By Shaun J., Sr. Traveling Stockbroker and Guest Blogger
I walked out of my house one morning on my way to work and noticed I had a flat tire. Not the way to start my morning!
No big deal, I thought to myself. I’ve changed flat tires in the past. I’ll take care of this and still make it to work on time. I grabbed the scissor jack that came with my Chrysler® Pacifica and got to work. The vehicle goes up, I quickly swap out my tire, and then BAM! My scissor jack gives way and my Pacifica comes crashing down.
My neighbor, who happens to be a mechanic, noticed I was struggling and brought over a fancy hydraulic car jack. In a fraction of the time it took me, he lifts my vehicle and locks it in place. We swapped the tires and I was on my way.
Moral of the story: Use the right tools when you do-it-yourself.
Here are a few tools you may want to consider using when you do your own trading or investing to help you find opportunities and test new strategies or manage risk:
Interpret Technical Charts
Deciphering technical charts takes time, and when there are not enough hours in my day I find the Scottrade SmartText® tool pretty handy. I like this tool because it converts complex technical analysis into a straightforward message. So I can spend more time finding opportunities and less time interpreting technical charts.
View video on how to use this tool to help you interpret charts.
Find Potential Trading Opportunities
I like to think of this tool as a streaming stock screener. With Trade-IdeasTM Alerts in ScottradeELITE®, you enter criteria for the stocks that fit your strategy and the system scans the market in real-time feeding all matches to your alerts inbox. I’ve configured an alert that shows me all stocks nearing their 52-week lows in efforts to participate in a potential price rebound.
Test Your Trading Strategies
If I plan on trying out a new trading strategy, I like to use the backtesting tool. It enables you to calculate the odds of winning trades based on the Trade-IdeasTM Alerts that you have configured. You can analyze your strategy using one of your watch lists or your portfolio holdings, and see results for the last 15 trading sessions. Viewing my backtesting results shows me the potential success and pitfalls of a strategy before putting my real money to work.
View video on how to use this tool to help you backtest your strategy.
Determine Market Momentum
NASDAQ Velocity® and Forces® measures levels of pre-trade order activity in the NASDAQ trading system. It indicates the intensity of trading interest and relative buy versus sell pressure for NASDAQ, NYSE and Amex listed securities. Getting a visual representation of this type of market momentum can help you get a head start on a move up or down.
As a DIY trader or investor, what are your favorite tools to use when finding opportunities or developing a strategy?
Also of Interest:
Shaun J. has been with Scottrade since 2007 and works as a traveling stockbroker.
Articles, commentary, and opinions expressed on this site are those of the author and not necessarily those of Scottrade. Scottrade does not guarantee the accuracy of, or endorse, the views or opinions of the author.
The examples and strategies described in this blog are for information purposes only and their use does not guarantee a profit. None of the information provided should be considered a recommendation.