Investing well is centred on access to information. What you know about a potential investment and when you know it is crucial. Your success will be highly correlated with how good the data you have available to you is, as well as how effectively you analyse and interpret it.
For every endeavour there are certain tools that can be used to vastly increase your chances of success. In the case of making investments, the tools can take the form of information sources and trade execution services.
Of the many different tools available to investors, some are more helpful than others. Here we highlight four of the best, lay out why they are potentially key to your success in making money from stocks, and explain how you could use them.
Keeping an eye on share charts is essential for stock picking investors
An economic calendar
‘Being aware of an economic calendar is immensely helpful and useful for investors,’ says Sam North, market analyst at eToro
This is fundamental to investing well. An accurate and comprehensive economic calendar will map out the upcoming events which are most likely to move the markets. With equities prices so closely linked to inflation data releases and central bank moves like Federal Reserve interest rate changes, investors have to keep a close eye on when they are happening.
To make the most of an economic calendar, investors should check it at regular intervals for any updates, cross-reference it against their expectations, and adjust their portfolio or strategy in line with what they find.
‘Being aware of an economic calendar is immensely helpful and useful for investors as it provides a schedule of upcoming economic events and data releases,’ says Sam North, market analyst at eToro.
‘This information enables investors to anticipate market movements and adjust their investment strategies accordingly. Knowing when not to invest is equally important as knowing when to and therefore being aware of key data points is imperative. This awareness allows them to capitalise on potential market fluctuations, profit from anticipated trends, and avoid costly mistakes that might arise from uninformed decisions made in response to unexpected economic developments.’
‘For example, if an investor knows when the latest Inflation report is coming out, they might choose to not invest before the release, waiting to see how the market reacts before making a more informed decision,’ he adds.
Charts
While price charts can help all investors understand what’s been happening to stocks and in markets, they are also vital for technical analysis
Stock market charts are an important tool for seeing how shares and markets have performed and can help investors visualise what is happening to a stock price.
Charts can zoom in on the day’s action, or zoom out to look at periods of days, weeks, months or years.
While price charts can help all investors understand what’s been happening to stocks and in markets, they are also vital for technical analysis.
Accurate price charts allow investors to add technical analysis to their decision-making process. While fundamental analysis is concerned with how a company itself is performing, TA only considers the price movement of a stock. What the company actually does is entirely incidental.
There is a myriad of TA techniques to learn, from simple things like identifying obvious support and resistance levels in the price action, to highly complex analysis methods. This can all be cross checked with fundamental factors and added into the decision process before making a trade, if you desire.
Investment platform eToro has an online learning academy that is home to regular courses and videos designed to develop your knowledge and understanding of technical analysis.
Not all investors are convinced by technical analysis – and some critics argue it often retrospectively fits patterns to a narrative – but the basics are worth understanding as it is so widely used.
Charts are available in many places, including in This is Money’s share data pages and at investment platforms like eToro .
A popular free resource that offers technical analysis overlays is TradingView, which has established itself as one of the top providers of asset price charts for investors around the world.
‘Utilising a strong charting package like TradingView offers investors valuable benefits,’ North says. ‘These platforms provide customisable visual representations of market data, aiding in technical analysis for identifying trends and entry or exit points. Real-time updates enable informed decisions, while clear visuals simplify complex information. Overall, TradingView charts enhance investors’ ability to interpret data and make well-informed trading choices.’
Price alerts
Rather than having to spend your entire day or week watching a screen, you can set up alerts which will tell you when it’s time to spring into action
When considering making a move, whether it’s a buy or a sell, investors should have a clear idea of what they think the right price to pull the trigger at is. First you must come to this conclusion through a combination of fundamental and technical analysis. At this point is where price alerts come in. Rather than having to spend your entire day or week watching a screen, you can set up alerts which will tell you when it’s time to spring into action.
‘Price alerts can be extremely useful for investors, enabling timely and automated updates on the price movements of assets they are interested in,’ says North. ‘They offer the advantage of quick reactions to opportunities and risks, helping investors buy or sell assets at desired price levels.
‘These alerts also aid in avoiding emotional decision-making, maintaining strategy discipline, and protecting investments by triggering actions when prices reach predetermined thresholds. If someone was to just set price alerts, in theory, they could help facilitate diversification management, reduce transaction costs, and prompt further research.’
One-click trades in real-time
Share prices can move large amounts in just seconds, so the quicker a trade is executed the better
So, you have done all your research carried out some TA and set up price alerts. An alert pings on your phone. This is where one-click trading comes in. The last thing you need is a long delay between making a decision on a trade and it being executed. Share prices can move large amounts in just seconds, so the quicker a trade is executed the better.
‘One-click trading is a valuable tool for investors, offering quick trade execution,’ says North. ‘It accelerates the process and can reduces missed opportunities, especially in fast-paced markets.’
To explore some of the tools of the trade, you can check out eToro and explore how these features can be helpful when it comes to investing.
This communication is for information and education purposes only and should not be taken as investment advice, a personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without taking into account any particular recipient’s investment objectives or financial situation, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past or future performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication.
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