Your Trading Tools

This is the third issue in my “Get Started Trading” series.

My trading toolbox is one of the most important parts of my trading journey. Check out my “Tools Of The Trade” post for details on the trading tools I use. I keep this post updated.

There’s one tool that’s not on that list that I consider to be the most important trading tool. That tool is Research.

Research Is The Most Powerful Tool

Research is an essential part of trading. Research provides clues that help determine what to trade, when, and at what price.

Here’s a breakdown of how I do my research:

1. I focus on one particular industry or sector that I know. My sector is Tech. My niché’s are apps for creative professionals and Internet Service Providers. I have more than 10 years experience with both.
2. Within those sectors, I focus on two select companies: Apple (AAPL) and Nvidia (NVDA).
3. I read news about my select companies, their partners, and competitors. I look for time sensitive events like when they buy or sell a stake in a partner company, when executives buy or sell shares, news, new product announcements, customer feedback, etc.
4. I read company annual reports and financial statements and IRS . Among the most common SEC filings are: Form 10-K, Form 10-Q, Form 8-K, proxy statements, Forms 3,4, and 5, Schedule 13D, Form 144, and Foreign Investment Disclosures. The annual 10-K report provides a comprehensive summary of a company's financial performance. Proxy statements are released prior to shareholder meetings and before voting on the election of directors and other corporate actions. These documents contain valuable information about what a company is focused on publicly, and what their priorities are.

I consider research to be the most important tool for successful trading. It takes practice and time to get good at doing trading research. But in my experience, the benefits are awesome.

Happy trading!