In the past 10 years I have used a variety of charting tools (TradeStation, NinjaTrader, etc.). I loved NinjaTrader; however I need to be able to access my charts from a web browser and not have to rely on a local program installed on a hard drive. NinjaTrader has tons of 3rd party indicators that notify you of trade opportunities, there are some really awesome ones.
The NinjaTrader platform also includes a bunch of trade management features, but I'm not a day trader and really don't need any of them. In the past year or so Yahoo Finance has spent some time upgrading their charting to a level that's, in my opinion, good enough for the average investor. Yahoo's finance charts don't offer a lot in terms of technical indicators, however I rather have a simple and easy to read chart over one that is filled with tons of difficult to read indicators.
My Yahoo Finance Chart Parameters
I make a conscious avoid analysis paralysis and set up my Yahoo charts with the following parameters:
Time Frames: 10yr (monthly), 1yr (daily), 6mo (daily), 3mo (daily)
Price Graph: Candlestick
Moving Averages (Simple): 20 and 200
Bollinger Bands: Period (20), Standard Deviation (2)
Moving Average Convergence Divergence: Slow (48), Fast (22), Smoothing (9)
As you can see the chart is rather simple, however it displays enough information to help determine wise buy and sell points for the average investor. The best traders will use hard rules to determine when to enter and exit a position, this helps remove the emotions of fear and greed from their decision making process.
Additionally, the best investors will use similar rules (not as hard) to help determine the right time to buy a security. This Yahoo finance chart setup helps me find the best time to enter a position. In my next post I will describe the rules I use when making decisions based on these chart parameters.