Tools That You Should Use As A First Time Forex Trader

Trading forex for the very first time is a novel experience for every beginner. It can be tougher than you imagined it to be or you might be surprised by how simple it can get once you decode the concept of trading. Those who invest their time to learn about the currency market in detail will be able to deal with the challenges of trading in an efficient manner. There are several tools developed to assist traders and some of these tools are an inseparable part of the trading process. 

There are also some tools that you can add to your trader’s toolkit to enhance speed and accuracy. In this blog, you will get a list of tools that you should use as a first-time forex trader. 

The Role of Trading Tools in Forex

Forex trading is different from any other job or profession as you don’t really need any kind of qualification or specific educational background to participate in currency trading. But you should have the relevant skills and knowledge to make money from trading. You will be attempting to make profits by buying and selling currencies. The decision to buy or sell a currency is taken by analysing the market situation and anticipating potential price fluctuations as the exchange rates keep moving. 

There are a lot of tools that you need to use for accessing the decentralised market and carrying out analysis. You won’t be able to initiate the trading process without the essential tools at your disposal. So, the tools that you choose for trading forex play a key role in your performance and success as a forex trader. They help in enhancing your proficiency and being proficient is the first step towards profitability in forex.  

Best Forex Trading Tools

  • Forex Trading Platform

It is not possible to get started with trading without opening an account on a forex trading platform. A trading platform is a powerful software that lets you connect with the currency market and execute trades from anywhere and anytime on your system/ device with an internet connection. You also need to find a forex broker as they are the gateway to access the currency market and implement your strategy in solid trading conditions. The trading platform itself contains all the other tools that a trader needs and beginner-friendly platforms like MT4 would be perfect for first-time traders.  

  • Charting Software

Japanese candlestick charts are the most preferred chart type used by forex traders and you can also add some reliable indicators to the chart for getting valuable insights. You can customise the charts and also select suitable timeframes for analysis. Most trading platforms come with in-built charting tools that you can use for technical analysis. But you can also install advanced charting software to get more options to choose from.  

  • Forex Trading Calculators

Forex trading calculators are algorithm-based tools that perform all trade-related calculations on your behalf and provide accurate results within split seconds. There are different types of trading calculators to find different values needed for making trading decisions and they are available for free on different trading platforms.

  • Pip Calculator – A Pip calculator is a simple tool used for pip conversion. With this tool, you can calculate a specified number of pips for different currencies into your preferred currency. Pip can be considered as the basis of all trading activities that happen in the forex market. One pip is 0.0001 for all currency pairs but the pairs including Japanese Yen are different as for such pairs 0.01 is one pip. The currency price movements are so small that they are stated in decimals. 

Since different currencies have different values which keep constantly fluctuating, it was very difficult to measure and express the price changes with precision. Thus, Price Interest Point or Percentage In Point, which is abbreviated as pip became the standard unit to keep track of currency price movements. By knowing the accurate pip value, you can make informed trading decisions and manage your trades easily. 

  • Currency Converter – As you can guess from the name, a currency converter is a basic tool that converts an amount from one currency to another. This is not a calculator but it applies real-time exchange rates for currency conversion, saving your time and effort. Traders need to convert all the amounts, with paltforms such as USD to MXN, to their account base currency to make sound trading decisions and a currency converter is useful.
  • Margin Calculator – It is an important tool that you should use before opening a position. It tells you the amount of funds that have to be kept in your account for opening a trade and keeping it running. A Forex margin calculator tells you the required margin once you enter your trade size, leverage ratio and currency pair being traded. 
  • Profit Calculator – A forex profit calculator will give you the details of gains in the base currency of your account. If you have opened multiple positions in a day, then using a profit calculator, you can calculate the overall profit or loss that you have made in the currency of your choice. This tool will come in handy especially when you are maintaining a journal, as you will exactly know how much you have made.
  • Economic Calendar

Since the forex market and currency rates can be impacted by a number of global economic events and key economic data releases, you need to stay updated about them while trading. The tool that can help you in this is an economic calendar that tells you the date and time of Central Bank meetings, economic data releases and more along with a forecast about how it will affect different currency pairs. 

  • Tools For Learning 

One tool that all traders can use for learning is a forex demo account which allows you to practise freely without worrying about losses. Apart from this, there are many other tools that you can depend on for educating yourself about the currency market and trading techniques. There are a lot of forex forums and platforms, where you can get reliable information and interact with other traders. 

  • Social Trader Tools

The last tool I want to add to this list is for those beginners who want to make some profits while they are still learning to trade. By joining social trading and copy trading platforms, you can simply copy an expert trader and benefit from their expertise without trading by yourself.

Conclusion

With that, I am concluding this list of tools that you should use as a first time forex trader. One thing to keep in mind while selecting your trading tools is that you don’t need a ton of tools to get the results you want and using a limited number of reliable tools would be the best approach for a beginner.

    • Benjamin Roberts

    Benjamin Roberts is a finance professional and investment advisor, offering practical advice, strategies, and insights to help readers achieve their financial goals and secure their future.

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    Navigating the financial world with a less-than-perfect credit score can often feel like a daunting task. Many people face this challenge, wondering whether they could ever qualify for the financial products they need. Fortunately, there are low credit score loans available, providing a much-needed lifeline for those looking to get back on their financial feet without being judged solely by their credit history.

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    Benefits of Low Credit Score Loans

    One of the immediate benefits of low credit score loans is accessibility. These loans give individuals the chance to access necessary funds without rigorous credit requirements. They provide a viable solution for various needs, including unexpected expenses, medical emergencies, or consolidating higher-interest debt.

    Furthermore, these loans offer an opportunity to rebuild one’s credit score. By making consistent, on-time payments, borrowers can demonstrate financial responsibility, which could gradually improve their credit profile.

    Considerations Before Taking a Loan

    While low credit score loans offer solutions, it’s essential to consider several factors before committing to one. Interest rates on these loans are typically higher due to the higher risk lenders take on. It’s crucial to compare offers from different lenders, considering not just the interest rates but also fees and terms.

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    Are you considering selling your business but wondering how long it would take if you hire a business broker? Business sales vary in turnover depending on several factors. You need to factor in the type and size of the business as well as things like marketing, negotiations, and other legalities involved in a business sale. However, based on other business sales, we can work out an average turnaround time for business sales through a broker.

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    There are several factors that will affect how long your business will take to sell, like:

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    Businesses in a popular industry tend to sell faster than those in a niche industry. The popularity of an industry depends largely on consumer trends. For example, the racket sport Padel has taken the world by storm recently, attracting a lot of attention, which would make a padel business sale attractive to potential buyers. Typically, businesses in a more popular industry will attract more attention.

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    Secondly, you need to consider current market conditions. For example, during a recession, businesses might need to sell based on sustainability, but the selling conditions wouldn’t be profitable. Likewise, if the markets are down, the number of investors available to purchase a business might be limited, meaning that your business would be on the market for longer. Market conditions play a significant role in how long a business takes to sell.

    Then there’s how you market your business. Typically, a business broker would focus on creating and implementing a marketing plan for your business. The extent to which this plan is successful will determine how long your business will take to sell. A good marketing plan would attract the right buyers sooner.

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    Think about how you process buying goods in a store. If you see that the goods are overpriced, do you still buy them? If they’re the only goods, you might, but if there are cheaper alternatives of the same quality, then probably not. A similar concept applies to selling a business. If your business is overpriced and you’re unwilling to negotiate, it’ll likely be on the market for longer. Likewise, if it’s too cheap, it may send the wrong message to potential buyers who might think there’s an issue with it. Pricing your business appropriately will help the sale move along faster.

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    Consider what other businesses are in the industry, too. If you’re selling a business that’s in a saturated industry, it may deter potential buyers. That said, if you’re competing and doing so well, this may also work in your favour. Nevertheless, competition also factors into how long a business sale takes.

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    When you’re selling your business, potential buyers are going to undoubtedly ask you why you’re selling. If your reasons for selling are because the business is underperforming and you market at a higher price to cover your losses, potential buyers might see through your motives and avoid buying.

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