There are a lot of good online trading tools out there that can be used to analyze the market. These web-based analysis tools can be used to gain insight into where the money is flowing and what types of trends and strategies are working at the moment. If you, as the buyer or seller, are better informed than your counter-part, you increase your chances of success. This is the real difference between an average trader and an elite trader.
Truth be told, web-based tools are not our favorites. Desktop tools tend to run faster and provide a more stable and efficient working environment. Then again, we don't want to throw the baby out with the bathwater. Despite their weaknesses, web-based tools tend to innovate more quickly and they can still be tremendously helpful for doing stock market analysis.
Be careful though. It's easy to get overwhelmed by so much data. Before you start clicking around on all of the analysis tools, it might help to have a question or thesis in mind before you start doing your analysis. That way, you can either attempt to answer the question or prove/disprove the thesis by looking at the evidence (news, price action, volume trends, sector trends, implied volatility, etc).
We recommend starting with the macro picture (the economy at-large, broad indices), then researching particular sectors and industries (SPDR's, other specific indexes), and finally digging into specific stock and options plays based on favorable value, upcoming announcements, dividend payouts, historical volatility, and other traits that make up a good, opportunistic profile.
Of the many online trading tools out there, here are a few of our favorites:
Yahoo! Options Center
- This is an excellent site for easy-to-use options analysis tools. There's too much to mention here, but we especially like the Options Dragon, Most Actives, and Options Analysis Tool.
Options Expiration Calendar
- This is a link to the .pdf version of the OIC's options expiration calendar. Here is the OIC's online version of the options expiration calendar.
- The entire Investopedia site is good, but we particularly like their dictionary of financial terms. The dictionary is fairly comprehensive, the definitions are simple, and they provide links to related terms so it makes it easy to cover an entire topic quickly.
- FinViz stands for Financial Visualizations. Trends are much easier to spot when the raw data is transformed into a visual display such as a chart or heat map. FinViz specializes in these types of financial data visualizations, and they do it very well. These types of data visualizations are some of the most useful trading tools by far.
- This easy-to-use site features interactive charting tools, stock screeners, data feeds, and other useful trading tools. We especially like the site's emphasis on raw data and personal database development for use by advanced traders. The developer of the site demonstrates a passion for developing useful trading databases and trading tools, and his site reflects this well.
- We recently came across this site and were impressed by it's simple layout and useful explanations. For a great introduction to stock market trading you can just go down the left-side menu items and you'll come away with a good foundation of stock market terms and concepts. For seasoned investors, it may be helpful to go through it once for a quick refresher course.