Your performance as a forex trader can be greatly improved when you use the correct tools during analysis. These tools can guide you to make the best decisions that can protect you from losses and enhance your chances of making profits.
This article includes insights into five of the best tools for forex analysis, as well as the forex rules to keep in mind when using these guides.
Why Forex Rules are Important When Using Trading Tools
Forex rules provide the guardrails for using trading tools for analysis the right way. These rules include not only valuing the importance of these tools and the roles they play in trading success, but also underpin that having strategies for trading are vital when acting as a trader.
Top Analysis Tools for Forex Traders
1. Trading platforms
Some of the leading trading platforms for forex analysis include MetaTrader 4 and MetaTrader 5 from MetaQuotes. What makes these tools so powerful is they provide real-time data and charts, technical analysis tools and automated trading systems that can be accessed from one place, making it easy to dig deep into market analytics.
2. Economic Calendar
An economic calendar is a powerful indicator of key points in time. It captures vital data which could impact currency pairs when they are released. Also, central bank policy statements, and relevant geopolitical events that can impact the forex market are some other pieces of information that this calendar can provide, together with GDP and inflation numbers.
3. Pip Calculator
A pip (which is an abbreviation for a percentage in point or price interest point) is the smallest whole unit price movement that an exchange rate can make.
When using a pip calculator, several factors will be taken into account, such as the scope of your trading position, which currency pair you are trading and the exchange rate, as well as your leverage.
The pip calculator will take these values and work out what a pip in your account is worth. It can also inform you of both risks and rewards related to trade.
4. Financial News Wire
Staying up to date with financial news in real-time is another key tool for forex analysis. More than just news bursts, these information sources could impact exchange rates and the forex market. Therefore, it is vital to stay up to date with these news wires to make better trading decisions.
5. Forex Volatility Calculator
This calculator uses historical exchange rate data for a currency pair. It determines the historical volatility in real-time for a specific period. The value it provides for you as a forex trader is that you are better equipped to gauge the risk involved in trading a specific currency pair by reviewing past market behaviours.
Wrapping Up
Trading tools allow you to optimise your trading experience. They provide guidance for you to manage typical trader risks, which can greatly impact whether you achieve success or not in the forex market landscape. These tools can be used whether you are just starting as a trader or have had some experience in the forex market.
