The forex market is an incredibly volatile entity, and one that sees numerous price movements during each 24-hour trading period.
Much of the market’s volatility is underpinned by inflated leverage and the derivative nature of currency, which allows traders to open disproportionately large positions and profit directly from price movements even in a depreciating market.
To achieve success in the marketplace, however, you’ll need to rely on a suite of tools to trade forex over time. Here are some of the most effective and widely accessible tools:
The Economic News Calendar Tool
We’ll start with one of the most useful and popular tools for forex traders, which takes the form of an economic news calendar tool.
Essentially, this is a list that provides traders with the future market consensus, alongside previously released outcomes pertaining to key economic datasets and associated geopolitical events.
It also tends to list the timing of central bank policy statements (especially relating to interest rate movements), alongside monetary policy maker speeches and elections.
This tool is of particular use to fundamental analysts, while you’ll also find various iterations of the economic news calendar across a diverse range of trading platforms.
Free Online Trading Tools
You’ll definitely need a licensed and reputable trading platform if you’re to succeed in the digital age, as this will provide a one-stop shop through which you can analyse data, execute orders and manage your risk as an investor.
The great thing about these tools is that they’re completely free to access, apart from variable commission fees and charges that are applied by individual brokers.
A growing number of platforms are available on both desktop and mobile devices, enabling you to access the market at any time of the day or night. For example, you can trade through the MT4 web and mobile app, seamlessly accessing your account regardless of where you are or what device you’re using.
This type of platform also offers you access to a so-called “demo account”, which enables you to trade via a simulated and real-time market for a period of up to six months before trading for real.
Pip Calculators and Currency Convertors
There are numerous calculators used widely within the forex market, although it’s fair to say that some have a little more value than others.
Take pip calculators, for example, which enables traders to determine the precise amount each ‘pip’ is worth based on their size of a position in their local currency. A pip refers to the lowest trading unit for a chosen currency pair, with this varying depending on the identity of the base and counter currencies.
The pip per transaction is ultimately calculated in units, while it enables investors to make more informed and profitable decisions over time.
On a similar note, currency convertors are also viable forex trading tools, not least because they allow you to calculate real-time conversion rates for the full range of major and minor pairings.
Keen tech writer outside of my day job in I.T. and spending time with my family.