7 Useful Tools Every Forex Trader Needs14. April 2023
New forex traders want to equip themselves with the best tools on the market to get the maximum from their trading business. Even long-time traders constantly look for new tools to add to their existing set and keep them ahead of the game. We look at some of the latest and most valuable tools for every forex trader.
Modern forex trading platforms come with charting services that operate in real-time. For example, MetaTrader 4 and MetaTrader 5 have charting software included in the trading platforms, although there are some differences between the two. Before you begin, make sure you understand how each one works, as well as the pros and cons of both, so you can make a more informed decision.
An economic calendar can provide a forex trader with valuable data related to economic events that can impact a set of currencies when this becomes newsworthy. This is thus an essential tool for a forex trader to have. The types of data displayed include the gross domestic product of a country, inflation figures, employment statistics, and the dates when central banks have meetings.
Financial News Wire
Just as the data provided by economic calendars can suggest how the market between two currencies will perform, a financial news wire offers relevant news. By making certain impactful news items available promptly, a financial news wire gives forex traders an insight into factors that may impact forex trading choices.
A software version of a trade journal is available from many companies, although you can design your own trade journal on a spreadsheet. The purpose of a trade journal is to maintain a record of all your trades so that you can keep track of your wins and losses and analyze your choices. By analyzing your forex trading decisions, you can see where you are going wrong and improve your performance.
There are many good reasons for having a trade journal, such as:
- Understanding your style and determining its weaknesses and strengths,
- Bringing about consistency in trading rather than acting randomly,
- Holding yourself accountable for forex trading decisions,
- Determining your best forex strategies,
- Improving your trading plan. This constitutes the set of guidelines or rules you adhere to as part of your forex trading strategy and helps you manage your risk more effectively.
Some brokers provide their clients with a copy trading service. The novice forex trader can get the services of a more experienced trader who will replicate their forex trades in the beginner’s account. This allows the novice trader to make more wins than losses and to learn from observation.
Forex Volatility Calculator
Forex traders can use this tool to observe the historical risk of trading a particular currency pair. It provides the volatility for the pair in real-time across a set of time frames to show how volatile this currency pair has been at points in the past.
With the right tools, you can become a better, more successful forex trader.
Featured image credit: Pixabay
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