The right tools in Forex trading depend solely on your money management methods as well as your trading style. For instance, if you are a day trader, the right tools for you are chart patterns and technical indicators. But if you are a trend trader, you will need moving averages and long-term charts to build-up your positions. Here are some of the most sought-after trading tools in the Forex market.
Meta-Trader 4 and Meta-Trader 5
These two are trading platforms that use tools and expert advisor (EA) software for automation in your trading and to generate important trading signals. Meta-Traders offers its users some real-time functionality in trading, charting tools, and technical analysis.
It can help you keep accurate records of your Forex trades, which could help you see valuable insights. As you make entries to your Trade Journal, you may include an explanation as to the reason for your every trades, the signals that were used when creating the trade, and the result of the trade.
There are different calculators used in Forex trade but the best ones are the currency pip, profit calculators, volatility calculator, and margin calculator. Most of the time, these calculators are being offered on your broker’s platform.
- Volatility Calculator – it determines the history of volatility on the currency pair you chose to trade, real-time.
- Currency Pip Calculator – it determines the pips based on the size of the position in your local currency.
- Margin Calculator – helps compute the margin percentage, required margin, and the currency amount.
- Profit Calculator – it determines the loss or profit of a trading position.
- Currency Converter – it helps traders compute the value of one currency co-related to one another.
Correlation is the changes in the exchange rate from one pair to another. Whilst, the set of correlations on currency pair results in the correlation matrix. Most of the time, there is a strong correlation between currency pairs because of their common counter.
Time Zone Calendar
Time Zones can affect your Forex trading especially if the time of two countries greatly overlaps from one another. Because of that, using the Time Zone Calendar can offer some great help in determining the best time to trade.
Financial News Wire
Using this tool keeps you updated when it comes to news events related to the financial market. some of the news that can affect the currency rate are the national elections, geopolitical events, and other major economic releases.
It lists all-important economic releases, national elections, interest rates from the central bank, policy statement, and even speeches by the bank officials at the central bank. All these things affect the value of major currencies and therefore, an important factor in your trading.
Furthermore, economic calendars not just provide lists of events but also states how it can affect the Forex market.
There are a lot of trading tools in the Forex market that you can use to boost your experience and chances of gaining profit. Nonetheless, your Forex broker must have a variety of trading tools for you to choose from.