Use These Three Tools to Find Free Trading Ideas in 2011

Ask any up-and-coming trader, and their biggest gripe is bound to be the same: it’s hard to find profitable trading ideas. That shouldn’t come as a huge stock – after all, there are literally thousands of publicly traded stocks out there. How do you know which ones to focus on?

The advent of social media and online apps has provided some new-world solutions to that problem. As other, successful, traders become more apt to share their trading thoughts, the pile of free-trading ideas keeps on growing…

Here’s a glimpse at three online tools that could provide your portfolio with additional gains as we approach 2011.

1. StockTwits.com

Twitter’s known for keeping people to the point. With only 140 characters at your disposal, tweets (as these messages are known) are a concentrated way to communicate with other users of this immensely popular site. And for traders, they’re an even more attractive way to share trading ideas.

Why would traders want to post their profitable trading ideas for public consumption?

There are actually some serious incentives for traders who post their thoughts Twitter. Posting trades on Twitter is a good way for traders to hold themselves accountable to a trading system – and it’s also a good way to get feedback from others. Because of that, we’ve seen a huge jump in the numbers of traders who tweet about their trades.

So then, how can you get investing ideas from Twitter? One of the most easily accessible ways to see which stocks are getting attention is by checking out StockTwits, a site that aggregates traders’ tweets to about specific stocks. Not only can you search stocks by ticker – you can also find out which tickers are the most popular on any given day just by visiting the site’s homepage.

2. FINVIZ.com

For traders who rely on charts, screening for trading opportunities can be challenging – after all, unless you’re a numbers whiz, quantitative screens can be hard to figure out. And sifting through a bevy of charts to try to find tradable patterns isn’t much of a viable option either…

That’s where FINVIZ shines. The site, which is short for “Financial Visualizations” lets traders screen stocks based on their chart patterns without having to worry about the numbers that drive that price action. So, if you’re looking for a small-cap stock that’s forming a bullish ascending triangle pattern, all you need to do is input that into the site’s screener, and you’ll be presented with charts that already have technical indicators drawn in.

Not surprisingly, FINVIZ provides quite a few false positives – computers are picking out the technical setups, after all. But for traders who’d otherwise be stuck sifting through a thousand charts, this website is a phenomenal (and free) addition to your toolbox.

3. TheLion.com

Measuring trading chatter is essential – especially when you’re trying to understand why a stock’s making a move. But scouring all of the best sources for trading insight can be a time consuming process, particularly when you’re looking at more than one stock.

Enter TheLion. Like StockTwits, TheLion pulls tweets about stocks and puts them under one roof. Unlike it, however, TheLion also aggregates message board posts and blog entries about stocks, covering a much wider range of content. While that also exposes users to additional noise than can be hard to sort through on incredibly busy trading days, it offers a good alternative when StockTwits isn’t finding any comments about why a stock is moving and what actions other traders are taking.

Just remember to take any message board comments with a grain of salt…

A New Day for Trading Tools

These three tools are just a glimpse at some of the free resources that are available to investors today. And with new upstart applications constantly hitting the trading scene, it’s never been easier to generate profitable trading ideas.

Do you have a suggestion for a trading tool worth checking out? Leave a comment below…

Cheers,
Jonas Elmerraji
Penny Sleuth

December 14, 2010

Use These Three Tools to Find Free Trading Ideas in 2011 was originally featured in the Penny Sleuth. Check out Wall Street’s 5 Most Profitable Penny Stock Patterns Report.

This story was originally featured on Penny Sleuth.

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