Wednesday, January 16, 2013

Wondering what stock to trade? Use a heat map!

Seeing what's going on in the financial markets around the world in about five seconds? It's possible with a heat map! Basically one of the most useful tools in trading is using a heat map. It gives you an overview of where the 'action' is right away. There are plenty of heat map websites out there but by far I found finviz.com (Financial Visualizations) the best heat map for stocks, etfs and - yes - even forex, and best of all; it's free. There's no need to buy an expensive trading platform to see this one.
How does a stock trading heat map work you wonder? Simple. A heat map for stocks will show you instantly live the best performing (bright green is +3% stocks, bright red is -3%, and everything in between) visually shown on a 'map', for example like the world map below;

Actual world heat map taken at this time of writing. Click for a larger version.
As you can see, the heat map shows the best to worst performing stocks from around the world. I personally think that Finviz is the best free heat map for stocks because it also allows you to see the best or worst performers of the S&P 500 (shown below) without having to jump through a lot of hoops and registrations. It's clear and it simply looks good.

Heat map of the S&P 500. Click for a larger image.
You can also do a heat map in 3D, Bubbles and more. Brilliant! There are also options for forex, commodities, futures and more. What do you mean you can't come up with anything to trade? Use a heat map and see instantly where the action is. Below you can see a futures heat map along with the horizontal performance bar chart.



Keep in mind that the data shown on the heat maps from finviz.com is delayed. The Elite version ($39.50 a month or $299.50 a year) will provide us with RealTime data, as well as pre-market data, advanced charts, back tests, correlations and alerts. Did I get hired by these guys to write this blog post? Absolutely not (although I should). I just know a helpful trading tool when I see one and thought it would be nice to share!
Also keep in mind that this is one of many trading tools you may need to apply to make your final entry trade with real money and cannot simply make a trade based on this website alone.

If anyone knows a better heat map website, tell me, I'd like to check it out.
For now you can check finviz.com's heat map.

Happy trading!





Disclaimer:

All opinions expressed, trade recommendations/advice on this website are solely of John van der Munnik and are not affiliated with any investment firm or any other organization. You should not make an investment only based using this website VDM Trading for your trading needs without seeking help from your own financial advisor.