7 Professional Trading Tools You Can't Afford to Trade Without

 

When you’re first starting out in the stock market, it’s easy to be overwhelmed by the number of trading tools available, as well as their high costs. You may think you need all of them to be successful, but truthfully there are seven tools that every serious trader should have, and they won’t cost you an arm and a leg. From analytical tools like market scanners and news readers to backtesting software and portfolio management tools, here are the seven essential trading tools that will help you succeed as a trader at any level.

Whether you are a full-time trader or just dabble on the side, trading tools can make your job much easier. There are two different types of traders out there, those that work from their own computers and those who have accounts with online trading platforms like TD Ameritrade, Robinhood, and E*TRADE Financial Corporation. Either way, you need access to trading tools so you can make well-informed decisions about when to buy, sell, and hold stocks, bonds, and ETFs. Here are seven of the most important trading tools available today

 

1) Charting Tool (e.g. Trader Workstation)

Trading charts are a key component of successful trading and using the right charting tool can really improve your trading. One of the most popular tools is Trader Workstation (TWS). It offers a wide range of professional features that are essential for day trading success.

TWS has over 150 indicators, providing traders with valuable insights into their trades. The trade blotter allows you to see profit and loss information at a glance, while the calendar view can be used to plan out trades in advance. A huge plus for TWS is that it's not just for day traders: it's also suitable for intraday and swing traders. This makes it one of the most important tools that help you trade professionally. When you're considering which charting tool to use, consider these three points: price, number of charts available, and ease of use. Price varies widely between different tools so make sure you compare the prices before choosing which one best suits your needs. Make sure that the number of charts available matches up with what you need so there isn't too much or too little variation. Finally, choose an easy-to-use program that won't take hours or days to learn how to use it!

 

2) Chart Backtesting Tool (e.g. Zorro)

There are many different trading tools that help you trade professionally. The chart backtesting tool is one of these important tools. Chart backtesting is the process of testing a trading strategy on past data to get an idea if it will work in the future. This tool helps traders avoid costly losses and make money by ensuring their strategies have been tested for optimal success rates. If a trader has access to this software, they will be able to test their trades without risking real money, which is essential for anyone who wants to trade professionally. After running tests, they can choose to accept or reject any strategies based on how well they've performed historically. If a trader rejects a strategy before making any actual trades, they will save themselves from potential losses and can start using those saved funds to invest in other ideas with better potential results.

When trading stocks or forex, using this tool as part of your investment plan will increase your chances of financial stability.

The chart backtesting tool also provides insight into what kind of analysis might be needed next after finding out the success rate of specific strategies. It helps traders create more reliable long-term strategies that won't require such high risks in order to reach financial goals like paying off student loans or buying a house.

 

3) Price Action Indicator (e.g. Bollinger Bands)

The most important trading tool for traders is the price action indicator. With this, traders can see what is happening in a market and be able to trade efficiently. The most common of these tools is Bollinger Bands. These bands show when prices are moving higher or lower and where the support and resistance levels are. Other tools that can help with trading include sentiment indicators, stochastic oscillators, and volume indicators. The important tools you need in order to trade professionally will vary from person to person but there are some that every trader should have in their arsenal. One such tool is the price action indicator. With this, traders can see what's happening in the market and trade more effectively. One of the most popular ones on the market right now is called Bollinger Bands. They tell you how much prices are rising or falling and where potential areas of support/resistance might be found. There are also sentiment indicators that measure whether investors believe that prices will go up or down; stochastic oscillators which measure momentum by following either closing or opening prices; and volume indicators which measure how much liquidity has been injected into given security at any given time by dividing total volume by shares outstanding.

 

4) Valuation Indicator (e.g. PPO - Price/Sales Ratio)

One of the most important and potentially most profitable indicators is the PPO (Price/Sales Ratio). The PPO shows whether a stock's price is too high or too low based on how many shares are being traded per dollar of sales. It's calculated by dividing the share price by the last twelve months of sales per share. For example, if a company has $100 million in annual sales and its stock trades at $20 per share, it would have a PPO ratio of 20. On the other hand, if that same company had $5 million in annual sales but its stock trades for $150 per share, it would have a PPO ratio of 3.3. The higher the PPO ratio, the more undervalued the company is. The lower the PPO ratio, the more overvalued the company is. To buy low and sell high, it's essential to use this tool when deciding which stocks to buy.

 

5) News Feed & Social Media Monitoring System (e.g. SNS Ninja Pro)

With increased regulatory pressures and the need for continuous surveillance of market sentiment, traders must be able to keep up with all the news and social media activity that pertains to their investments. This is where a professional news feed and social media monitoring system can help. A news feed aggregates all relevant financial data from top sources, while a social media monitoring system provides real-time alerts on discussions about your tradeable securities. Investing in this type of technology will give you an edge in the market by keeping you informed of what's happening at all times. Your ability to react quickly and decisively could mean the difference between profit and loss. That's why it's important to always know what information is available before making a trade.

 

6) Trading Journal & Performance Metrics Tool (e.g. AlphaShark Dashboard)

A trading journal and performance metrics tool are two essential tools that can help you trade professionally. A trading journal records your trades, thoughts, and emotions in real time so you can analyze them after the fact. Performance metrics track key statistics like the number of trades per day, winning percentage, average win size, etc. You should also look for tools that will help you manage your trades - such as stop losses or trailing stops - and make sure they're aligned with your strategy. As well as tracking things like time spent on each trade, how many trades a day you do, and how often you buy or sell stocks. These metrics give you an overview of your trading activity and show if you're getting ahead by increasing the profits on winners or limiting the losses from losers. If not, then it may be worth looking at some more detail about what's working best for other traders before committing more funds to this style of investing.

 

7) Risk Management Dashboard (e.g. AmiBroker, TastyWorks, etc.)

A risk management dashboard is an essential tool for traders. It helps you keep track of your risk levels, lets you see your performance over time, and gives you a full picture of what is happening with your portfolio. A risk management dashboard will also help you maximize profits while minimizing losses by providing information on the probability of winning trades and the average profit or loss on those trades. Risk management dashboards come in a variety of forms and can be customized to fit your tradingstyle so they are worth looking into no matter what type of trader you are. They range from simple spreadsheet programs like Excel to more advanced programs like AmiBroker. TastyWorks offers both types of tools in one place so that traders don’t have to jump between different programs which saves them time and money.

 


Trade is the lifeblood of every successful business, whether it’s online or off, and when it comes to trading professionally you can never have too many tools at your disposal. From market research tools that help you identify the perfect time to buy or sell to personal finance software that helps you save money and invest wisely, every trader has their own unique set of tools they use on a regular basis, but are the seven that you simply can’t afford to have.

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