Technical Analysis is a field of finance in which trading decisions are based on measurable quantities, rather than the psychology of the trader. A 'technical' trader makes use of charts and indicators that derive from price and other data to decide when to buy or sell stock.
Technical analysis is also popular with amateur traders, as witnessed by the success of web sites like Yahoo! Finance. These sites include charts and indicators, in addition to data like price and volume. But how do you decide which indicators are most profitable? And how should you combine the available indicators into an effective trading strategy?
Trade Strategist is a tool designed to help you develop an effective trading strategy by utilizing the various indicators of Technical Analysis. A common problem faced by amateur traders is a lack of faith in their adopted trading approach. If you have traded yourself, you probably know the feeling: you see your stock plummeting in price, and even though you reason that it will rebound, you end up selling the bottom and swallowing a big loss. Your trading is being governed by your psychology, rather than by a rational, well-tested, and most-importantly, mechanical strategy.
What if you could see how effective a trading strategy was by testing it on historical data, before you begin to use it? That's what Trade Strategist is all about. You combine the indicators you find on financial web sites into formulas which trigger buy and sell signals. Trade Strategist takes your 'strategy', downloads historical data from the web for the stocks you would like to test, and runs through the data making virtual trades based on your strategy. Within a few seconds you can see how much you would have made or lost had you adopted the strategy. If it works well, you try it on other stocks; if it doesn't, you discard or improve it. It's a bit like paper trading at high speed!