The days of reading stock quotes in the newspaper are long gone. Now, stock traders get streaming quotes on their smartphones, buy stocks via those phones or advanced trading platforms, and get company news and updates via Apple Watch alerts, chat rooms and Twitter.
Bottom line: If you’re not taking advantage of stock trading technology, you’re missing out. The following tools can streamline your process, improve your research capabilities and (possibly) boost your returns.
1. A strong trading platform
Choosing a broker with a robust trading platform is step one, and it can be a tricky balance: Often, brokers with advanced trading platforms have higher trade commissions or require a minimum number of trades or minimum account balance to access the platform.
There are, however, some clear winners here: TD Ameritrade leads the pack with its thinkorswim and TradeArchitect offerings, both of which are available to all customers (though the broker’s trade commissions are on the high side at $9.99). OptionsHouse also has strong trading tools and charges half the commission at $4.95 per trade. And for advanced traders, Interactive Brokers has a well-regarded platform and low per-share commissions, though the broker does impose monthly trade minimums.
Find the best brokers
- Top-tier research and reports
- Commission-free ETFs
- Comprehensive customer service
2. A mobile trading app
If you’re serious about trading, you’re going to want the ability to do it on the go, which means choosing a broker with a strong mobile trading app. These apps range from bare-bones — the ability to execute basic trades and view quotes — to near mirror images of a web or desktop platform, with advanced capabilities like charting, complex options trades and screeners.
In our roundup of best investing apps, we picked TD Ameritrade and E-Trade as the winners for stock trading — both offer near-desktop trade capabilities on their mobile platforms. But if cost is your primary concern, Robinhood and Loyal3 are worth a look. Both services offer commission-free trading, though Loyal3’s selection is limited to around 70 blue-chip stocks.
3. Stock screeners
Stock screeners take much of the weight off the trader’s plate, allowing you to quickly search for a stock based on criteria you’ve defined, like market capitalization (in other words, the value and size of the company), dividend yield, industry or share price.
Most of the trading platforms offered by online brokers include a screener (and some brokers also have screeners for exchange-traded funds, mutual funds or options). But many advanced traders recommend Finviz, which has really in-depth screening capabilities that can help you dial down to trade opportunities. The site also offers charts, U.S. and international market maps and quotes. The basic services are free, but Finviz offers an elite subscription that starts at just under $25 a month.
4. Stock charts
Charting is integral for any trader who uses technical analysis, which involves evaluating past movements as a means to predict future performance.
Stock charts assist in that analysis by showing the performance of a security over time, allowing traders to recognize patterns and look at various technical indicators. Users can use charts to dig into a stock’s history and recognize volatility, as well as compare multiple securities and benchmark performance to indexes, like the S&P 500.
Online brokers offer charting capabilities that vary in depth; outside resources include websites like TradingView and StockCharts.com, which both offer a number of free features as well as upgraded memberships. StockCharts.com offers a ChartSchool to get new users familiar with charting.
5. Idea-generation tools
There are a lot of ways to come up with trade ideas, including subscription-based services. Briefing.com is one of the most popular, offering everything from live market updates to IPO previews to emerging growth stock opportunities. Another service, Seasonalysis, identifies seasonal stock trends.
The other way traders research a stock is through fundamental analysis, and that involves digging into financial statements, company news and outside research reports written by professional analysts. When you do this, you get a clear picture of how individual companies and industries are doing, and that can lead to trade ideas.
Brokers often provide this information from third-party sources; the more research available, the better. Fidelity in particular is known for its breadth of research.
This post was updated on 9/30/2016.
Top image via iStock.