Tools to use in forex trading
Forex trading can be overwhelming for beginners without the right knowledge and trading strategies. But with the use of trading tools, life would be easier, and you stand a chance to make more money. Trading Tools come handy if you want to analyze the market and set parameters for continuous profits.
In this post, we would be taking a look at the top 7 trading tools you should leverage in 2020. These tools have been tested and are very accurate when it comes to analyzing the forex market.
Below is a list of the trading tools we would be talking about much later in the article:
- MetaTrader 4 and MetaTrader 5
- Trade Journal
- Calculators: Currency pip, volatility, margin, profit, and currency converter
- Correlation Matrix
- Time Zone Converter
- Financial Newswire
- Economic Calendar
#1. MetaTrader4 and MetaTrader5
These forex trading platforms feature several trading tools that you can leverage to develop Expert Advisor (EA) and also generate trading signals to automate your trading. A reliable platform to find MetaTrader4 is www.legacyfx.com. MT4 offers deep technical analysis and real-time functionality, plus robust charting tools. That's not all; it has a customizable interface. The user community is so huge that they have gone ahead to develop several add-ons to make the platform user-friendly.
#2. Trade Journal
A trading journal is another powerful tool you need to have in your trading arsenal if you want to be successful. As a newbie, keeping an accurate record of your trades could be a nightmare, in addition to taking note of the signals that were used to achieve continuous profits. This is precisely where a trade journal becomes handy. Entering your trading strategies in a journal will enable you to know exactly what mistakes you have made and the steps to correct such errors in the future. You can make use of a spreadsheet journal, paper journal, as well as a trade journal service online.
#3 Calculators
There are several Calculators for trading forex - volatility calculator, currency pip, profit calculator, and margin calculator. Let's take a look at each of these calculators.
Currency Pip Calculator
In forex trading, a pip is the smallest movement in the exchange rate of a currency pair. Using a pip calculator, you would be able to determine the pip amount in the local currency. Usually, the calculator will display the pip value of specific currency pairs. If you want, you can enter the position amount you prefer.
Volatility Calculator
This calculator makes use of the historical data of a currency pair to determine the volatility of that currency in real-time. It can determine the volatility of that currency pair from one week to as long as one year. In times of high volatility, you can use the calculator to reduce your position sizes to manage your risk.
Margin Calculator
In the forex market, a margin is a percentage required to open and maintain a specific position when trading. A margin calculator will help you to compute the required margin, currency amount, and margin percentage needed to hold a spot.
Profit Calculator
Do you want to determine your trading position's profit or loss? Then consider using a profit calculator. This calculator is very powerful, as it can evaluate both profit and loss at different levels of the exchange rate.
Currency Converter
A currency converter will help you to compute the value of one currency against another using the prevailing exchange rate. A currency converter will take an entered amount and convert the amount to the equivalent of the other money in real-time. This tool is handy, especially when you want to convert one currency to the other for position sizing.
#4. Correlation Matrix
Correlation is the change in the exchange rate of one currency pair against the difference in the exchange rate of another currency pair. A set of correlations makes a correlation Matrix.
A correlation matrix is a useful tool that provides a visual representation of the history of different trading pairs. It is expressed in correlation coefficient and has a value which ranges from -1 to +1.
#5. Time Zone Converter
Time zones can be the difference between your success or failure as a trader. Popular trading centers like New York, London, Sydney, Tokyo, and others differ in time zones and overlap in certain times of the day. The difference in time can cause a liquid market for specific currency pairs. A time zone converter will help you to determine the time in any of these popular trading centers.
#6. Financial News Wire
The evaluation of currencies takes into consideration Interest rates and economic numbers. That is why you see experts' traders listening to news 24/7. The information they get from news can mar or make your trading success. Whether you are a day or technical trader, you need to be aware of economic release times! This is where Financial News Wire comes in. This tool is quite helpful and should be integrated into your trading arsenal.
#7. Economic Calendar
Most expert traders you see, smiling to the bank, usually plan their trading week using an economic calendar. This tool lists all central bank Interest rates, major economic releases, policy statements, speeches by central bank officials, national elections, etc. that could affect major currency valuation.
Final Thoughts
There you have it. If you want to succeed in trading forex in 2020, you need to incorporate these trading tools into your trading system. And one good platform to get started is www.legacyfx.com. These tools will enhance your trading strategies, and ultimately, you will smile to the bank at the end of the day.
This article was submitted by LegacyFX.
