Technical analysis is a popular tool in the trading industry. One of the most efficient and accurate methods of predicting market trends, it also offers a means to calculate future prices. With so many different tools available for free online, there is no excuse not to learn more about them and implement them this year! We will go over 6 tools that will give you a leg up on your trading strategy. Are you someone that likes to invest in the stock market? If so, then you’ve probably heard of technical analysis before. Technical analysis is a means of analyzing the market to forecast the direction that a stock may take in its price. It is an effective tool used by traders but also has its limitations.
1 – Wave-Trader Software
Trading software can be used to learn about a variety of different technical analysis tools. Different platforms have different charts and graphs, so looking at a few is great for understanding the variety available. One such application, NinjaTrader, is a free download and offers many tools such as pattern recognition, oscillators, Fibonacci retracements, and much more. NinjaTrader can be used with either real data or simulated data, so it is a great learning tool. According to www.netpicks.com, you should be using wave trader technology. It offers traders and investors support and empowers them to reach their trading goals. A wave trader will give you the ability to look at all kinds of indicators on a price chart. It will help you determine whether momentum is building, waning, or starting to build.
2 – StockCharts
StockCharts is an excellent source for free technical analysis tools. There are over 165 different technical indicators offered at StockCharts.com, an excellent resource for any trader trying to learn about the plethora of tools available. The StockCharts.com blog is also very informative, offering articles on different indicators and strategies as well as tips for trading. Charting software is user-friendly and offers customizable indicators to fit your investment strategy. You can choose to select the timeframe you want to see. The two most commonly used timeframes are daily and hourly charts, which can be chosen on most charting software. When choosing a timeframe, you need to consider how much time is needed for your investment strategy to bring results.
3 – Stock Screener
Stock screener systems are helpful for finding information on stocks that have the right criteria. There are countless features you can use to screen for stocks based on certain conditions. There are also tools that offer pre-defined filters. Filters include price, volume, market cap, and many more. You can also choose to screen for stocks that are overvalued or undervalued, depending on the investment strategy you use.
4 – Tracking Software
Tracking software is helpful for recording your investment activity. It tracks the performance of a chosen security over a specific period, which can include timeframes and market capitalization. The software also records how many trades were made and the profit or loss incurred for each trade.
5 – Candlestick Charts
Candlesticks show price movement over time by using light and dark bars on either end of the stick itself. They provide an overview of how buyers or sellers interacted with each other at specific points in time. The color scheme used changes depending on whether demand was rising or falling but they all represent where prices were at certain intervals (high, low, close). While candles from previous time periods cannot predict the future, they can help spot trends in a market and provide a higher-level view of trading trends.
6 – Moving Averages
Moving averages (MA) are the average closing price of a share over a specific period. For example, an MA of 9 days will take the average closing price of a share over 9 days and plot that value on the chart. When the MA crosses over another MA, this indicates a new trend has begun. When it crosses under another MA this indicates a reversal is about to occur.
Technical analysis is a popular tool in the trading industry. One of the most efficient and accurate methods of predicting market trends, it also offers a means to calculate future prices. With so many different tools available for free online, there is no excuse not to learn more about them and implement them this year! The 6 tools we have mentioned are just some of the incredible resources you can use today with relative ease. Practice makes perfect and the more you use these free resources, the better prepared you will be for market changes.
