Stock charting software allows investors to perform technical analysis easier. Free stock charting software is ideal for investors new to stock market investing. It will enable them to experiment with the basics of technical analysis and learn about plotting stock chart indicators. As an investor’s skills develop, they may look to more advanced fee-based stock charting software that includes features such as screening, forecasting, and backtesting. Regardless of your investing level, it’s essential first to understand the following:
- What is stock charting software
- How to read a stock chart
- Choosing the right stock charting software for your needs
- Free vs. fee-based stock charting software
- Best free stock charting software
What Is Stock Chart Software?
Technical analysis is a considerable portion of an investor’s trading technique. Stock charting software allows traders to generate various kinds of charts dependent on the price of a stock. They use several technical indicators, the specific number will depend on the quality of the charting software you are using, and most come with filters.
Free stock charting software allows investors to create charts in 1-, 3-, 5-, and 15-minute time periods. While these software programs only gather information from a single data source, making them incomplete, they are still able to assist traders in making better trading decisions based on technical analysis.
How to Read a Stock Chart
Learning to read stock charts and use stock charting software can be overwhelming at first. However, with patience, practice, and a few tips, investors can learn how to buys stocks and know the best time to sell.
A stock chart has different information than what investors find with stocks. Stock charts include plot lines, or charting, that represent price movements of a given stock. Price lines are typically shown in either mountain or line chart form. The thin line shows price movement over a period of time, usually six months or a year. Investors working with interactive charts can set the chart for various time frames from one day to five years back.
Choosing the Right Stock Charting Software for Your Needs
Investors need to keep several considerations in mind when selecting stock charting software, including personal preferences and budget. They should also think of future plans as there’s nothing worse than getting all set up and accustomed to one software and have to change when you outgrow it. Some things to consider when selecting the best stock charting software for you include:
- Cleanliness: Messy charts can drive anyone nuts. They’re difficult to look at, patterns can be impossible to see, and your eyes will grow tired after just a couple of minutes. Many times the problem is users aren’t able to isolate a brief enough period of time to determine how a stock is performing accurately.
- Cleanliness can also apply to the stock charting software’s user interface. Can users navigate easily from screen to screen? Are there hotkeys or shortcuts available that help users work faster? Are the fonts easy to decipher?
- Usability: Every investor is different in what they look for with stock charting software. Investors should make a list of features they’d like to have but could live without, and what features they can’t imagine trading without. Does the stock charting software allow users to adjust parameters for technical indicators? Are they able to choose from various stock types? Can they watch multiple securities at the same time?
Free vs. Fee-Based Stock Charting Software
Many experienced investors prefer software-based systems for in-depth technical analysis over basic web-based systems due to the additional features they offer. These additional features do come at an additional cost making software-based stock charting systems more expensive than web-based options. For this reason, investors just beginning or who don’t focus as much on technical analysis often start with less costly or free web-based systems.
While free has its distinct financial advantages and often states it offers real-time data, it’s important to note it’s not official. Real-time data from free sites typically comes from a single provider, meaning investors may not see all the price movements happening in the exchange-traded fund (ETF) or stock they are watching. They’ll have to purchase official price data if they want this information.
Also, free real-time data isn’t guaranteed to be timely or accurate. Unfortunately, with free sites, investors are required to accept the data as is. When paying for real-time official quotes, investors have some recourse if the data they receive is inaccurate or unreliable.
That said, there is a place for free stock charting software. They’re an excellent training tool for new investors looking to study day trading and develop strategies based on real-time movements of stock prices.
Best Free Stock Charting Software
Free stock charting software allows new traders to learn about plotting stock chart indicators and technical analysis without having to invest a great deal of money. As their skills develop, they can move on to a more powerful stock charting program that includes screening, forecasting, and backtesting.
TradingView provides investors with visually appealing, real-time stock charts that are customizable using hundreds of technical indicators. As a social media site, TradingView allows users to follow other investors and discuss stocks while easily sharing their ideas and charts.
Investors can create alerts and watch lists, see which stocks are trending, and make trades directly from the charts they are viewing. Investors can chart global data, economic data, indexes, contracts for differences (CFDs), bitcoin, forex, and futures, although futures data is often delayed. Investors can purchase upgrade options that provide official real-time data for futures and stock markets worldwide.
Investors can use the Strategy Tester feature to test built-in strategies for particular stocks and time periods or Pine Editor to creates their own strategies to test.
TradingView does offer the most extensive list of economic data, indexes, and markets, so investors won’t be required to switch charting platforms in order to view charts from other markets. It’s also the most socially integrated free stock charting software provider.
StockCharts offers both a free and paid stock charting software option. Investors can choose from a free, basic, pro, and extra subscription depending on what data and features they are looking for.
The free version of StockCharts is rather robust, allowing investors to do candlestick, line, or bar charting. It offers 40+ modifiable technical indicators and lines studies but only lets investors plot three indicators at one time.
Data is displayed either on a daily or weekly basis; however, with the free version, investors can only go back three years for data. Additional negatives to the free StockCharts version include not being able to save screens and bland graphics.
Yahoo! Finance provides free Nasdaq-listed stocks provided by Nasdaq Last Sale, real-time New York Stock Exchange quotes, and real-time news. Many investors like the interactive charts and 100 + technical indicators provided with the free version. They can also create a list of unlimited stocks they are following, get daily trading ideas, and link to their brokerage account to complete trades based on their charting strategies.
Investors can opt to upgrade to the Premium level that includes a variety of additional features, including fewer ads, live chat support, third-party investment research, and enhanced charting capabilities.
Deciding to move from free stock charting software to a fee-based option should be based on if the functionality of the software better fits your trading needs. Most stock charting software provides free trial periods ranging from seven days up to three months. This provides investors an excellent opportunity to try the features included with the paid version out to determine if the system is right for them. Some even offer monthly subscriptions instead of purchasing outright, decreasing the initial cost. Investors just starting out should choose stock charting software that has a good reputation among experts and trusted peers.
Learn more about the importance of technical analysis, and a step to step guide to mastering the market with Jason Bond’s Ultimate Penny Stock Playbook.