Trading Tools at Compass Asset Management

Find out about the Trading Tools that make the trading world tick, and discover the mechanisms behind market prices.

How To Use Trading Tools?

Regardless of what type of market analysis a trader uses, there is a set of tools needed in order to do the job effectively. Traders can not do everything themselves and need certain tools to carry out particular functions to get them through the day. Not having them could mean failure. Obvious basic tools are a computer, phone, or tablet, additional monitors, internet access, a charting package, technical analysis tools, and an execution platform.

Less obvious perhaps are a checklist, a cheat sheet, a trading journal, a stock screener, a calendar, a currency correlation tool, specific reports, a market hours timetable, a news squawk, a handy tool to calculate pivot points, or an optimal position size calculator. Whether they are charting tools or newsgathering tools, whether they are high-tech tools or low-tech tools, whether you find them online or offline, serious traders rely on various must-have tools to support them. Selecting the right ones is crucial for smooth and efficient trading. 

Economic Calendar

The economic calendar refers to the scheduled dates of significant releases or events that may affect the movement of individual security prices or markets as a whole. Investors and traders use the economic calendar to plan trades and portfolio reallocations.

Currency Converter

A conversion rate is a ratio between two currencies, most commonly used in foreign exchange markets, which designates how much of one currency is needed to exchange for the equivalent value of another currency. Conversion rates fluctuate regularly for all currencies traded in forex markets.

Forex Heat Map

A heatmap is a two-dimensional visual representation of data using colors, where the colors all represent different values. A heatmap can be used with all sorts of data, from the real estate market representing the number of foreclosures to the spreads of credit default swaps (CDS) to webpage analysis reflecting the number of hits a website receives.

Leverage Trading

Leverage results from using borrowed capital as a funding source when investing to expand the firm’s asset base and generate returns on risk capital. Leverage is an investment strategy of using borrowed money

Why You Should Consider Using Trading Tools?

Day trading requires that you have a set of tools and services in order to do your job effectively. Some of the required tools you likely already have. Modern-day trading is electronic, so day traders access the financial markets via the internet. It’s also a good idea to have a telephone in case you need to call your broker, and you will need a computer or laptop to access the internet and make your trades.

Other tools you may not have yet. These include a direct access brokerage, real-time market data, and a trading-charting platform. All these tools and services are broken down in greater detail below, so you can see what you need, and get your day trading career started on the right path.

Traders need many tools for their active trading lifestyle. These include the basics of hardware, software, and other more standard physical desk items. 

Day Trading Charting Software

Compass Asset Management provides a number of software options that traders can use to trade and monitor the price charts of financial assets. Day traders want to use trading software that allows them to easily pull up price charts, with an option to view tick charts and timed charts (1-minute, 5-minute, hourly, etc).

Different software is designed for different types of traders. Day traders need software that allows them to make trades quickly, without a lot of redundant or unnecessary steps. Compass Asset Management has a popular software that allows for trading and charting. Overall, the software can be utilized in multiple ways. Some software programs are compatible with certain brokerages.
Compass Asset Management has software for all in one access. In some cases, you may have software add-ins that can connect with your trading systems in different ways to support your trading efforts. Finding the best software for your trading needs and connecting it with your trading service is important for the success of your trading activities. 

More Interesting Trading Tools in Compass Asset Management:

Bollinger bands

A Bollinger band is an indicator that provides a range within which the price of an asset typically trades. The width of the band increases and decreases to reflect recent volatility. The closer the bands are to each other – or the ‘narrower’ they are – the lower the perceived volatility of the financial instrument. The wider the bands, the higher the perceived volatility.

Relative strength index (RSI)

RSI is mostly used to help traders identify momentum, market conditions, and warning signals for dangerous price movements. RSI is expressed as a figure between 0 and 100. An asset around the 70 levels is often considered overbought, while an asset at or near 30 is often considered oversold.

Standard Deviation

Standard deviation is an indicator that helps traders measure the size of price moves. Consequently, they can identify how likely volatility is to affect the price in the future. It cannot predict whether the price will go up or down, only that it will be affected by volatility. 

Trading Indicators Explained:

Whether you’re interested in forex trading, commodities trading, or share trading, it can be helpful to use technical analysis as part of your strategy – and this includes studying various trading indicators. Trading indicators are mathematical calculations, which are plotted as lines on a price chart and can help traders identify certain signals and trends within the market.

There are different types of trading indicators, including leading indicators and lagging indicators. A leading indicator is a forecast signal that predicts future price movements, while a lagging indicator looks at past trends and indicates momentum. 

Start Investing in Three Simple Steps

Create Your account

Create a new account on Compass Asset Management in less than a minute with only a registered Email needed to begin.

Fund Your account

Deposit funds into your personal wallet. Once your account is funded, you’re ready to trade.

Begin Investing

Explore the industry-leading tools available at Compass Asset Management and Begin Investing with access to Trading Tools with full access to our powerful charting and trading software.

What are the most common Trading Tools?

Stock Screener 

A stock screener is a set of tools that allow investors to quickly sort through the myriad of available stocks and increasing exchange-traded funds according to the investor’s own criteria. Stock screeners are most typically available on brokerage trading platforms (usually free), but there are also some independent subscription-based stock screeners available. Stock screeners allow investors to employ their own methodology about what makes a stock or ETF valuable (longer-term traders) or spot a potential trading opportunity (shorter-term traders).

Trading Newsletters

A market letter is a short publication that informs investors and other stakeholders, often via paid subscription, about a particular category of investments. Market letters will typically focus on a specific area of investing, such as growth stocks, value stocks, or real estate.

A real estate market letter, for example, might provide commentary on market trends and Real Estate Investment Trusts (REITs). A market letter regarding growth stocks may inform individuals on a selection of stocks that are poised for significant growth in the future.

Moving Average

The MA – or ‘simple moving average’ (SMA) – is an indicator used to identify the direction of a current price trend, without the interference of shorter-term price spikes. The MA indicator combines price points of a financial instrument over a specified time frame and divides it by the number of data points to present a single trend line.

The data used depends on the length of the MA. For example, a 200-day MA requires 200 days of data. By using the MA indicator, you can study levels of support and resistance and see previous price action (the history of the market). This means you can also determine possible future patterns.

Fibonacci retracement

Fibonacci retracement is an indicator that can pinpoint the degree to which a market will move against its current trend. A retracement is when the market experiences a temporary dip – it is also known as a pullback.

Traders who think the market is about to make a move often use Fibonacci retracement to confirm this. This is because it helps to identify possible levels of support and resistance, which could indicate an upward or downward trend. Because traders can identify levels of support and resistance with this indicator, it can help them decide where to apply stops and limits, or when to open and close their positions.  

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