When they first enter the trading world, first-time traders often struggle because of a lack of understanding of methodology, concepts, or direction to be followed. To assist traders, Investopedia offers a dedicated Chart Advisor section, which includes numerous stock trading strategies with recent examples applicable to current developments in the market.

Here are two examples of how novice traders can use the Chart Advisor section to build their own trading strategies, knowledge, and models.

Benefits of Chart Advisor:

  • Most details and examples are based on recent developments, meaning content is not only helpful but also relevant, enabling more timely trading decisions.
  • Demos include clear examples of emerging trends, show the applicability of relevant technical indicators, and highlight impact analysis on tradable securities.
  • Additional details include impacting factors usually not known to novice traders, e.g., impact of increase in rates by the Federal Reserve, seasonal patterns in commodity trading, etc.
  • Highlighted trading opportunities include live examples across multiple asset classes, clearly mentioning applicable stock tickers, funds, ETF, etc., providing precise information to traders and enabling easy trading decisions.
  • Coverage includes a wide variety of tradable securities spread across common stocks, commodities, foreign exchange, interest rates, etc. There is something for everyone.
  • Frequent publication (every three to seven days) of summary articles that contain important summaries on latest market developments, along with upcoming events to watch for.

    How the Investopedia Chart Advisor Can Help.

    Assume a trader is exploring commodity trading and wants to build upon a trading model around that asset class. At the early stage, the novice trader may not be fully aware of impacting factors due to their limited trading exposure and information, which can lead to loopholes in their trading models such as not factoring in seasonal pattern impacts applicable to certain commodities (crops, oil, food, etc.). For example, warmer winters may hit oil prices due to a decline in heating demand or people may consume less meat during rainy seasons, leading to decline in livestock prices, etc.

    Within the Chart Advisor sections, one can explore articles like How to Trade Livestock Rising Prices which not only cover these important aspects of assets to be traded, but also introduce multiple trading strategies with current charts, graphs, and indicators on how to spot and capitalize on the profitable opportunities. When finalizing models, traders can now account for these impacting factors by clubbing the temperature data while researching oil stocks, discounting for rainy days for livestock research, etc.

    Links within the article offer details on related commodities, such as Pork Trading, Beef Trading, Meat Trading and generic Food Stocks Trading strategies. These articles facilitate the building a trading strategy for trader, who may like to trade a specific food commodity like beef. He can base his trades on the recommended technical indicators, or simply build a portfolio of food stocks or food specific funds or ETFs for a mid- to long-term investment. Which trading model to choose, which strategy or technical indicator will fit well, and which assets it applies to remains the decision of the trader. However, these articles provide the required insights necessary to build the model.

    Another example of how Chart Advisor can help is in navigating Federal Reserve decisions. Say market expectations are that the Federal Reserve Bank will raise interest rates in near future. With increasing rates, stock market is usually expected to go down. Beyond this general perception, there are other important factors and questions worth considering, especially for beginners:  

    • Is there a way to benefit from trading on this news? Are there any rate-sensitive stocks, funds, indexes, or futures where one can take long or short positions?
    • Will taking a position in bonds or other fixed income securities be more beneficial compared to stocks?
    • What other associated data points need to be considered (housing sales, employment, gross domestic product or other associated numbers)?
    • How are domestic and international stock markets reacting to this news?
    • What are the other events to look out for in near future linked to this news, assuming I take a position?
    • Can I build a trade strategy based on a technical indicator based on this news? Which technical indicators on which stocks will enable profitable opportunities?

    The weekly summary article “Charts To Watch As Fed Raises Rates” provides all necessary information, trends, and technical indicators (including RSI and MACD levels for selected stocks and funds fitting this trade scenario), enabling the traders to conceptualize and build a trading model to fit their needs. The article efficiently captures the recent declared figures of inflation and housing data, and movement of global indices together with technical indicators like RSI and MACD. 

    The Bottom Line:

    Investopedia offers wealth of information across multiple sections and categories. The Chart Advisor section is aimed at assisting timely trading decisions by providing all the critical details novice and experienced traders alike need.