When starting off as a forex trader, you will want to invest in the best forex trading software you can afford and get all the forex trading tools necessary to operate your trading business with.
Here’s our list of the 9 best forex tools:
Trading Platforms
Advanced trading platforms like MetaTrader 4 and MetaTrader 5 (MT4/5) by MetaQuotes let traders enter orders and offer many features for analyzing the forex market in real time.
Charting Software
Most advanced forex trading platforms provide real time charting services, although you can also obtain charting software elsewhere.
Economic Calendar
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.
Pip Calculator
A pip calculator takes into account the size of your trading position, the currency pair you are trading, the exchange rate, and the leverage you are using. By inputting these values into the calculator, it instantly calculates the value of one pip in your account currency.
A pip calculator is particularly useful because it helps traders determine the risk and reward potential of a trade. By knowing the value of a pip, traders can calculate their potential profit or loss based on their desired entry and exit levels.
Financial News Wire
News can significantly affect the direction of exchange rates. A premium financial news wire gives traders timely access to information that might affect the forex market.
Trade Journal
Keeping a trade journal gives you valuable insight into both your losing and winning trades. Some companies provide software designed just for this purpose.
Copy Trading Service
Copy trading involves selecting an experienced trader to duplicate their trades in your account. Some brokers like eToro offer this service.
Currency Correlation Matrix
Correlation measures how one currency pair’s exchange rate changes relative to the exchange rate of another currency pair. A set of correlations comprise a currency correlation matrix, which lets you visualize the interconnectedness of currency pair exchange rate movements.
Time Zone Converter
Certain trading sessions and times are better than others for trading specific currency pairs with respect to liquidity, volatility and trading volume, so knowing what those times are in your local time zone can be extremely important to forex traders.
Forex Volatility Calculator
A volatility calculator takes a currency pair’s historical exchange rate data and determines the historical volatility in real time for various different time frames. The historical volatility of a currency pair gives a trader an idea of the risk involved in trading that particular currency pair.
How Forex Trading Tools Help Create Trading Opportunities
The use of forex trading tools has become an essential aspect of modern-day trading. Technical analysis software, economic calendars, and risk management tools empower traders by providing them with critical information and allowing them to execute well-informed trades. By incorporating these tools into your trading strategies, you can increase your chances of identifying profitable opportunities and ultimately succeed in the forex market.
How to Choose the Best Forex Tools and Software
Charting software generally features a slew of technical indicators that can provide trading signals. Some forex trading software even lets you program and back test your strategies to determine how they performed historically.
Other trading platforms tend to have similar features, although the automation feature found on the MT4/5 software may not be available on them. You can program or purchase expert advisor software to automate your trading plan using MT4/5.
In addition, you can buy or subscribe to trading signal generators that are typically offered as a monthly service.
Ease of Use
Once you’ve opened a demo account with an online forex broker, and you’ve familiarized yourself with the trading platform, getting access to and using the various forex trading tools mentioned above shouldn’t be difficult.
If you decide on a broker that supports the MT4/5 trading platforms, then you should get access to the MT4 and 5 mobile trading app. The MT4/5 mobile trading app is one of the best forex trading mobile apps and offers many of the features available on the popular desktop version.
Accuracy
In normal markets, you can expect a high degree of accuracy from your forex tools as long as the exchange rate feeds they use are of a high quality. When the market heats up with increased trading volume and exchange rate swings, the accuracy of your software may be adversely affected.
Price
While many of the best forex trading tools can be accessed via popular trading platforms like MT4/5 or proprietary software offered by brokers to their clients, 3rd party providers will generally charge either a purchase price or a monthly fee depending on the services provided.
In addition to signals and indicators, many 3rd party services provide educational and research resources. The cost for 3rd party services can vary significantly. The cost for a service typically increases depending on the extra features provided.