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What Technical Analysis Tools Should I Use When Trading Stocks?

For many, trading stocks is a hobby. It’s a way of engaging with the financial sector, keeping up with trends, and possibly earning a few dollars here and there.

But serious traders don’t treat stock trading as a hobby. They treat it as a business. It can either be their main path towards building an investment portfolio, or it can even be their day job.

Either way, if you want to come out ahead, you need the best technical analysis tools. No trader can turn a profit on their own.

With so much information changing every moment of the day, you need to be on top of it all in a heartbeat. Those who are slow to receive information and act on it will always lose.

Wondering what stock trading analysis tools you are going to need for success? Want to know what the best stock trading platform is? Then keep reading to learn how to take your trading game to the next level.

What Are Stock Trading Tools?

Stock technical indicators are pieces of software that provide clues as to what is happening in the market. The right tools can help you figure out what is being traded and in what volume.

These tools help you as the trader identify patterns in the market. All you need are the slightest clues in order to make effective trades. Of course, you need to know how to read and apply the clues, but that takes experience more than anything else.

Why You Need Stock Trading Tools

So why are these tools important? Because trading stocks is a cutthroat game.

There is a lot of money to be made and many large companies, as well as individual traders, are trying to earn their piece of the pie. Your goal as a trader is to buy low and sell high. That way, you can walk away with a profit each day.

But in order to do this, you need to move faster than everyone else. You need to know what is happening in the market. You need to foresee fluctuations before they take place. And you need all of this information instantly if you aim to compete.

That’s why traders looking to actually earn money need to invest in the highest quality tools they can afford. Having the right tools, and knowing how to use them and read them, will provide a direct correlation to how much money you can make.

Best Stock Market Tools

With that being said, let’s dive into some of the best tools available today. There are different types of tools, including stock market overlays and stock market oscillators.

Overlays simply show indicators directly on top of the prices of a stock chart. Oscillators are plotted either above or below a stock price chart, oscillating between minimums and maximums.

Here are the best of both types of software to invest in.

Average Directional Index (ADX)

This trend indicator is used to track the momentum of any given trend. It’s easy to read and interpret, as any ADX score above 40 shows that a given trend is moving with a lot of strength and should be taken seriously.

Tickeron Time Machine for AI Screener

Wouldn’t it be great if you could go back in time to figure out what types of trades led to the biggest successes? With the Tickeron Time Machine, you can now do that.

With this unique backtesting tool, Tickeron allows you to use market settings that were successful in the past in order to predict what may happen in the future.

They say history always repeats itself. Now you can leverage history with this powerful tool that combines both human and artificial intelligence.

To learn more about how this tool can boost your trading success, check it out here.

On-Balance Volume

The OBV indicator helps you by measuring both the positive and negative flow of a specific stock. It shows the volume of securities moving either up or down.

By analyzing the volume, along with rising or falling prices, helps to confirm trends and anticipate if a trend will continue.

Relative Strength Index (RSI)

This versatile tool helps you perform multiple functions. It shows when specific securities have been overbought and are likely to fall. It also shows when they are oversold and are expected to rise.

And it shows you when an indicator is diverging from the price of a security, showing you when trends are coming to an end. This could indicate a change in direction or a total reverse.

The RSI is a powerful and useful tool that every trader should understand how to read and use.

Other Things Needed for Effective Trading

Sure, you can get by with just a laptop in the beginning. But if you want to take stock trading seriously, you need to get outfitted with proper equipment. This means having a decent office setup.

The fastest, most robust computer you can afford is the most important. After that, make sure you upgrade your home or office wifi so you receive the fastest, most reliable signal that won’t drop at inopportune times.

An external monitor or two will multiply your screen space, allowing you to see lots of moving pieces at the same time.

And since our lives are busy, you want to ensure you have a trading app on your phone. Even if you step away from the office, you can receive important buy and sell alerts to your mobile device.

Having an app ready to use on your phone allows you to take advantage of important opportunities anywhere life takes you.

Investing In the Best Technical Analysis Tools

Trading stocks is not something to take lightly. In order to do it well, and not lose a ton of money, you need to invest in yourself.

That means investing in the best technical analysis tools you can get, along with other basic tools and resources. If you try to get by on the cheap, well, you’ll get what you pay for.

Looking for more tips and tricks like this? Be sure to check out our blog today for other helpful articles.