The trading tools you need to have by your side
Just like in any profession, you need certain tools to trade effectively in forex. For instance, a plumber without channel locks and a pipe wrench, it would be hard to complete the task assigned to him. For a moment, think of trading without any tool while analyzing the market. What will be the outcome of your trading? Will such trading be successful? Your thought will be as good as any professional trader.
If you want to trade the market in a better manner, there are important tools every trader has to use. Further in this piece, we will look at some of the tools that are essential for your trading journey. Neglecting anyone is at your detriment. So let's move further and explore these tools.
Innovative Trading Tools for Traders to Choose
With many complicated trading software and instruments, it is a crime if you don't use anyone, especially if you are a newbie. Of course, having them in your MetaTrader 4 gives you an upper edge. However, you won't find all of these in your trading platform. We will show you where to get access to these tools and fine-tune your trading.
Financial News
The fundamental analysts take advantage of financial news events to trade the forex market. It is much more than reading through the Yellow Pages because such information can be limited. However, staying in touch with the latest and most trusted news outlets allows you to trade the news.
The idea behind using financial news as a tool in trading is to be aware of the interest rate of different countries since it is vital to its currency valuation. With financial news, you can track political and economic situations through various countries while monitoring their current currency values. There are several sources to get this financial news; here are a few of these trusted outlets.
MarketWatch
Bloomberg
Reuters
Financial Times
The Wall Street Journal
Furthermore, you can leverage RSS feeds to stay updated on important news.
Economic Calendar
It doesn't stop in getting the financial news; you need a place where to arrange this information. Here is where the economic calendar comes to play. The concept is to have a place where you can get your data very fast and easy. Data here represents a lot of things, including economic statements, central bank interest rates, geopolitical events, major economic releases, etc.
To make it easier, the economic events have a different color to indicate their impact on a currency pair. For instance, orange signifies news with high impact, whereas green is a moderate release with low impact. You can react faster when trading when you have an economic calendar. An economic calendar helps you filter any event and stay alert to upcoming events.
Calculators
For new traders, calculating pips can be a daunting task. From currency pips and margin calculators to profit calculations, you have access to various software that allows you to calculate your risk. Most forex brokers don't have some of these tools, but they are available at some.
For a beginner, here are a few calculators you can use when trading.
Pip calculator - The pip calculator allows you to calculate the pip value of the currency pair you choose to trade.
Volatility calculator - The volatility calculator uses historical interest rate movement while adapting it to a real-time condition. With this, you can manage your risk.
Profit calculator - A useful tool for calculating your profit or loss when trading a particular pair
Margin calculator - A useful tool that calculates the required margin along with the percentage and currency amount needed to keep your position open.
Trading Journal
Trading requires you to analyze, track, report, and evaluate the market. As a trader, you will not figure out what happens to each trade if you don't have a detailed report or record. Keeping track of your trade is the easiest means of learning how to trade like professionals.
Keeping a trading journal gives you an insight into every trade to take. You have to record your entry, exit, and why the trade got to a loss or profit. With this, you can know what works and doesn't work. You can examine your mistakes and avoid them when trading next time. Your trading journal can be a spreadsheet, a paper journal, or take advantage of online software to keep track of your trade.
Time Zone Converters
Our last tool today is the time zone converter that keeps you tuned to different overlapping trading sessions. The tool allows you to know when one trading session is closing, and another is opening. Time zone is a key factor that you should not neglect. Trading centers in Sydney, Tokyo, New York, and London overlap with each other, but you can take advantage of this tool to trade the market with precision.
Summary
Trading should be a wonderful adventure if you know the right tools to use. You will suffer like a farmer who decides to leave his tractor and use his hands to clear his farm.
Importantly, you don't have to spend money to get these tools, unlike your tractor that requires maintenance and purchasing cost.
This article was submitted by LegacyFX.
