Ninja Trader: Research, Charting, and Trading


You have your 6 monitor setup. You have a trading workstation that is the envy of other traders. But have you strengthened your trading foundations already? Without core and essential skills, you will just end up losing your capital.

When it comes to stock trading, there are three basic steps that you need to follow: researching, charting, and trading. These are the foundations of stock and trading and the sooner you master them, the sooner you will be able to see real results.

How to Research Stocks Before Buying

First, master the art of researching. Buying stocks is a lot like buying a gadget or a new vehicle. It doesn’t matter if you have a 6 monitor setup. If you don’t back it up with good research skills, you won’t be able to know what to buy.

Companies listed on the stock market are all different. While many traders base their trades on technical specifications, it’s still important to do your research and learn more about the company you are trading with. Additionally, this is true if you plan on trading on that stock for a long time.

In the stock trading market, this is called fundamental analysis. Moreover, this should go hand in hand with your technical analysis to create a more effective trading plan.

Here are some tips on how you can properly do your research or fundamental analysis:

Tip #1: Get your hands on the financial records.

You can obtain certain financial records for your quantitative research. If you can, get their annual report. These financial statements are usually audited independently, so you can see how much money is coming into the company.

Your brokerage firm should also have a summary of these records on its website. Check your brokerage firm’s website and check out its features. Click on the individual stocks and then more information on them.

Tip #2: Focus on what is important.

We are not asking you to become a financial expert overnight. Use your 6 monitor setup to narrow down your search to what is really important, which is the total revenues of the company, their net income, and their earnings per share.

After that, you can also check their returns. Their ROE (Return on Equity) and ROA or return on assets will tell you how well a company is doing.

Tip #3: Learn more about the essentials of the company.

How do they operate? How do they fare against their competitors? Furthermore, is their management good? What are the things that can potentially go wrong in their operations?

It’s important to note that when you buy a stock, you are buying not because you want the price to increase. You are buying it because you want to own a portion of that company. If their operations don’t sit well with you, it’s time to look for something else.

Charting Tips to Aid Your Analysis

Charts let you see the movements of stocks. Today, many trading platforms are so advanced that traders can extract a wealth of information from their 6 monitor setup. However, that can also be a problem, especially for beginners, who might suffer from information overload.

This is where charting comes in. Utilize your 6 monitor setup to create a chart that will help you make fast decisions in trading. Here are the charting tips that you should use:

Tip #1: Use the right colors.

It’s tempting to make your chart as colorful as possible. However, keep in mind that you will be looking at these colors from your 6 monitor setup most of the time. There should be a proper contrast with the charting colors or you will end up confused.

Ideally, you should keep the background colors neutral or muted. Try basic colors like black, white, and grey. Avoid anything too loud, such as neon colors, as they can strain the eyes. Neon colors also make it more difficult to monitor your indicators.

After that, you can choose colors for the rest of your chart. Pick your gridline color. Make sure you also change the prices and axis to different colors. There should be a nice contrast to the colors so that you can easily identify them.

Also, you can use colors to identify your strategies. For instance, you can choose a color for your graphs that will depict your exit or entry strategies.

Tip #2: Maximize your trading workstation layout.

Having multiple monitors is recommended for trading. You can start with a 4 or 6 monitor setup and increase it as you see fit. Assign a monitor for a specific purpose. For instance, one monitor can be used for order entries while another monitor can be used for charting.

Tip #3: Use the right font style and size.

Ideally, you should use bold fonts for emphasis. This will make it easier to read your chart. Adjust your font size depending on how many things you have on your monitor.

For instance, if you are using a 6 monitor setup and you have multiple monitors dedicated to charts, you can make the font size bigger. Furthermore, it’s important to have consistency in your font sizes. Use the same font size for each selection.

Tip #4: Remember to save your setup.

You went to all that trouble to tweak your setup. Make sure you save that on the platform you are using. Lastly, you may want to take a photo of your setup. In case you lose it, you can easily set it up again using the photo as a reference.

Become a Better Trader

It doesn’t happen overnight. If you want to become a better trader, you need to be a learner. You need to accept mistakes and learn from them.

First, have a solid plan in place. You should think of trading as a business where a plan will help you get to places. Use whatever tools you have, such as your 6 monitor setup to your advantage.

Formulate strategies that will help you hold on to your capital. Always be willing to study the market and practice the psychological aspects of trading. Once you master these things, you should become a successful trader with your 6 monitor setup as your arsenal.

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