Forex trading takes place in a very volatile environment, so it becomes important for traders to use the best trading tools, in order to make the right speculations. These tools provide real-time data and statistics for the traders to make informed choices, which is while going in or coming out of trade orders.
There are thousands of websites providing a variety of trading tools, which is why many new traders may find it confusing to make choices. They are simply overwhelmed with the sheer number of tools that are available at their disposal. In this post, we have listed out some important trading tools, to make your choices easier.
- Calculators & computing tools
With currency pairs being available in dozens, computing their volatility becomes manually hard. Volatility calculator calculates volatility of an array of currency pairs, using their historical data, up to more than one year.
If you aim to trade on more than one currency pair, then currency correlation needs to be calculated.
Time zone converter
London, New York, Sydney, and Tokyo are main trading centers for Forex. Traders who do not reside in these cities, have to keep track of different time zones. It is because, each of these markets have their own set of session timings, and the overlapping hours generally create trading opportunities.
Traders need to keep a watch on scheduled financial reports, which may affect the Forex market. Economic Calendar is MUST-have tool for every FX traders.
Position size calculator
For safe trading, it is necessary to calculate the risk per trade. In FX trading, you need to consider the price of base and quote prices of the currency pair, you wish to trade on. Position size calculator computes the analogous position size, and presents the result breakdown in mini, micro, and standard lots.
Pivot point calculators
Calculated pivot points value serves as support & resistance limit. These figures evaluate the tone of every trading session.
- Technical analysis tools
Charts are vital for traders to define the trends, identify the suitable exits and entry points, and also to look for exchange rate patterns. Technical analysts use charts to look for best trading opportunities.
Common charts are –
- Line chart – Helps to get an instant visualization of the direction, in which the current prices are moving.
- Open High Low Close (OHLC) chart – You get four types of information here, the opening and closing prices, as well as price closed lower or higher than open.
- Candle chart – Information obtained from Candle chart and OHLC charts is similar, but the former provides more visuals, and includes a body in the shape of hollow (close is high) and filled (close is low). There is a thin line over the body, referred as Shadows, which are just the low and high prices.
- Forex courses
Some fantastic courses are available for free online, which can help beginners to get started. Even the experienced traders can join those courses for improving their basics.
- Forex news
Many free sources of FX news are available online, but these are not just sufficient, because a minute or seconds delay can dramatically affect your profit or loss. You can subscribe for newsletters with reliable Forex broker platforms, so that you get real time alerts, current market information, trade ideas, and order price levels.
If you wish to invest your career in Forex trading, then you will need to get educated on how to use these tools, instead of depending only on tips, gut feelings, or trading signal service.