What Are The Best 3 Forex Tools?
A professional cannot do without his tools. A carpenter can only make his products when his tools are sharp, a football player can only practice if his leather ball is of good quality, and a Forex trader makes big profits only by using the best ones. But what makes a good one? How can brokers know which one is right for them?
The key to a good Forex tool is to work well with others. They must work as a team. This is why we have found the three essential ones for the successful Forex trader, which not only work separately, but combine to form an unstoppable team.
Nowadays it is possible to download many tools for beginners for free. It doesn’t matter which technique you use algorithmic trading or whatever.
► A trading journal
► Reliable mapping software
► The economic calendar
Forex Tool 1: Prepare Your Journal
Just like athletes spend time reviewing their performance video after games or how important it is to calculate the performance of cryptocurrency mining like bitcoin, so you should spend time analysing the deals you have made.
You do this by noting each currency pair (real currencies or virtual currencies) that you have identified and each exchange that you have made. There are online journals that you can download, but we’ve found that nothing beats a good quality pen and paper.
It has been proven that taking handwritten notes helps you remember things better than hear or see them. Research shows that handwritten notes are even better than typing. If you want to have a digital copy of your journal, writing to Excel (or a free alternative to Excel) or to a Google sheet would work, but handwriting is always king.
Therefore, we recommend that you find a notebook and a pen and create a table for your exercises. Have sections devoted to the currency pair (dollar, yen, euro, bitcoin etc. …) that you trade, at the time of the day, at your point of fall, at the stop of your losses, at the exit markets and your results. Write down every deal you make. After a while, you will be able to see your trading trends. Use these trends to hone your skills.
Forex Tool 2: Reliable Mapping Software
Other than your broker, this is the most important one you can have. Good, reliable mapping software is shows you the in-depth aspects of trading in the forex market. These in-depth aspects are displayed by the indicators of your software. Indicators are advanced statistics and overlays that analyse different aspects of trading to give you an idea of the future of the market.
Forex Tool 3: An Economic Calendar
Forex is a very volatile market, which is what makes it great. However, there are times when the market is more volatile than others. The reasons are fundamental announcements. Fundamental announcements (or Funds ) are major events that shed light on a country’s economic situation. You can use the economic calendar to be informed and trade according to market conditions.
What is the Use of Forex Tools?
The use of visual Forex tools allows you to refer and make a relevant decision. These ones do not necessarily constitute guarantees of success in an operation but make it possible to orient the strategies. Thus, Forex professionals use these powerful ones to streamline their activities. Even if market behaviour is generally unpredictable, graphical visualisation of the movements of the various operations allows trends to be estimated.
Technical Analysis Tools
To evolve on the Forex without taking significant risks requires the control of the visual tools which facilitate the decision-making. Trading is based on the desirability of a sale or purchase at a specific time.
The updated tools allow you to use particularly useful information. The technical analysis is mainly based on mathematical projections and the study of market data to obtain a general appearance of motion as curves, bar charts and tables.
The display obtained generally results from cross-analyses of the different accounts and offers a fairly comprehensible summary for insiders.
Charts and Averages
The Kaji graphics are a synthetic translation of the courses. Reading the kaji graph includes the yang which shows the uptrends and the yin representing the downtrends.
The trader thus determines a limit designated as the turning point threshold. The graphs show variations greater than or equal to the turning point.
The moving average method is used to determine a trend. It consists of considering the existing prices for a given period and calculating a rolling average.
This tool is characterised by its ergonomics and is one of the most popular methods on the foreign exchange market.
Pivot Points and Macd
The pivot points are indicators that are available in different schools: those of Tom DeMark, Woodie and Fibonacci.
The calculation methods are different but the parameters to be entered are identical. The trader refers to the prices of the previous day and takes in chronological order the current price at the opening, the highest price, the lowest price and the price at the end of the day.
This tool makes it possible to determine the supports and the resistances. The moving average convergence divergence is the one that represents a curve obtained by calculating the exponential average.
This curve is called the signal line. The Macd represents the positive or negative difference between two exponential moving averages. The positive spread indicates a bullish situation for a currency pair and the negative spread indicates a bearish situation.
Tools Related to Fundamental Analysis
Fundamental analysis takes into account the economic context. Thus, the parameters to be studied are economic news, statistical data provided by companies as well as governments.
Common Tools
The Forex Dictionary is the most popular tool in Forex. It is particularly useful for French speakers since the majority of the terms used on Forex are in English.
The lexicon of Forex is treated in the dictionary which references the translated terms, the contexts and the expressions. By referring to the dictionary and translator, the novice trader can quickly master the lexicon of the foreign exchange market.
He will thus be able to better use the tools and analyse the financial information. The economic calendar provides information on economic or political events such as media interventions by major financiers and communications on central bank interest rates.
Innovative Tools
Real-time graphs show the evolution of the value of various currency pairs. The trader thus obtains a synthetic view in real time and can determine short-term movements.
The currency converter provides quick equivalence between different currencies. This application regularly updates the rates as well as the prices of different currencies.
The open book is a social network allowing traders to exchange information and tips. This network is a very useful tool for the novice trader who wishes to train.
By interacting with a community of traders, the novice investor will be able to expand his experience and assimilate new methods.