Tools I Use

Now that we have begun to discuss the recent past of the markets and briefly prepared for our investing future, we need ways to follow and navigate the daily and/or weekly happenings of the market action. The most important part of my market analysis involves following the price action. This is not nearly as complicated as it seems and i will show you the tools i use to track the market progress.  To effectively follow the markets you don't need a 24 news feed from CNBC, you need a charting program available on the internet. The charting program I use and recommend is FreeStockCharts.com. This is the best free charting program I have found and is very easy to customize your company's stock charts. Here is a quick screen shot of a chart I have made from my watch list:

This is a saved chart but rest assured that they appear much clearer and larger when you make them yourself! This is a chart of a big winner this year, Home Depot (HD). Very basically the lines that I have drawn indicate that the stock is in a steady uptrend and the price bars are approaching the lower trend line (this indicates a nice risk/reward opportunity to buy the stock). The arrows I have added for my own reference to where I have bought and added shares or sold shares.

The point is that this is a very easy to use, free program you can get online. We will be referring to a stock's price chart very often in our studies, so it is important that you familiarize yourself with them. We will begin looking at what these lines (trend lines, support and resistance areas, etc) mean and how they are used in a near future post.

Other tools (All Free!) you will like to reference are:
-Investopedia: this is essentially a dictionary and educating site that will explain any investing term or concept.
-StockCharts.com: this is another charting site (free) that also shares a blog with frequent updates on market happenings
-Google.com: simply search any term, company name or concept in Google Search and you will find tons of information.
-CNBC/Yahoo Finance: Sometimes we need news. Just make sure you don't get too much of it. Breaking news is fine, trading the ideas on CNBC is not.
-Finviz.com: This is another charting and information website. I mainly use it to track the Futures, Currency, and World Markets.

Blogs I Like:
-JoeFahmy.com: Joe is an experienced trader who has a very good sense of market sentiment and offers excellent general trading advice.
-AllStarCharts.com: Excellent trade setup and watchlist site. J.C. Parets frequently discusses trade ideas and many notable stock charts.
-TheKirkReport.com: This is actually my favorite site and is the site that exposed me to the other blogs I like. Unfortunately this is a subscription based site ($100/year) so you need to be a member to see new content. Although I will say that if you take your personal trading/investing seriously I would consider the small yearly fee to subscribe. Mr. Kirk has helped improve my trading more than any other influence. This is an education based site and does not offer direct buy/sell advice.
-bclund.com: This is a very well written and humorous website, but still with lots of good trading advice and setups as well.

That is it. The list I reference when I need market information. I really only want beginners to focus on FreeStockCharts.com and Investopedia. Bookmark these into your browsers and get familiar with the layout. You will find most of the information you need to invest successfully in these two sites; Investopedia for questions and concepts, FreeStockCharts for streaming price action.

In our next post we will talk about building a list of stocks you will want to follow. This will require the FreeStockCharts program, so go ahead and sign up for it (they require your email and name, really though they rarely send me something and its very legit). Once you have the charting program, take some time to think about a few stocks you may be interested in. Think about the company you work for (AT&T, Costco, etc) or companies whose products you use (Apple, Buffalo Wild Wings, Home Depot). Write a couple down and type the stock ticker symbol into your charting program (you can find the stock symbol for any company from Google) and just take a look at the price movement in the past year or so. Is it generally going up, down, sideways? These are the first observations you will need to pick your stocks to watch. We will look into some specific companies from my list in the next post to give you some idea of what we will be searching for.

Thanks for reading. I will see you in a day or two.