or trading range. With a price level purchase limit order, a stock will be automatically purchased if the stock trades above a specified price. A price level purchase limit order is used to automatically capture a stock’s upside breakout move before it moves significantly higher to ensure a breakout is not missed.
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