The Best Trading Tools
Trading Tools: Let’s talk about the best trading tools. What tools do you actually need for trading? Which of these tools are the best?
For me, personally…
I use three different trading tools
- Charting Software
- Trading Software
- Broker Platform
First of all, you do need charting software that helps you to find the best stocks to trade.
We’re going to talk about two different charting software packages here in a moment.
And the second tool that you need is your broker platform. And honestly, for me, this is all I need.
I don’t use anything else. You want to stay focused.
So, what are the tools that I like to use?
Well, you have seen it over and over here again. The tool that I like to use is my software, the PowerX Analyzer.
When trading, there are three things that you need to know:
- What stocks to trade
- When to enter
- When to exit (with a loss, or with a profits)
This is a tool that I use that will give you an overall idea of what the markets are doing.
You see, this what we can use to analyze the Dow. And yes, you can use Trading View to actually plot the three indicators right underneath.
And this helps you then to see whether a stock is more likely to go up, down, or sideways.
Here is my challenge with Trading View.
The first challenge is that it is hard for me to read the indicators. So, the indicators that I like to use are the RSI, Stochastics, and the MACD.
And when you plot them on a chart, it is sometimes difficult to read.
Looking at the Dow Jones, I want to see that the purple line is above the orange line. Here I could enhance it, and then I get the idea, or the easier way for me, is to do it on PowerX Analyzer.
Let’s look at an example.
We’ll use RYAM. This is one of the stocks that I bought today. It’s perfect.
The RSI is above 50. The Stochastics is above 50. So, that’s perfect. And then, apparently today, or yesterday, it was the first day when we saw the purple line above the orange line.
For me, it is so much easier to see this because this is where I color my charts.
When all three indicators are true, I color the charts green because this means that now, the stock is more likely to go up.
When I see that all three indicators are pointing down, I color the charts red, which means that it is more likely for the stock to go down.
If only two of these three indicators are true, this is when I’m plotting a black bar.
Learn more about this in detail
To learn more about this, please visit mytradingroutine.com.
This is where I explain all of this in more detail.
Right now, I just want to talk about the tools that I personally use, and that I think that you should be using.
Knowing when a stock is more likely to go up, down, or sideways.
That is a great thing, and this is what you can do with any charting software.
The reason why I started programming my own charting software, the PowerX Analyzer, is because now I want to know, based on all the stocks that are being traded in the U.S., which are the ones that right now show us a buy or sell signal?
And this is why I built in a scanner into the charting software, the Power X Analyzer.
It’s the scanner that I run every day. Now the scanner shows me two to eight stocks that I could possibly trade.
And now the question is how exactly do I decide what stock do I want to trade? And this is where I’m looking at the past performance.
Trading View, Trade Station, Think or Swim
They do not give me the information that I personally need for my trading.
Now, for you, it might be different, but you see, for me, I want to know if I had traded this stock over the past year, using my rules. Again, the rules you can find at mytradingroutine.com.
It’s very easy. It’s three indicators. Nothing complicated there, but I want to know if I had traded this stock according to my rules, how much money would I have made over the past year?
This is where PowerX Analyzer helps me and shows me…
Okay, if I had a $10,000 position and I had traded RYAM over the past year, using the rules of the PowerX Strategy, I would have made $7,864.
So, based on a $10,000 position, that’s 78.6% return on investment within a year.
How do you like this? That’s pretty good, right?
It also shows me that I would have had 12 wins and 7 losses. Meaning that my winning percentage is 63%. So, out of 10 trades, I can expect 6 trades to be winning trades.
These numbers give me confidence in this trade to actually place the trade.
It also shows me that my profit factor is 3.7.
What does this mean?
It means that over the past year, if you had traded this stock, RYAM, using the PowerX Strategy, it means that for every dollar that you lost, you would have made $3.70.
These are the three really important numbers that I need to know before I am placing a trade.
In summary, what are the best tools?
Well, the best tool is a tool that helps you to stick to your trading strategy.
And this is why I programmed the PowerX Analyzer to make sure that it shows me exactly what to do.
You need charting software, and trust me, I did try using the free or inexpensive charting software packages that are out there, and they just couldn’t do what I wanted the PowerX Analyzer to do.
Which is to tell me exactly what stock to trade.
It tells me exactly what to do, when to enter, when to exit. How many shares to trade. And then…
This is most important for me
It tells me exactly what would have happened over the past year if I had traded the stock according to my criteria – because this gives me the confidence to place the trade.
The only other software that you then need is your trading platform, and in another article, I talked about the best brokers for 2019.
The good news is, your broker gives you the trading platform for free.
So, that’s it. I don’t use any other trading tools.
These are the only three that I use, and Trading View I mainly use for teaching at my live Bootcamps.
What tools are you using? Leave it in the comments below!
By the way, if you would like to come to one of our Bootcamps, they’re free.
There you will find all of the upcoming dates.
I hope that you enjoyed reading this blog as much as I enjoyed making it for you. And if you know anybody who might find this helpful, please, feel free to share it.
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