Investing could be what helps you reach financial independence. For a lot of people, investing feels like it’s out of reach. However, that doesn’t have to be the case. You may not know where to start when it comes to investing. Reading up on the subject and using the right tools could make things so much easier. Let’s examine a few tools that make investing easier.
1. Trading Simulators
First of all, you’ve got to walk before you can run. Don’t put your money on the market without having some experience. Use a paper trading tool to see how your trades would perform. These let you invest in real-time conditions. But, you don’t have to put any real money on the line. It gives you an opportunity to see how things would go. If it’s a winning trade, it’ll help to build your confidence. But, if it’s a losing trade, it won’t hurt your pockets. This is a great way to gain some experience and learn about investing without having to sacrifice any money.
2. Margin Loans
Margin loans are something you should use once you’ve figured out the basics. Essentially, they let you use the bank’s money to execute your trades. That makes it possible to gain a lot more if the trade is successful. Using leverage also expands your risk, though. So, if the trade goes south, you could be on the line for a whole lot more. Only use this option if you are an experienced investor.
3. Pivot Level Indicator
Plenty of traders understand the basics of support and resistance. There have been a ton of tools that track them. However, they’ve become less useful as they’ve grown in popularity. Now, you can use something else to achieve better results. NinjaTrader® pivot levels indicator lets you figure out accurate levels much faster. Their algorithm determines the winning trade without waiting for the usual 4 touches. That way, you’ll be able to operate ahead of the rest of the pack.
4. Charting Tools
Charting tools are one of the most essential things any trader should use. Even inexperienced traders have probably seen one of them. But, the right charting tools let you see things like the RSI. Tracking various indicators makes it possible to perform sophisticated technical analyses. That’s how you’re able to see where the market is heading. Candle charts are one of the most basic. But, there are plenty more where that came from. Try using a lot of different tools. The more you’ve used, the more you’ll learn.
5. Stop Losses
What’s your risk tolerance? Entering a trade isn’t easy unless you’ve determined what’s an acceptable loss. Fortunately, that’s where you can use stop losses. These let you limit how much you’d lose on any potential trade. If you enter the market, set one of them. Then, if there’s a downturn, it’ll sell your position automatically. That way, you don’t wake up with an 85% loss on your position.
Usually, people hesitate because they’re worried about losing money during downturns. But, that’s because they’re unaware you can make money during them. Shorting a stock is when you bet against the price. If you think the price will go down, then you can short the stock. Then, once the price declines, you can make a tremendous gain on your position. Shorting stocks does come with a downside, though. There are potentially unlimited losses. So, don’t short stocks unless you know what you’re doing.
7. Stock Screeners
Stock screeners let you know which stocks to purchase. They’ll do all the technical analysis behind the scenes for you. Then, you’ll be given a list of potential trades. Some of them will be strong buys. Others might be strong sells. However, you’ll just have to read the screener’s report to see which of them is the best bet. A lot of beginning traders have made their first winning trades by using them.
How to Use Tools Improve Your Investing
The right tools make investing so much simpler. When you’re first entering the market, the right tools make all the difference. Don’t keep doing the same things you’ve always done. Instead, leverage the benefits of technology to improve your performance. Start by using a couple of the tools we’ve just discussed. However, you shouldn’t limit yourself to just them. There are tons of tools out there that could help you trade better.