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Trading in the forex exchange market can be a difficult process even for the most senior of traders. Even though forex is, in general, a quite stationary market, shifts and fluctuations could emerge, a reason for which savvy participants augment their decision-making skills and overall activity by using several forex tools. Whether you are a rookie who is looking to break into the market, or a veteran who wants to obtain an edge over everybody else, this article will help you find the best forex tools out there. Here are the tools of the unusually skilled forex trader.
Forex Time Zone Converter
The forex market operates in a 24-hour cycle, so if you are a full-time trader, there is always a scene open for you. The first market to open is Europe, followed by New York, Sidney and Tokyo, with the mention that London opens again before the Japanese market is preparing to shut its doors. Obviously, each of these markets operate in different time zones. But the business hours of these key trading nods occasionally overlap – for instance, the Sydney market opens on a Sunday at 5 PM New York time, and closes on Friday at 5 pm New York time.
Another thing that is worth mentioning is the fact that the markets tend the overlap when the markets are at their most active and liquid, which could open the floodgates to some pretty interesting pairing tactics. Therefore, you will need a forex time zone converter to catch those windows when overlapping markets provide traders with the best trading opportunities.
Forex Volatility Calculator
One of the things that will influence your trading success the most is market volatility. Some currencies are naturally profitable or unprofitable, while others might experience an occasional rise in value.
Regardless, calculating volatility is no easy task, reason for which leaving it to programs and A.I. is a much wiser decision than doing it manually. A forex volatility calculator draws information from various sources, calculating historical exchange rates and volatility.
A reliable forex volatility calculator will break down a currency’s volatility in various time windows, from minutes to months. This helps traders determine if the volatility of the currency is ‘’normal’’ or if it is a mere passing anomaly. Moreover, it will also calculate, in real time, how a currency pair might evolve by taking into account factors related both to technical and fundamental analysis (interest rates, inflation, policy shifts, and so on and so forth).
Market Analysis Tool
Every serious forex trader needs a ‘’terminal’’ type of tool that supports multitasking. Market analysis tools, such as Meta Trader 4, increases efficiency by merging functionalities from several forex tools into a single one. The Meta Trader 4 Multiterminal, for example, is designed, from the ground up, with multitasking traders in mind. It allows traders to place market and pending orders, check market prices live as they are evolving, and monitor account balances. On top of all that, it supports all of these actions simultaneously, from an unlimited number of trading accounts, with no performance issues whatsoever.
Economic News Calendar Tool
One of the most important tools (especially to people who prefer fundamental analysis over the others) is the economic news calendar tool. The calendar provides traders with relevant data related to the future market consensus, economic outcomes, geopolitical events that have a direct impact on the forex market, central bank states, policy changes, elections and so on and so forth.
As we have said before, the economic news calendar is a great tool for fundamental analysts. The economic calendars, as well as the information posted there, is typically provided by forex brokers, financial experts and news websites. Many economic calendars show indicators such as the unemployment rate, the gross domestic product, inflation rates (for the Big Eight) and other relevant data that may influence currency values one way or the other. Furthermore, the data (structured in ‘’types of releases’’) will be sorted by impact – significant, medium and light.
Pip Calculator Tool
Even if you are a veteran forex trader, working with amounts expressed in foreign currencies can be overwhelming, especially if one has not fully internalized how the pip system works. Put simply, a ‘’pip’’ is the lowest possible trading unit for two paired currencies. A pip’s worth depends on the base currency and the counter currency that it has been paired with.
A pip currency calculator is a useful tool that helps traders calculate the value of a pip based on their position – long or short -, as well as its size, in their local currency. Using a pip calculator is simple. One only has to type in the details of their position (currency pair, amount of currency in account, the size of the trade), and other additional details related to the leverage and position size. The pip calculator will, in turn, automatically calculate the pip value of each position according to the currency the trader has chosen.
While there are many other useful tools out there, these are the ones that you will see skilled forex traders using. Whether you are a forex veteran or you are just getting ready to break into the market, you will need to use several tools to perform tasks that are otherwise difficult to pull off manually. Make sure to read through our selection and try out these tools if you are interested.