If you’re new to the global forex market, it’s all too easy to become overwhelmed by the jargon used and the array of technical indicators available online.
This is why a deterministic mindset is so crucial to traders, as this enables them to plot their way through a volatile marketplace and make more informed decisions over time.
Similarly, traders can also utilise a select range of tools to ensure that they invest wisely in the forex market. We’ve outlined some of the best and most effective tools below.
#1. The MetaTrader 4 or 5 Platforms
Let’s start with the basics; as you’ll need a viable and licensed trading platform if you’re to organise and execute real-time trades.
Two of the best options are the MetaTrader 4 and 5, which were released within five years of each other and remain universally popular amongst novice and experienced investors alike.
While the MetaTrader 5 is considered to be the more comprehensive platform, its predecessor has a far greater focus on forex trading and provides a select range of more relevant indicators and analytical tools.
The choice is ultimately yours, but you’ll definitely need to identify the best platform to suit your needs (and one that’s compatible with your forex broker).
#2. A Trading Journal
While it may sound a little trite, a trading journal can be an excellent tool for investors who want to continually develop and learn from their activities.
In simple terms, you’ll record every trade that you make in the forex market, highlighting the level of investment, leverageand its eventual outcome in terms of profit or loss.
Over time, you can keep a detailed record of your successes and failures, while potentially identifying key patterns that can help to inform your trades going forward.
#3. Forex Calculators
In truth, there are various calculators that you can use when trading forex, depending on your outlook and investor and your overarching strategy.
For example, those who want to leverage the market’s volatile nature to their advantage should utilise a volatility calculator, in order to track historic price shifts and determine potential moves in the future.
You can also use this tool to see how currency pairs react to specific events and data releases, which may provide far greater insight in the future.
Another key tool is a pip calculator, which helps you to determine position sizes in relation to individual currencies. A pip is the smallest unit of movement in the exchange rate, so this type of tool allows you to operate with far greater accuracy over time.
