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Do investors need trading tools today?
I must admit I was a little skeptical when I was invited by ino.com to trying out their suite of tools for traders, which they felt would be useful for readers of this blog. My initial thoughts were that their tools are probably not going to be applicable because
- SMSF trustees are long term investors, not short-term traders and
- they currently do not cover stocks listed on the Australian Stock Exchange.
But I am always open to new ideas so I decided I would try out their products for a month. I also realised that I do have a number of visitors who do invest in the markets they cover such as the US and Canadian markets, who may find this review useful.
Ino.com’s flagship product is Marketclub which provides a simple but useful tool they call “trade triangles”. A trade triangle indicates a change in trend and that can help you decide when to get in or out of the market. They have two types of trade triangles – monthly and weekly. The monthly trade triangles picks up changes in long term trends and are more useful to the longer term investor. After using marketclub for a while, I actually found it more useful than I first thought I would. My first impression was good – I liked the site a lot because they use a lot of multimedia like videos, audios and even talking charts which makes the site very interesting. I really like the video analysis that ino.com founder Adam Hewitson does twice a week. He uses a lot of the same technical analysis methods that I use like trendlines, fibonacci retracement levels and Japanese candlesticks. It is much easier to learn when you are able watch him mark on the charts and talk about it as with this video analysis of the DOW.
I set up my portfolio of stocks, ETFs and indices that I watch in my Marketclub account and I get a daily portfolio analysis by email which also alerts me to any change in trend in any of the markets that I follow. The daily emails are useful as I don’t have time to check the charts of each market everyday. In the past one month that I have been using Marketclub, I have received monthly trade triangle alerts on three of the markets I follow, which have helped to confirm my views on these markets. The first was a bearish triangle on the Reuters/Jefferies Commodities Index, which is a good index to watch if you have mining stocks. The second was a bullish triangle on the USD/AUD chart as shown below.
Even if you don’t own US listed shares, it is a good idea to keep an eye on this chart as the strength or weakness in the US dollar affects a lot of Australian listed stocks. Mining companies such as BHP and Rio Tinto sell products that are priced in USD. Companies like CSL and QBE sell a lot of their products in the US, so most of their revenue is in USD. The exchange rate can affect their share price and dividends. In a way, we are all exposed to currency risk, even with a portfolio of only Australian blue chip stocks. The third was a bearish triangle on Silver. I used to own shares in SLV which is an ETF for silver. I sold them a couple of months ago based on my own analysis, and this bearish signal helped to confirm that I made the right decision. Check out Marketclub’s recent video analysis on Gold if you own or plan to buy Gold.
The DOW is back at 10,000 which is where it was 10 years ago, the Nikkei is at 10,000 where it was 25 years ago and the All Ords is at 4600 where it was 5 years ago. However, if you bought stocks in March 09 and sold in Jan 2010, you could have made a 50% return. Perhaps it is time we challenge the conventional wisdom of “Buy and Hold” or “Time in the market” is better than “Timing the Market”. Timing the market is tricky and this is where trader tools like Marketclub, which are based on technical analysis principles, can help you get started. The cost for joining Marketclub is quite reasonable at USD449 per year. You get analysis of 230,000 markets which include stocks, futures, ETFs, Forex and more, and other benefits like up-to-date global market news, investor education and historical data. As a comparison, I currently pay AUD1400 per year for a service that only provides fundamental analysis for 200 Australian stocks. Start your free 30 day trial today!
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[...] Technical Analysis: Do investors need trading tools today? | SMSF … [...]
[...] performance of commodities globally, and not just Australia. I mentioned in my Feb 16 post that the Marketclub tools had already showed a bearish monthly trade triangle, which is a long term sell [...]