The Forex market has several unique features and an understanding of the best Forex trading tools will improve your trade. Forex trading tools will assist traders, whether novice or experienced by augmenting their decision-making skills. These tools facilitate and devise profitable entry and exit points.
Brokers or forex trading platforms give access to forex trading tools free of cost. Traders can also subscribe to these tools by paying for the service. Apart from these, numerous websites specializing in the forex market and financial news also offer free forex trading software. The most popular trading software can be found in popular online trading platforms like MetaTrader 4, offering an extensive package of technical indicators and trade automation abilities.
This article will provide you with details about the most popular forex trading tools that are used in forex trading:
1. Economic News Calendar Tool
This tool furnishes traders with future market consensus and beforehand outcomes for pivotal economic data and pertinent geopolitical events. The tool also lists the timing of central bank policy statements, monetary policy-maker speeches, and elections. This tool is of special significance for fundamental analysis, as it typically involves future fundamental economic releases that will impact the valuation of a country’s currency. This tool helps to quickly and easily access data, like:
- Central Bank interest rates
- Major economic releases
- Geopolitical events
- Economic statements and more
2. Financial News Wire
The direction of exchange rates can be significantly affected by the news. This tool provides traders with access to information that can affect the forex market. Numerous financial publications such as financial newswires and newspapers namely, Wall Street Journal, MarketWatch, Bloomberg, Financial Times, and other online resources broadcast economic news. Some of the common economic news that can affect the value of a country’s currency are:
- Reports of the speeches
- Official press conferences
- The economic and political situation of the relevant country
- International interest rates
Keeping an eye on the development taking place in the world market can benefit in understanding its impact on the forex market.
3. Time Zone Converter
Trading hours can make a big difference while trading certain specific currency pairs, so it is vital for traders to know those times in their local time zones. This tool helps traders know when the trading session opens or closes down in the popular forex centers across the globe as well as benchmark releases and geopolitical events. It assists technical traders with the exact release time.
4. Forex Volatility Calculator
This tool takes the historical exchange rate of a currency pair and determines the historical volatility in real time for distinct time frames. It gives traders an indication of the risk involved in trading that particular currency pair. This tool saves a lot of time in calculating the next move and includes margin, pip, profit, and volatility calculators as well as currency converters.
5. Charting Software
Charts are the most important thing in the arsenal of a trader when we talk about forex trading. Charts assist traders in tracking market performance patterns, examining the history of any currency, and analyzing the market in real-time. This forex tool also includes other technical indicators as well as trading signals which are beneficial for successful forex trading.
6. Copy Trading Services
This is a recent development in the trading industry. It allows traders to copy successful trades of other experienced traders and implement the same method for grappling the market. It facilitates the automatic copying of trades of successful traders. Though the trade won’t be identical but will be scaled to suit traders’ risk preferences and other settings. Copy/social trading services qualify as forex trading tools and greatly enhance the trading experience of, especially novice traders.
7. Trading Platforms
In today’s scenario, trading platforms incorporate various technical analyses as well as a real-time market data feed. The real-time market data feed showing asset prices is directly displayed on the charting interface, and traders can place trades directly off the displayed charts. Dashboards of the trading platforms are fully customizable and allow traders to set their trading preferences. They also have a financial feed that assists traders in making the next move in their trade. Therefore, advanced trading platforms are providing traders with numerous features for analyzing the forex market in real time.
8. Trading Journal
This is an important tool for novice traders who are at the learning stage in forex trading. When traders start trading forex, they will have a lot of trades in a short duration of time and it becomes difficult to remember all the details of every trade. The trading journal provides a platform where traders can write all their trades and keep track of them. This tool gives them valuable insights into their winning and losing trades. It helps in refining trade by letting traders learn from their mistakes and examining ways to avoid those mistakes in the future.
Takeaway
It can be challenging to consistently and profitably trade in forex, and retailers tend to lose their money in trades. With an extensive trading plan, definite trading tools, and adequate knowledge about the currency market, the probability of success increases for a forex trader.
