How the Right Tools Can Help You Make Smarter Forex Trades

How the Right Tools Can Help You Make Smarter Forex Trades
How the Right Tools Can Help You Make Smarter Forex Trades. Image source: Pixabay

Sometimes, even the most experienced forex trader needs a little help lightening the load. It’s a cut-throat market that hinges on making the right calls at exactly the right time. While a few purists may prefer scouring exchange rates and online brokers manually, these relics of the past aren’t going to be turning anything close to a sizable profit. In an age where anybody can become a forex trader, it’s less about industry insights and more about using the right tools.

Have you just gotten started with forex trading? Perhaps you’ve been hammering away for a while, but have yet to realise any substantial profits. In either case, there’s never been a better time to add a few tools to your online trading arsenal.

Why Are Trading Tools So Important?

Before you spend a small fortune on cutting-edge trading tools, you first need to understand why they’re so vital to success. The best tools offer exhaustive analytics of both trading values and general market trends. By turning to this data, making smarter decisions becomes second nature. Any sensible trader needs to be hyper-vigilant. While a bad of trading won’t derail your trading career, sustained losses can put you in the red. With the right tools, you’ll be able to get a handle on risk management.

Some tools can be automated, allowing you to close trades whenever the market is moving in the wrong direction. Automation also allows you to explore more market options. If you’ve been sticking to the same currency pair for months because of low volatility, automated systems can be used to monitor the market for new opportunities. Once you’ve decided which pairs to trade on, you’re free to kick back and let these automated tools take care of everyday tasks.

Some people are naturally resistant to assigning too much responsibility to a machine. However, a significant benefit of automated trading tools is that emotional judgement is removed from the equation entirely. Have you ever let superstition guide your hand when making a trade? Once you embrace automation, these ill-judged decisions become a thing of the past.

The Forex Trading Tools You Should Be Using

Now we’ve gleaned the benefits of forex trading tools, let’s take a look at some of the most useful in detail:

Virtual Private Servers

Are you keen to keep trading around the clock? You’ll need a virtual private server (VPS) at the very least. They’re essentially remote servers that allow you to continue trading, even when you’re away from the computer. What’s more, they provide an invaluable contingency in the event your broadband connection runs into trouble or your machine stops responding. When you are online, they allow you to make faster trading decisions, while you’ll be able to access your trading activity from anywhere, provided you’ve got access to a reliable internet connection.

Charting Software

If you’re a forex novice and struggling to make sense of basic concepts, visualisation can help flatten the learning curve. One of the easiest ways to visualise forex trading is by using charting software. Even basic software provides you with a clear oversight of market trends, monitor movements, and identify the most lucrative trading opportunities. MetaTrader 4 is one of the favourites from the user base for its simple but effective interface.

Automated Trading Tools

An automated trading system can carry out trades without any supervision. However, you’re not signing away your trading capital to a machine entirely. Firstly, you’ll need to establish a trading strategy. This can include an exhaustive set of rules that need to be fulfilled before a trade is executed. Most trading software includes default strategies you can use, but you should also be able to create a bespoke one.

Once you’ve taken care of that, you’ll need to convert your trading strategy into a workable computer program. Otherwise known as algorithm coding, it can be a complex task if you’re a complete novice when it comes to programming languages. If you don’t fancy the idea of brushing up on some coding know-how, it’s best to bring in the services of someone who knows what they’re doing.

Next, you’ll need to choose a suitable trading platform. Bear in mind that some platforms don’t allow automated trading. Make sure you’re selecting one that can actually facilitate the algorithm you’ve spent so much time creating. Your algorithm may prove to be a success. Others may be a disaster. Continual testing will let you know what’s working and what isn’t, allowing you to make refinements along the way. Finally, you’ll have a workable algorithm that performs well in practice. Now that it’s fit for purpose, you’re ready to use it for live trading.

Start Maximising Your Forex Profits Today

Not every forex trader’s toolkit is going to look the same. Some rely on charting software to visualise market trends, while others like to manually gather their insights from many different sources. Some traders favour full automation, while others like to have a more active role in how trades are executed. While turning a profit is far more likely when you’re using the right tools, you need to take some time to find out which tools are the best fit for you.