Stock Pick Software

Written by Elise Allen
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Software applications have made many aspects of our lives easier. We can edit family photos and create digital photo albums with photo software. Budgets and taxes are a lot easier to complete with financial software. Software has dramatically increased the ability of investors to analyze and pick stocks. What used to require sifting through financial papers and annual reports can easily be accomplished on a desktop.

Software to Help with Stock Analysis

One main type of software program which can help investors is a screening program. A stock screening program will reduce the number of stocks to analyze from the thousands to single digits. Stock screens will include only companies which match the screening criteria. Having a minimum set of criteria for your stock picks will reduce the market to a manageable amount of stocks to study.

Stock screening software will typically work around a company's fundamentals. This is because a company's fundamental picture can easily be stored in a database. The screen searches the database for matching components and returns the results to the user. Ratios, such as price/earnings or price/earnings growth ratios are included in most stock screens. Don't eliminate a fast growing company with strong price performance simply because it has a high ratio. Supply and demand, not valuation, will determine a stock's price direction.

Advances in software technology have created a new breed of stock screening software. Stock screening software can now be used to identify chart patterns. Chart patterns show the psychology behind a stock's investors. Charts will show if a stock has excess supply or high demand. Similar to fundamental screens, chart screening software will only return companies whose stock price is trading in a certain chart pattern. Chart patterns can indicate when a stock is about to make a significant move.


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