Forex trading is becoming the top pick among investors online and with increasing demand comes an extensive list of forex brokers with exciting new features and useful trading tools. With overwhelming amount of tools available today, how can you figure out what is essential and what is more of a gadget? Which tools can truly influence your decision and help in analyzing the market conditions?
Below is the list of what I consider to be the most important and necessary tools in currency exchange:
Forex Brokers and Trading Platforms Reviews
Take your time in choosing the platform because it will be your trading environment. Make sure to go for secure and regulated forex broker with protection from hack attacks and with security transactions.
Review the platform features with demo account. Try out smaller amounts and check for slippage, real-time quotes, charting capabilities, daily analysis, one click execution and hidden commission fees.
Do a background check on the Forex Broker of your choice – read Reviews, participate in forum discussions, find whether a physical address is listed on the broker’s website, try getting in touch with the representatives with all means of communication (phone, email, online chat).
Don’t you want to test drive a new car before you buy it? Why should forex be any different? Get a glance of what lays ahead.
Some traders consider demo account a waste of time. I think the opposite. A good demo account which exactly simulates live account with real live market rates is very useful for beginner. You can not only practice your strategies, but also become familiar with the platform features and capabilities.
Next up, we have a trading journal. This kind of a tool, while simple, is very important for traders, particularly when it comes to new traders who are still learning the ropes. The reason for this is that traders need to learn about their own trading habits.
Once you start trading forex, you will likely have a lot of trades in a relatively short amount of time. That will make it impossible for you to remember every detail of every trade, so the best thing you can do is write it down in a trading journal.
Time Zone Converter
The time zone converter is another one of the best Forex tools free of charge. This can be a very helpful tool for traders in several ways. Firstly, it allows market participants to keep track of opening and closing times of all of the major markets in the world. This can be useful for predicting the volatility of different currency pairs.
To make correct and effective decisions in forex, you need a well-presented graphical display of currency pair behavior and emerging trends. In order to see and analyze that you need top-notch charting software. Go over the charting functions and options in the platform of your choice and see if it is satisfactory.
Many forex brokers provide daily fundamental and technical analysis of the forex market. Not all of them are good, though. Choose a broker that makes useful daily analysis which is beneficial for your trading experience. Use the expert knowledge to make profitable decisions.
Forex Volatility Tools
A forex volatility tool shows how much a currency pair typically moves. A trader may want to look at average daily movement over 30 days, for example. The tool can show how much the pair typically moves each hour of the day, how volatile it is on a certain day of the week, or how its volatility has changed over time.
These tools provide insight into what can be expected on a particular day or at a particular hour. This information helps the trader assess whether a trade has a good chance of reaching a profit target.
A volatility tool can't tell the trader which direction the price will go, but it does indicate how much the price might move.
Forex Trading Social Networks and Social Trading
In order to be on top of things, you have to socialize with others. Whether you join forums or trading social networks, you will definitely benefit from communication with other traders. Talking to others allows you to review and rate services, confirm your ideas and predictions, discuss trading strategies and seek help from people with the same set of interests.
An economic calendar lists the time and date of important economic data that can affect currency pairs when released. The data includes employment and inflation numbers, gross domestic product (GDP) and central bank meeting dates.
The agenda of forex is not only to make money, but to keep your trading account safe. Losing is a common practice, however there are ways to lose. One way is to do it recklessly and clear up your trading account within seconds. Other is to exercise discipline and risk management techniques in order to protect your capital and minimize the negative outcome.
No matter which tools and features attract you, make sure that you have the above checklist under your belt. Create a safe and enjoyable trading environment. With consistency and trading plan, your success is in your hands.