Tools for the Independent Investor

After a 50-plus year lifetime of independent investing, I can honestly say that I have been there and done that. I personally designed the electronic brokerage system that soon became the #1-rated system in Canada, beating out the platforms of all the major banks and brokers, and was #1 for nine straight years. As an investment banker, I financed and introduced as the first customer a real-time trade information system that transformed capital markets trading in Canada. Along the way, I used many types of systems from manual charting to sophisticated electronic algorithms for decision-making.

Today, as a Series-65 registered wealth manager in the U.S., there are just five third-party investor services, i.e., beyond the technologically advanced services provided by Interactive Brokers, that I use to do my work as an independent investor. I highly recommend them.

In order they are:

  5. (potentially)

Before using any service, the individual must decide if they are intending to day trade, long-term trade (in months to years), or something in between. The amount of capital being traded, and the frequency of trades factors into how you use these services and whether you need to purchase market data that is real-time, 20-minute delayed, or end-of-day data. For some people, there is a substantial cost of real-time data and unfortunately, that cost is repeated when you use it with more than one third-party service.

Of the many third-party services I use, most are free. At least they are free if you decide to accept the advertising that covers the cost of your using them. Importantly, free does not mean unworthy. In fact, I believe these services are essential.

The most important service, in my opinion, is StockCharts and it is not free unless you want to use only end-of-day data. Their basic version that gives only Daily, Weekly, and Monthly data charts, is free, which is acceptable only if you infrequently trade a small amount of capital. Most independent investors are day traders or swing traders, and they will need at the very least intraday charts with 20-minute delayed data, which has a cost. As stated, if real-time data is needed, the cost is higher. StockCharts also offers a pro-level service with features that appeal to some full-time traders.

As all these third-party services are in marketing competition, wanting your subscription, they offer a seemingly endless list of bells and whistles. I strongly recommend, however, that you keep it simple as the key to successful trading is the ability to focus, which is only possible if you avoid distractions.

Also, you must decide whether you are using a third-party service for investment research or for trading. I strongly recommend that you compartmentalize these functions. If not, I believe you will succumb to the problem of not understanding the difference between the noise of the market and the specific information you need. If you don’t work smart, you will spend endless and costly hours of processing noise in the form of the ubiquitous stream of marketing ideas and presentations. This is a battle for your mind that you win or lose depending on your self-discipline.

The simplest way to separate research from trading is to keep two lists: (i) your portfolio, and (ii) a watchlist or couple of watchlists. We all have unique needs. In my case, I try to restrict my portfolio to a list of 12 to 16 equities, and my watchlist to (i) the Cara 100 list, which I try to adjust quarter-yearly, which I study for possible trading consideration, and (ii) a small Special Situations list. In the Special Situations list, I keep former portfolio stocks that I may wish to buy again sometime, and a few others – perhaps 10 to 20 in total – that I allow a small group of associates to recommend.

I am always mindful that the bigger these lists, the more hours of work I require to stay in control. If I am not in control, then I am allowing the market to play me.

Of the four key third-party services I use, the least important – although it is important – is Seeking Alpha. I use SA for research in that I want to know what independent investors on the buy-side are writing about the stocks in my portfolio and in my watchlist, so I link them to my iPhone. From this steady stream of commentary as well as the community comments made at and whatever sell-side research I receive from broker-dealers, I try to filter out the noise from the points that I think might factor into my decision-making. Doing so requires strict discipline. It helps that I limit my research-oriented reading to just 20-25% of my time, and some of that is to publish my own commentary at It may interest you that part of the reason I blog is to help me stay focused on what is important to me, and part of that is simply to constantly improve my written communication skills.

Let’s look at the big three investment services I use apart from those provided by my electronic broker, Interactive Brokers (IB):

This service offers many chart periods, attributes, overlays, and technical indicators. I try to keep it simple. Repetitions are much more important than chart complexity. I use two computer systems and two 22-24” monitors each. The one computer is a powerful and fast desktop that enables me to have many open tabs with updating charts from StockCharts. The other computer is a big-screen laptop with an attached 24” monitor. I could use six monitors but for the fact that I am a battlefield strategist and not a sniper. Too much detail is overwhelming.

These systems are synced along with my iPhone. I could do the same with my iPad, but not being a techie I found too many devices caused too many technical problems. The laptop doesn’t crash with power failures and I can use it along with my iPhone when I am mobile, so this is the system I use for trading at IB and for use with,, and Seeking Alpha. I use the powerful desktop system for StockCharts and to a lesser extent for VectorVest.

For all my portfolio stocks, and for the open positions that I have at Trade Exchange, and a research group of six charts of stocks that trade on the London Exchange (5 hours earlier), I use split screens to maintain separate pages of charts for 10-minute, 60-minute, 4-hour, Daily and Weekly data, all of which I refresh every 60-seconds. I use 780 character-size charts so that the entire chart fits on the monitors thereby eliminating my need to scroll up and down. I am totally color-blind, so the other attributes do not much matter. There are many overlays, but as I need to keep it simple, I use only Pivot Points i.e., the system calculated support/resistance lines, which factor into my decision-making. There are about 50 possible Indicators, but again, simplicity is key to my trading focus, so I use four only: (i) I position behind the price True Strength Index (parameters 21,9,5), and the others are all below the price (ii) MACD (parameters 12,26,9) (iii) RSI 7 (iv) Coppock Curve (parameters 14,11,10) in that order top to bottom. Another feature of that I use are the percentage-based Point and Figure Alerts.

In another article or video, I will explain the routines I follow from start to finish of my day, and how I use these charts to make decisions. This is trade execution work and not research. For determining the companies I am prepared to invest in, whether it be for a few minutes, weeks, or months, I get my research from one of the other services.

Besides the charts that I use for blogging at, the service offers a helpful summary of the Buy and the Sell indications of multiple Technical Indicators and Moving Averages. Even though I do not make trade execution decisions based on content provided by, this is a phenomenal amount of trade-related research they offer you free. You can have these summaries automatically calculated for you and presented across eight different time frames, so whatever your time horizon for trading, they have you covered with what the technical indicators are saying. And they do it for every US-listed stock that interests you.

I also use FinViz extensively for research. I am most interested in their tabs for (i) stock performance of my portfolio holdings and of my watchlists, and (ii) news and articles published on these companies. But FinViz offers a lot more. In fact, FinViz offers so much value, it is a challenge to stick to what content you absolutely need to get from it and leave the rest.

For two decades or more, I have used the moniker Trader Wizard. I had copywritten it while trying to convince the Standard & Poor’s organization to insert a wizard in their data-ladened pages of data that I knew were overwhelming the average independent investor and many professionals as well. That deal never happened when the data group president quit and joined a competing service and his associate with whom I was doing the negotiating quit to join a company called VectorVest. At the time, I thought he had made an extreme career decision because VectorVest was to me simply an upstart technology in a black box that I would never allow to do my thinking and decision-making. But twenty-some years later, amidst the stream of promotion I was receiving from them, I decided, as I have for too many useless services, to see if there was true value to decision-makers like me.

After two months, I have a few things to say about VectorVest: (i) it offers a worthy service of rules-based information and various decision methodologies for different types of investors (ii) the canned reporting protocol they use each day to use their system to show you what happened that day in the market is basically a tool to reinforce your belief in their marketing that they offer a precise system that cannot be beaten. I also found that using the system is not intuitive so it is not easy to learn without spending a couple of months doing so, in which case most subscribers will end up using it as the black-box decision system I always thought it would be, and (iii) I do believe that their subscriber performance is likely to be superior in the marketplace, but nowhere near the cherry-picked daily examples that their employees point you to. Having said that, I use it daily and think it would be a valuable tool for most independent investors albeit one that could be vastly improved with effective user manuals. The cost is US$69, $89, or $129 USD per month depending on end-of-day or real-time data and the number of features. There is also a much more costly package for options trading that I may subscribe to. There are many reviews on the Internet that potential subscribers should read.

To sum up, there are a great many useful tools from third-party service companies. I have been using,, and Seeking Alpha for years, and in pretty much the same way. That works for me. I am new to VectorVest, and believe it will also help me. But I must finish with these words: while we can work smart, we also must work hard. No third-party service is a panacea for overcoming the constant challenges and making easy profits, and unfortunately, there are times when hard work still results in losses. That is the nature of capital markets. We must accept the downside if we are to obtain the upside.

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