Stock analysis is an important process that helps you investigate and evaluate a stock, any other trading instrument, or even the stock market as a whole. It is a method using which investors and traders make safe and profitable buying and selling decisions. When carried out manually, stock analysis takes days and even weeks, plus requires a good amount of knowledge and understanding. Thankfully, there are stock analysis tools that help you speed up the entire process and find the worth of stocks in an easy way.

If you haven’t used any stock analysis tool till now, then this article is for you. Here, we will discuss what a stock analysis tool is, and how it is used along with some other useful information. Let’s begin!

Stock analysis tools like stock screens, charting software, etc. are must-haves for beginners.

Why Stock Analysis Is Important?

Stock analysis allows you to gain an in-depth insight into the stock market, securities, or the country’s economy as a whole. It involves researching and learning the past as well as present stock market data and devising a methodology in order to select the right stocks for trading. Besides, stock analysis also helps you determine the right time and way to enter and exit the market. These are the reasons why you should perform a comprehensive stock analysis before making any final investment decision.

What Is A Stock Analysis Tool?

A stock analysis tool is basically a software or an application that helps you determine whether or not the selected stocks are worth investing in. These tools make the stock analysis process swift and easy. And because they do not require a lot of expertise, they are ideal for beginners. Using them, you can find out the right stocks based on your preference, predict their future price, analyse their performance, and whatnot.

Main Types of Stock Analysis Tools

There are many different types of stock analysis tools available out there. What’s the right one for you will depend entirely on your trading style, investment goals, and personal preferences.

Below are some of the most commonly used stock analysis tools :

Stock screeners

A stock screener is perhaps the most popular and reliable stock analysis tool. As the name suggests, it is used for filtering out the stocks based on some criteria. You can use it for scanning the entire stock market and it will provide you with insightful data such as the stock price, average trading volume, chart patterns, and more.

Charting software

A charting software tells you about the performance of a stock, or any other trading instrument like index or fund, over a specific period of time. Charts can be shown using either candlesticks or lines. Most day traders prefer using candlestick-based charting software as it offers more relevant data as to whether to enter or exit the market.

Stock simulators

Stock simulators, dummy trading accounts, or paper accounts are the tools that allow you to practice your trading strategy or fundamental analysis without investing your real money. Such kind of software is very useful for beginners as it helps them learn how trading works and how they can make better buying/selling decisions.

Stock market newsletters

Stock market or trading newsletters are well-designed messages or emails that tell investors about the changing market movement, new stocks and other investment opportunities, latest developments and so on. Trading newsletters or other kinds of trading material keeps you updated and hence, great for beginners.

How to select the best stock analysis tool?

We have discussed what a stock analysis tool is and how it can be used. Now, to help you select the right tool, we have listed a few important points you need to look for in a stock analysis tool of your choice.

1.Make sure it offers real-time data

Having the most relevant real-time data is very crucial for a trader. The reason behind this is, a stock’s price changes in a matter of seconds. So, it is very important to have access to the most recent information on the charting pattern, price movement, and trading volume.

Always prefer the stock analysis tools that offer accurate real-time data or live market streaming. Moreover, if you’re looking for dummy trading, then choose software that allows you to trade alongside the real market. This will provide you with the best learning experience.

2. Make sure that your tool is customizable

Everyone has their own trading styles and strategies. So, when it comes to the best stock analysis tools, the definition varies from person to person. A good idea is to have a tool that offers necessary customization options so that you can use it according to your requirements.

3. Make sure it is easy to use

A stock analysis tool will be useless if it is too complicated to use. So, make sure to select a tool that is simple and easy to use. The good news is, most tools come with a free trial offer using which you can test them and decide whether they are suitable for you or not.

Stock analysis tools not only help you make the right trading decisions, but they also save you from potential risks by allowing you to analyse the stocks and the entire market. We hope the above mentioned points help you in selecting and using the right stock analysis tool.