As a forex trader, there are many things which can make you successful on a consistent basis. These factors include risk management, knowledge, experience and maybe trading luck. However, the forex trading tools are also essential to the shape the profitability of the trader. You need a reliable source of the current trending news, and even a reliable charting tool to help you in making informed decisions. In this article, we will look at the top 5 trading tools which all forex traders should consider adding to their portfolio.
- Economic calendar
An economic calendar is an essential tool for price action and fundamental analysis. It consists of a detailed list of all the upcoming data releases as well as economic announcements for a certain period. A forex trader should stay well informed an updated of the currency news around the globe since forex trading an international l business. For instance, they will need to know news related to Japan and USA if they are trading a USD/JPY currency pair. Most economic calendars cannot be found on the broker platforms, but they are available on various websites and platforms in standardized forms.
- Reliable technology
You must have a constant connectivity of the internet if you are a full-time forex trader. Although you can still opt to analyze the charts from the offline platforms, reliable online connectivity will make the trading easy for you. This is because the forex transactions take place very fast and disappear from the internet quickly. You will, therefore, be able to secure the trades if you have a reliable broadband source of internet. A reliable technology will also ensure that you get the breaking news immediately when they are announced. Traders who use the road more often can choose to use several monitors’ setups to improve the efficiency of breaking the data. Before you purchase a smartphone or a PC, confirm its graphics as well as the internet coactivity.
- Charting software
You will be able to identify the right market sentiments and trends if you have excellent charting software. The charting you decide to use should have several variables which can be customized. It should also be easy to use and interpret, even if you are forex beginner. At the ideal starting point, the charting software you use should include several standard indicators. These could consist of RSI, MACD, volume and much more. It souls also include the trend studies such as the standard deviations, moving averages, and Bollinger bands.
- Demo account
The expected returns of a forex trader may not materialize as per the expectations if they don’t know how to combine them well. This is where the need for a practice or a demo account comes in. Although the tool does not directly contribute to making the profits, it helps in testing the trader’s skills so that they don’t make mistakes when they get into the live markets. The demo accounts are readily available, as many brokers give them for free. One advantage of the demo account is that you can also use it while still using another live account.
- Price alerts
Price alerts give signals of the most important currency pairs that you need to monitor. For instance, you get a notification when the options trading price drops or rises below a specific level. The price alerts are especially useful to the technical traders as they notify them on when to exit the market; when the transactions do favor them. The signals are generally sent to the trader’s email or text message. Some of them are free, while others need a subscription. Look for a reliable broker to help you chose the best.
A forex trader armed up with these tools together with others will undoubtedly make in the forex trading field. This is because all tools combined provide the services that forex traders require. However, the devices can work more actively if the investor’s posse’s excellent trading skills and has a well-implemented trading plan and strategies.