When you are a beginner in stock trading, you have to deal with various charting techniques, chart patterns, and trading strategies. You have to learn, understand and experiment with these different factors in order to be successful in your trading.
Reading up on and researching different stocks, trading approaches, strategies and systems is a must. Various stock charts marked up with different lines, text and other shapes in various colors and styles come up as you study training materials or attend a trading course. A number of chart patterns are identifiable only by drawing lines or shapes and marking up the charts. Chart annotations and notes make patterns stand out and emphasize valuable insight to help you make buy and sell decisions. You may ask how you can create beautiful and insightful charts as such a task may present itself to be overwhelming.
The primary tools for market analysis are charts. To verify the validity of your trading strategy, good charting software must enable you to draw and annotate the charts. Lines, channels, fans, arcs, time zones and notes are very useful on charts. Annotations and notes are helpful in the correct visual identification of most patterns. These annotations also serve as a record of your analysis and hypotheses for future reference. Good charting software must allow easy annotations and drawings on charts. The support for common drawing and annotation tools is one of the most important factors in selecting a charting tool. You also need to ensure that the charting package you choose has the right set of tools that can help you analyze and trade effectively.
So what are the tools that great charting software should incorporate to help you get a better insight into successful trading? Outlined below are some of the important drawing and annotation tools that a charting package should provide:
1. Lines
In trading, almost all analysis such as identifying support and resistance levels as well as prices trends are done using line studies. Your charting software must therefore support horizontal, vertical, and trend lines. While making annotations, you could be using lines multiple times on a chart so it is important that your software supports different line styles, weights, and colors to mark up the charts effectively.
2. Shapes
Specific price action or any interesting development on a specific chart can be highlighted using ellipses and rectangles. These shapes make a particular action pattern stand out on the chart. Therefore, basic shapes such as ellipses and rectangles must be supported by good charting software.
3. Symbols
It is very useful to markup your chars using symbols such as Buy, Sell, Exit Long, and Exit Short. It is practical to have a good symbol library as well as the ability to load your own image as a symbol.
4. Text annotation
Good charting software must allow you to type any text on the chart and save the annotation. This capability is extremely useful when you want to share your ideas with your mates, colleagues, or the trading community or even view your past notes about a stock.
5. Line studies
Common and advanced types of line studies must be included in a good charting tool in addition to the basic analysis tools. Analysis of potential movement and price action is done with the help of line studies such as Standard Error channels, Gann Fans, Speed lines, Quadrant lines, Raff Regression, and Tirone levels. Applying these line studies should be a simple process, with no manual calculation of values needed.
6. Fibonacci studies
Fibonacci studies are being used by most analysts and traders as a component of their tool set for technical analysis. To determine trends, support and resistance levels, as well as potential direction of price movement, followers of Elliot Wave Theory use Fibonacci arcs, fans, retracements, and time zones.
I particularly like BlastChart – a stock charting tool specifically designed for those who can’t trade full time but nevertheless want to make smart investments. This tool is easy to use and navigate, and best of all, it is affordable. BlastChart features all the tools as outlined above so it is helpful in effectively finding and analyzing the right stocks for trading. To help new users get started, BlastChart provides all the drawing tools you need. You can manipulate all these tools by changing the color, weight, and style you like and use them consistently in all your charts. This feature is practical in making your chart appear similar to that you may have seen in a training course or read about from your favorite trading expert.
A feature that really impressed me about BlastChart is its amazing capability to do different analyses and studies quickly by marking up charts. Instead of spending my precious time on the manual drawing of lines, arcs, and shapes, I can focus on analyzing stocks.
The consistency found by using templates and presets together with drawing tools and line studies gives me confidence about the accuracy of my analysis. Depending on my trading strategies, I can make a quick examination of the charts using various studies. My decision making hasgreatly improved since using BlastChart and I am more confident regarding the certainty of my trades.
BlastChart also provides training videos to help you acquaint yourself with it thoroughly. The videos provide a quick and easy way to learn about the software and how implement your trading strategies. Apart from this, there is also a lot to earn from the insightful charts shared by the BlastChart community. A free trial version is available for download for you to give it a try. Go ahead and give it a try and start your journey towards trading success!