To be good at anything you need knowledge, ability and the tools to be successful. Here are the types of tools you will need to be successful in the stock market:
Technical Analysis Tools
The most important tool for investing in the stock market is a stock chart. In order to conduct proper stock chart analysis and be able to find stock chart patterns, your chart charts should have the following features:
Daily, Weekly, Monthly and Intra-day time frames (1-, 5-, 10-, 15-, 30- and 60-minute intervals). Detailed price and volume data including the 50 and 200 Day Moving Average Lines Customizable moving average lines (simple and exponential) 50-day moving average volume lines A Relative Strength line and ratings
A few other features that make the job easier are:
- A track-price tool that displays on click: the date, high price, low price, last price, price percent change, volume, and volume percent change relative to the 50 day moving average volume.
Fundamental Analysis Tools
To conduct fundamental analysis you need to be able to dive deep into company information and really get to know the strength and weaknesses in their story. The best stock market research tools will consolidate the necessary company information in a quick, easy-to-use format that also incorporates stock chart data. When evaluating fundamental analysis tools, make sure they are providing:
Important company historical events like IPO date, new CEOs, dividend dates etc
Earnings Estimates and Historical Annual EPS
Quarterly earnings and sales data
Financial margins and ratios like Return on Equity, profit margins, price to earnings etc.
Industry Groups Analysis Tools
Having tools to help you spot industry group trends and know which specific groups are leading the cycle is vital to your stock selection. In every bull market, certain areas of the economy experience tremendous growth, and as a result, attract a lot of attention from Wall Street.
Studies have shown that roughly one-third of a stock’s move can be related to its industry group. Keep in mind, the industry that leads in one bull market will often be different from the one leading the next bull market. It is critical to identify which industries have the most potential to benefit in the next bull market. Tools that categorize stocks based on industry and report on the relative performance on these industries will help you focus in on the stocks most likely to appreciate in price. Just as you would review the technical strengths of individual stock charts, the same type of analysis can be done on a chart of the entire industry.
Institutional Sponsorship Analysis Tools
Research Routine Tools
Research routine tools help you tie all of the other kinds of tools together. Having powerful tools to conduct research is important, but routine tools help you work efficiently and save you time. The best research routine tools integrate many types of tools into a single platform that enables you to quickly find ideas, analyze those ideas, and manage them all in one place. Some tools that you should consider that will help you with your research workflow include:
- Screening tools
- Watchlists
- Customizable checklists
- Chart markup tools
- A digital trading journal
- Stock price alerts
- Portfolio management tools
