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Following is the shopping-list for an investor who wants to start his/her TA based investing:
1. Charting Software:
This is the 'engine' that drives the TA.
There any lots of software packages available. Starting from virtually free to those costing 1000s of dollars. For Mutual Fund investing, for a small investor, it is sufficient to have a package costing around $100 to $500. The two leading packages are SuperCharts (by Omega) and MetaStock (by Equis). (One more package is Windows on Wall Street.) A DOS based package, FastTrack, is custom made for the Mutual Funds and is popular among the chartists doing Mutual Fund investing.
There are some 'entry-level' programs available, which are IMO sufficient to get one's feet wet. Wall Street Analyst Delux is one such program (around $50) and Windows on Wall Street Personal Edition (also around $50). Wall Street Analyst Delux is By Omega. It is not as powerful as SuperCharts, but it has many features which are very useful at that price !
2. Data feed for the Charting Software:
This is the 'gas' J for the TA 'engine' !
There perhaps are a few frugal (and I don't use the word 'frugal' as criticism at all) investors, who can input the data manually to the Charting Software, but quite seriously I won't recommend it. The process of such inputting is bound to become tedious and combersome. And will take the fun away from TA. The datafeed prices are under $25, for the Mutual Fund data and Index data. Several services offer data which are compatible with many different Charting Software packages. (An investor should of course check if the software s/he is planning to buy is compatible with the datafeed s/he is planning to buy. I'll recommend that one should do the shopping by considering the software and data as a single component evenif they are available as seperate items.) The Dial Data offers various deals based on the type of data feed required. It is compatible with SuperCharts, MetaStock and Windows on Wall Street. The Signal offers data feed as well as news. The DOS based package I mentioned before, FastTrack, in fact comes as Software + Data package. Yet another Software + Data service is TC2000.
3. Broker:
And this is the 'chauffeur' J !!
The best broker that I've found so far, is the Fidelity. Fidelity Fund Family offers the SELECT funds which are concentrated Sector Fund and which are priced and may be traded every hour. These funds are available thru Fidelity Brokerage. The other good brokerages are Waterhouse and Jack White. (By year end, merger of Waterhouse and Jack White will be complete.) Another excellent brokerage is by Scudder. This brokerage offers something that's not available in any other brokerage which is the availability of the no load funds from the big three - Fidelity, Vanguard and T Rowe Price on no-load and no-transaction fees basis - provided you open and maintain the brokerage account with the minimum assets of $100,000. Overall an investor should choose the brokerage based on the availability of his/her choice of funds on preferably no-transaction basis. Other points to consider are the availability of inertnet-trading, trade-cut-off times, rules regarding the minimum-holding period and the penalty if funds are traded within the minimum holding period. Trading Charges are important if one plans to use transaction fees funds and/or stocks. (Then there are other points that go with the brokers such as - Checkwriting, News Services, Bill Payment, Local Branches, Debit/Credit cards, ..... )
(06/24/99) I've mentioned above that Fidelity Brokerage is the best I've found. When I wrote the essay, that was true. Since then a lot has changed. And now, I'll not call Fidelity the best broker !)
4. TA related books and publications:
(By now I'm sure you must have guessed how I plan to complete the metaphor) These are the 'maps' !!
This is going to be the most difficult part. There are many excellent books available. To start with I'll recommend "The Visual Investor by John Murphy" and "Technical Analysis Explained by Martin J. Pring". As for the publications, I recommend "Technical Analysis of Stocks and Commodities" and "Mutual Funds Magazine".
Wish you a happy, safe and profitable journey ...