# Case: choose at most three tools

> Strip a crowded chart down to at most three tools, give each one a job, say what it cannot do, and defend the choice with the numbers.

- Course: [Trading Basics: How It Works, How Not to Lose Everything](https://productovi.com/courses/trading.md)
- Module: Which tools are worth my time?
- Lesson 24/32, ~39 min
- Source: https://productovi.com/courses/trading/choose-your-tools

## Nora's cockpit

**Alex Tutor:** Back on your Pebble practice account, today you clean up a chart. Nora has switched on every tool Pebble offers for Bluefin Energy, and she says she can't see the price any more.

**Nora:** Three averages, the momentum gauge, volume and a range line. More tools, more confirmation, right? But they never agree, and I freeze.

**Sofia:** What does freezing look like?

**Nora:** The 5-day line says up, the gauge says "too high", the volume bars say nothing. So I either do nothing or click something at random.

**Alex Tutor:** Doing nothing is fine. Clicking at random is the expensive part, because every click pays the spread and the commission.

**Alex Tutor:** First, Nora's belief itself. True or false?

> **Exercise:** Adding more tools to a chart adds more confirmation, so decisions get safer.

![Nora holds her head in front of a board crammed with tangled lines and bars, while Alex holds up a tidy screen with one line and Marc counts on his fingers.](https://productovi.com/courses/trading/diagrams/m6-l4-scene.png)

**Alex Tutor:** Here are her 60 days, 2026-03-30 to 2026-06-19, with every column she has on screen. Your job by the end: keep at most three tools and give each one a job.

**Dataset (CSV):** [Bluefin Energy, 60 days with Nora's tools](https://productovi.com/datasets/trading/choose-your-tools/m6_bfe_case.csv)

Practice market data on Pebble. Prices in dollars, volume in shares. The tools use the 20 days before 2026-03-30 too.

- `date`: Trading day
- `open`: Opening price
- `high`: Highest price
- `low`: Lowest price
- `close`: Closing price
- `volume`: Shares traded
- `ma5`: Average of the last 5 closes
- `ma10`: Average of the last 10 closes
- `ma20`: Average of the last 20 closes
- `gauge`: Momentum gauge, 0–100, share of the last 10 changes' movement that was up
- `avg_range10`: Average of high − low over the last 10 days

**Bluefin Energy, close and three averages**

| date | Close | 5-day average | 10-day average | 20-day average |
| --- | --- | --- | --- | --- |
| 2026-03-30 | 46.73 | 46.69 | 46.82 | 46.13 |
| 2026-03-31 | 45.86 | 46.37 | 46.8 | 46.17 |
| 2026-04-01 | 46.37 | 46.44 | 46.65 | 46.18 |
| 2026-04-02 | 46.03 | 46.46 | 46.52 | 46.2 |
| 2026-04-03 | 46.59 | 46.32 | 46.52 | 46.28 |
| 2026-04-06 | 46.5 | 46.27 | 46.48 | 46.34 |
| 2026-04-07 | 46.86 | 46.47 | 46.42 | 46.42 |
| 2026-04-08 | 48.92 | 46.98 | 46.71 | 46.6 |
| 2026-04-09 | 49.07 | 47.59 | 47.02 | 46.81 |
| 2026-04-10 | 48.91 | 48.05 | 47.18 | 46.97 |
| 2026-04-13 | 48.64 | 48.48 | 47.38 | 47.1 |
| 2026-04-14 | 49.2 | 48.95 | 47.71 | 47.25 |
| 2026-04-15 | 49.71 | 49.11 | 48.04 | 47.34 |
| 2026-04-16 | 49.77 | 49.25 | 48.42 | 47.47 |
| 2026-04-17 | 49.79 | 49.42 | 48.74 | 47.63 |
| 2026-04-20 | 50.7 | 49.83 | 49.16 | 47.82 |
| 2026-04-21 | 51.4 | 50.27 | 49.61 | 48.02 |
| 2026-04-22 | 51.44 | 50.62 | 49.86 | 48.29 |
| 2026-04-23 | 52.67 | 51.2 | 50.22 | 48.62 |
| 2026-04-24 | 53.08 | 51.86 | 50.64 | 48.91 |
| 2026-04-27 | 52.16 | 52.15 | 50.99 | 49.18 |
| 2026-04-28 | 51.23 | 52.12 | 51.2 | 49.45 |
| 2026-04-29 | 52.16 | 52.26 | 51.44 | 49.74 |
| 2026-04-30 | 51.18 | 51.96 | 51.58 | 50 |
| 2026-05-01 | 49.6 | 51.27 | 51.56 | 50.15 |
| 2026-05-04 | 49.22 | 50.68 | 51.41 | 50.29 |
| 2026-05-05 | 49.74 | 50.38 | 51.25 | 50.43 |
| 2026-05-06 | 50.25 | 50 | 51.13 | 50.5 |
| 2026-05-07 | 50.37 | 49.84 | 50.9 | 50.56 |
| 2026-05-08 | 51.44 | 50.2 | 50.74 | 50.69 |
| 2026-05-11 | 51.29 | 50.62 | 50.65 | 50.82 |
| 2026-05-12 | 53.37 | 51.34 | 50.86 | 51.03 |
| 2026-05-13 | 51.82 | 51.66 | 50.83 | 51.13 |
| 2026-05-14 | 51.03 | 51.79 | 50.81 | 51.2 |
| 2026-05-15 | 50.96 | 51.69 | 50.95 | 51.26 |
| 2026-05-18 | 53.23 | 52.08 | 51.35 | 51.38 |
| 2026-05-19 | 52.79 | 51.97 | 51.66 | 51.45 |
| 2026-05-20 | 51.2 | 51.84 | 51.75 | 51.44 |
| 2026-05-21 | 50.53 | 51.74 | 51.77 | 51.33 |
| 2026-05-22 | 52.55 | 52.06 | 51.88 | 51.31 |
| 2026-05-25 | 51.85 | 51.78 | 51.93 | 51.29 |
| 2026-05-26 | 52.07 | 51.64 | 51.8 | 51.33 |
| 2026-05-27 | 52.02 | 51.8 | 51.82 | 51.33 |
| 2026-05-28 | 52.04 | 52.11 | 51.92 | 51.37 |
| 2026-05-29 | 50.93 | 51.78 | 51.92 | 51.44 |
| 2026-06-01 | 50.99 | 51.61 | 51.7 | 51.52 |
| 2026-06-02 | 52.06 | 51.61 | 51.62 | 51.64 |
| 2026-06-03 | 50.9 | 51.38 | 51.59 | 51.67 |
| 2026-06-04 | 51.61 | 51.3 | 51.7 | 51.73 |
| 2026-06-05 | 52.27 | 51.57 | 51.67 | 51.78 |
| 2026-06-08 | 50.99 | 51.57 | 51.59 | 51.76 |
| 2026-06-09 | 49.81 | 51.12 | 51.36 | 51.58 |
| 2026-06-10 | 49.15 | 50.77 | 51.08 | 51.45 |
| 2026-06-11 | 49.57 | 50.36 | 50.83 | 51.38 |
| 2026-06-12 | 50.93 | 50.09 | 50.83 | 51.37 |
| 2026-06-15 | 50.39 | 49.97 | 50.77 | 51.23 |
| 2026-06-16 | 52.16 | 50.44 | 50.78 | 51.2 |
| 2026-06-17 | 51.74 | 50.96 | 50.86 | 51.23 |
| 2026-06-18 | 51.53 | 51.35 | 50.85 | 51.28 |
| 2026-06-19 | 51.72 | 51.51 | 50.8 | 51.24 |

**Marc:** I count jobs, not lines. What question does each tool answer? If two tools answer the same question, one of them is noise on the screen.

> **Exercise:** Match each tool with the question it can honestly answer.

## Three lines, one story

**Marc:** Notice that none of the four questions is "what happens next?". That one isn't on any tool's menu, however many you switch on.

**Alex Tutor:** Now the three averages. On 46 of the 60 days, the close sat on the same side of all three: above all of them or below all of them.

**Nora:** But the 5-day one is faster. Doesn't it warn earlier?

**Alex Tutor:** Over these 60 days the close crossed the 5-day average 14 times, the 10-day 15 times and the 20-day 16 times. In the sideways weeks from May, every one of them flipped back and forth.

> **Exercise:** On 46 of 60 days the close was on the same side of all three averages. What share of the days is that, in percent? Round to one decimal.

**Nora:** Three days out of four. So I was reading one line three times.

**Marc:** So I keep one average. Which length matters less than using it the same way every time, and only for the backdrop.

**Nora:** And the gauge? It said 70 or more on 14 days, mostly in April. I'd have sold on every one of them.

**Alex Tutor:** In April the close climbed from about 48.92 to 53.08 while the gauge sat high. It described the climb well and timed nothing. Keep it only if you want that description; it doesn't add a signal.

> **Exercise:** Which tools on Nora's chart mostly repeat each other? Choose all that apply.

**Alex Tutor:** Back to the gauge for a moment. Count what Nora would have missed in April.

> **Exercise:** Bluefin Energy's gauge first read 70 or more on 2026-04-08, with the close at 48.92. The close then climbed to 53.08 on 2026-04-24 while the gauge stayed high. By how many percent did the close rise? Round to one decimal.

## Sizing from the last row

**Alex Tutor:** Last row, 2026-06-19: close 51.72, 20-day average 51.24, gauge 47, average range 1.39. Which tool tells you how far a stop has to be?

> **Exercise:** Which of Nora's tools helps you decide how far away the stop should be?

**Sofia:** The range. Two usual ranges would be 2.78.

**Alex Tutor:** Good. Now turn that distance into a number of shares, with 97 dollars to risk.

> **Exercise:** On the last row the stop is two average ranges away: 2 × 1.39 = 2.78. With 97 dollars to risk after costs, how many Bluefin Energy shares can you buy? Round down.

**Marc:** And with 97 dollars to risk after costs, that's 97 ÷ 2.78, about 34.9, so 34 shares. The averages and the gauge can't tell you that.

**Nora:** Only 34 shares? That feels tiny.

**Marc:** It feels small because the share is jumpy. The dollars at risk are the same as on any other trade, and that's the number that matters.

**Alex Tutor:** Before Nora chooses, check one toolkit against another.

> **Exercise:** Which toolkit for Nora's chart gives every tool a different job?

**Nora:** Fine, fewer lines. But which three?

**Alex Tutor:** That's your call, as long as each tool has a different job and you can say what it can't do. Two good tools beat three. First a short warm-up, then the case.

**Sofia:** Short warm-up first, then.

> **Exercise:** Nora says: "More tools means more confirmation." On her chart the close sat on the same side of all three averages on 46 of 60 days, and the gauge read 70 or more on 14 days of the April climb. In 2–3 sentences, explain with these numbers why that isn't true.

**Alex Tutor:** Now the case. Use the facts and the last row; you don't need to recompute the averages.

**Nora:** And tell me what each tool can't do. I trust tools far too easily.

**Marc:** Write it so Nora could follow it on a bad day, when she's tired and the screen is flashing.

> **Exercise:** Strip Nora's chart down to at most three tools and defend the choice.

> **Key ideas**
>
> - Count jobs, not lines: each tool should answer a different question.
> - Three averages of the same closes agreed on 46 of 60 days and were crossed 14–16 times each: keep one, for the backdrop.
> - The gauge describes recent movement; it sat at 70+ on 14 days during a climb and timed nothing.
> - The average range sets the stop distance (2 × 1.39 = 2.78) and, with fixed dollar risk, the size (34 shares).
> - Fewer is better. No tool, alone or combined, forecasts the price.

> **Educational, not advice**
>
> This course explains how trading works; it never tells you what to buy or sell. Most people who trade lose money, and you can lose all of it. For taxes and rules, ask a licensed professional where you live.

- Previous lesson: [Volume and volatility](https://productovi.com/courses/trading/volume-and-volatility.md)
- Next lesson: [A one-page trading plan](https://productovi.com/courses/trading/one-page-plan.md)

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