If you are intent on trading the stock market professionally, you need to equip yourself with the tools the professionals use. To successfully buy and sell shares is not the easiest thing in the world, in fact only a minority of traders actually make a profit. You should therefore find all the help you possibly can.
Trading Shares – Prices
A source of reliable share prices is essential. Becoming a successful day trader is going to be very difficult if you do not have live prices. For a swing trader, operating in a time frame of weeks or months, prices that are delayed by fifteen minutes or an hour might be perfectly adequate. A long term trader/investor can usually get by with end of day prices, since such a trader bases buying and selling decisions on the long-term performance of a particular share.
Many online brokers provide free prices, either live or delayed. If the broker of your choice does not offer the price feed you need you will either have to sign up for a paid service offering a price feed or find another broker. Most spread trading firms like FinancialSpreads.com will provide clients with live prices.
Trading Shares – Charts
If you have ever looked at a list of opening, closing, maximum and minimum prices for a share, covering a substantial period, you will understand the importance of graphs. The old adage goes that a picture is worth a thousand words and nowhere is this as true as with share prices. A good charting package will enable you to see, at a glance, what could take hours to calculate if you were working with raw price statistics.
Most spread trading firms provide free charting packages. If yours does not you can either buy a good online package or downloaded one for free.
Any package should be able to import live share prices and analyse historical trends. Most charting packages offer graphical displays, including not only of the price, but also a host of technical indicators, for example moving averages, Bollinger Bands, True Range, momentum oscillators and volumes.
Share Trading – News and Analysis
Access to market news and analysis is also important for any share trading. It could be of vital importance to know that a particular company you are thinking of investing in has developed a major new product. You would want to have such knowledge instantly rather than learn about it days or weeks later. Most websites that offer share prices also display relevant company news, and other related data which you may find useful.
Expert market analysis can also be very useful. It will help you to develop your own critical thinking and make you a better trader, in the long run. Just beware of ‘experts’ who are promoting a particular share, because they have a vested interest in doing so.
Share Trading – Money Management Tools
Many experienced traders will tell you that without proper money management even a good trader will fail over the long term. You have to learn how much to risk on a particular deal, how often to trade, the maximum number of open trades you should have at any one time and the total risk you should expose yourself to at any given moment.
There are software packages that can help you with this. They are not intended to replace your own common sense, but simply to speed up your decision-making processes, based on certain criteria you have defined.
Spread betting is a geared form of investment, it carries a high degree of risk to your capital and can result in losses that exceed your stake. Ensure that it matches your trading needs as it might not be suitable for all investors. Before making any trades, make sure you are fully aware of the risks. Only trade with money you can afford to lose. Where you feel it is appropriate request independent financial advice.