Forex trading is much more than placing trades and making a profit. It involves 24/5 market watch, chart analysis, identifying opportunities, order execution, risk management, leverage management, lot size, pip calculations, and much more.
Real forex traders know the hustle of managing so many things at a time. Thus in this article, we will discuss the best forex trading tools that can simplify and transform your journey. So stay tuned.
What are forex tools?
Forex Trading tools are technology-based resources that assist traders in automating complex day-to-day trading tasks.
Trading in the currency market requires knowledge of many theoretical and practical concepts. A beginner or novice trader may not have a clear idea of these calculations.
Even advanced and professional traders don’t have time to conduct these complex yet important calculations themselves. Therefore, using tools is a necessity and not a choice for forex traders.
10 Forex Trading Tools for Beginners
Numerous paid and free forex trading tools are available in the market. However, newbies may struggle to identify what tools to use and how. But not to worry. Here are the best forex trading tools with all the details to help you out:
Currency Strength Meter
Trading is about predicting the rise and fall of the currencies in the market. To identify the right currency pair, you need to check the strength of the currency. Individually checking each currency and comparing it with others takes a lot of time.
So here, you can use a currency strength meter. It is a tool that shows currencies’ strengths and weaknesses in graphical representation. You can check the data for currencies at different dates and time frames. You can find these tools on Meta Trader 4 or Meta Trader 5 or search for them online.
Forex Margin Calculator
Margin is the most critical concept of forex, and it involves complex calculations. Traders can lose entire capital if the margin call hits. So, determining the margin is essential to protect the capital.
Margin calculations involve understanding concepts like leverage, free margin, used margin, margin level, and margin call. Here, you can seek the help of a margin calculator. Enter currency pair, leverage ratio, volume, and account currency, and the tools will calculate the margin for you.
Pip Calculator
Pip is the most crucial yet confusing forex concept that helps you to calculate profit or loss. Traders with years of experience also struggle to calculate forex pips. So, for novice pips’ calculation is quite challenging, and in such cases, they can go for a pip calculator.
Generally, forex brokers provide you with this software. Traders just need to enter deposit currency, currency pair, exchange rate, and trade size to calculate pips value on these platforms.
A quick glance
Forex Trading tools are resources based on technology that assist traders in automating complex day-to-day trading tasks.
- Currency Strength Meter
- Pip Calculator
- Forex Profit Calculator
- Forex Position Sizing Calculator
- Forex Live Chart
- Forex Trading Simulator
- Economic Calendar Forex Tool
- Forex Margin Calculator
- Forex Leverage Calculator
- Risk on/risk off meter
A currency strength meter is a tool that shows currencies’ strengths and weaknesses in graphical representation. You can check the data for different currencies at different dates and time frames.
The risk on/risk off meter, popularly known as RORO, is used to measure risk appetite. It provides valuable insight that can help to develop risk perceptions.
Forex Profit Calculator
A profit calculator determines your expected profit from a trade. Knowing the reward amount before entering the trade is essential for setting the take profit level.
Generally, profit calculation is simple; however, lot size makes the calculation. In such cases, you can go for forex profit calculators. Enter currency pair, open price, close price, lot size, period, account currency, and position type, and you will get the profit amount.
Forex Position Sizing Calculator
The Positing Sizing calculator is a tool that determines the trade position in units or lots. It helps manage your risk and execute the trade accordingly.
Like the other forex tools, you can find this calculator on any website or forex broker platform. The platform generally asks for currency pair, account currency, risk to reward, pips, and trade size to calculate trade positions.
Forex Live Chart
Charts are the most important technical analysis tool for forex. It represents the price movement of the currency pair over different time frames. Bar, Line, and candlestick are popular types of charts.
Traders can identify potential trading opportunities in the market by watching the chart. They can access historical price data, opening, closing, and high and low prices. In addition, they can customize the charts in settings, select the indicators, use trend lines, and many other features. Trading View, Forex Live, Investing.com, and Daily Fx are popular platforms for accessing charts.
Forex Trading Simulator
The simulator is a way to learn trading before diving into the real market. The forex tool replicates live market conditions to help traders practically understand complex trading concepts.
You can try a range of strategies, pairs, leverage, and risk-to-reward ratios using it. Also, both paid and free forex simulators are available on Meta Trader 4 or any reputable broker platform. So you can choose the one that best suits your needs and pocket.
Forex Leverage Calculator
Leverage is popularly known as a double-edged sword in the financial market. You can open a big trade position with small capital by using leverage. However, high or unrealistic leverage can blow your entire account.
Leverage calculations help you manage risk and money. So, search for a leverage calculator online, find a website, enter trade information, and get your leverage ratio. Generally, a tool may ask for currency pair, deposit currency, margin, lot size, and exchange rate to calculate leverage.
Risk on/risk off meter
The risk on/risk off meter, popularly known as RORO, is used to measure risk appetite. It provides valuable insight that can help you develop risk perceptions. The tool measures risk on a scale of 0 to 100, where zero represents risk off while 100 represents the maximum risk.
You can access the risk of different currency pairs during various time frames. The tool helps the trader make trade decisions according to their risk-taking capacity and use capital efficiently.
Economic Calendar Forex Tool
The economic calendar is among the most important forex analysis tools. Economic events, announcements, and speeches significantly impact currency’s value.
Keeping track of fundamental events can be challenging as many things are happening globally. The economic calendar will give you an early update on global economic events with date, time, importance, previous data, and expected data.
In addition, traders can also learn what the events are, their impact, and which pair or currency they will impact. You can access economic calendars on financial news or education sites like Investing.com, Trading View, and FX Street.
Wrapping Up
We have discussed all the major forex trading tools in this list. Most of these tools are available for free and are simple to use. If you are not using them even after that, it is a big mistake.
Trading tools can save you a lot of time, increase the overall speed, and give you accurate results. In the beginning, learning and using them efficiently might take time. However, once you master the execution, the process becomes so smooth.
As we have studied above, there are numerous tools in the forex market. The hustle of searching for different tools on different platforms is real. Therefore, to help you out, we have integrated all the above tools into our platform. Market Investopedia is a single destination where you can get all the Forex tools on one platform.