5 Useful Tools for Aspiring Forex Traders
Forex trading isn’t easy. If it was, we’d all be super rich from speculating on the global currency markets. The main problem is that forex markets are very volatile. With more than $5 trillion traded each day, it pays to have some FX tools close at hand. Using FX tools won’t guarantee success, but they will lower your risk by helping you make more informed decisions.
photo/ Gerd Altmann
Forex Signals
Forex signals can maximise your gains and give you valuable insights into the global currency markets. Explaining the ins and outs of FX signals is beyond the scope of this article, so if you would like to learn more, check out this resource on forex signals and how to use them. In summary, though, FX signals are useful alerts designed to learn more about trading, which is why they are invaluable for novice forex traders.
eToro
eToro is an innovative social trading platform. You can set up an account on eToro and trade in all the major markets, including currencies, stocks, and shares, commodities, ETFs, etc. What makes eToro different, however, is that you can follow experienced traders and copy their trades. This is known as ‘Copy Trading’. It doesn’t guarantee you success, but it’s a useful learning tool if you are new to forex trading. Popular traders earn money from having lots of followers, so if you become successful, you may end up with your own followers in eToro.
Forex Calendar
The Forex Calendar is a free tool for forex traders. It lists upcoming economic events, influential news events, and other economic news releases. Calendar values are updated shortly after an event. All experienced traders use Forex Calendars as a way of tracking upcoming events that could influence the forex markets. For example, US NFP releases are very influential, so it is sensible to have this date marked on your calendar if you are a forex trader.
Forex News Outlets
Knowledge is power. The more informed you are about political and economic events, the easier it will be to predict market movements. Bloomberg and Marketwatch are useful FX news outlets, but there are many more. News aggregator sites pull all the key news stories on to one website, which is handy if you don’t have time to browse many news sites. Make a point of being informed about FX news events and you don’t be caught on the hop.
Volatility Tools
The global currency markets are extremely volatile but there are often discernible patterns in market movements. A volatility tool can analyse market movements and provide useful insights for traders. This helps you decide whether a proposed trade has a good chance of moving in the right direction, as well as how far. It’s not fool-proof, but it does give you more confidence that you’re making the right decision. There are lots of volatility tools, but Oanda has a useful Value at Risk Calculator that looks at price movements.
Start trading using a demo account and get to know the various tools at your disposal. They make life much easier!
Author: Madhusree Das
