Accessing and entering the lucrative forex market has become a lot easier due to the advancement in technology. But surviving in the volatile currency market and attaining success as a forex trader, in the long run, is not as easy as it seems to be from the outside. You must be prepared to face all the challenges head-on and gather some hands-on experience with conscious efforts. Preparing for anything requires knowledge, skills and the right set of tools to enhance your skills. Forex trading is also not an exception; hence, this write-up will give you a precise and sought-after checklist covering all the essential tools that can help you conquer the market as a new trader.
#1. Software with Charting Tools
As you may already know, technical analysis of the markets using charts has become an inseparable part of forex trading. Those who rely more on fundamental analysis will also need to look at the price charts to determine the perfect entry and exit points for trading. In fact, you won’t be able to spot ideal trade setups for your trading plan or strategy without constantly monitoring the charts. Hence, the first essential tool that should be there in your trader’s toolkit is charting software or trading software with advanced charting tools.
Japanese candlestick charts have become the standard chart type used by forex traders as it is the most detail-oriented and comprehensive type of chart. Therefore, most trading softwares and charting softwares offer you this chart type along with the traditional bar charts and line charts. So, take your time to find the right software solution for technical analysis by choosing the one with comprehensive and customisable charting tools.
You also need to pay attention to the timeframes for analysis, technical indicators and graphics objects available, as these tools are key requirements for performing technical analysis with at most perfection. The usage of the right charting tools adds a professional touch to your trading, allowing you to upgrade your trading skills from beginner level to pro level over time.
2. An Online or Offline Trading Journal
Most think of a journal as a personal diary to record our daily lives, and a trading journal is pretty much the same for a trader. But one thing about trading journals is that it functions as a tool for learning and improving your skills and performance as a trader. A newbie trader is bound to make some mistakes as a part of the learning process, and when you have a detailed record of all your trades and techniques, you are much more likely to spot and correct your mistakes.
Basically, a trading journal can be a point of reference to look back on your trades and review the same for finding your flaws as a trader. The key to becoming a successful trader is about correcting your mistakes in time and getting better at what you do. Being a lifelong learner is essential to become a skilled trader. So, you must add a trading journal to your toolkit, which can either be a personal diary where you write manually or an online journal which records your trades in a systematic manner.
An online journal would be better, in my opinion, as it takes less effort and time for maintenance if you are not much of a book person. One small tip I can give you for journaling your trades is always to include the logic or reasoning you applied for justifying these trades, as professional traders should never fall into their emotions and strive to be rational in every situation.
3. Online Trading Calculators
Calculations are an integral part of forex trading, and you cannot simply trade without proper calculation, as doing so will become gambling in a real sense. Professional traders will always take their time to perform trade-related calculations with at most precision. But attaining this level of precision with manual calculation is kind of a tough task for an average beginner. That is why we recommend using online trading calculators, automated tools specially designed for doing such calculations at high speed and accuracy. Many forex trading platforms and brokers provide these calculators for free, and you can surely consider adding them to your toolkit to make trading easier for yourself.
- Forex Profit Calculator – The name says it all a forex profit calculator calculates potential trading results as profits or losses, allowing you to adjust your entry and exit levels for better results and risk management. A Forex profit calculator is a powerful tool that can aid you in making sound trading decisions. So, you should definitely take some time to explore and use this tool to maximise your profit potential.
- Forex Margin Calculator – One of the key highlights of currency trading is the ability to trade with high leverage, which gives us greater profit potential with smaller capital. But when we trade with leverage, we must be careful about assessing the margin requirements in advance, as insufficient margin or account balance will lead to automatic exits from trades. So, you should look for tools that can help you easily calculate your margin before every trade.
- Forex Pip Calculator- The price movements of currency pairs are the foundation of forex trading, as favourable price changes allow us to earn profits. The unit used to measure these price fluctuations is Price Interest Point or Pips in short. Hence a Forex pip calculator is yet another essential tool that should have a place in your trader’s toolkit. So, finding the ideal tool for pip calculations is crucial for every forex trader.
- Currency Converter – This one is a basic tool, but again it performs an important function by simply helping you convert one currency into another. A currency converter saves a great amount of time you will have to spend keeping track of real-time exchange rates and manually doing currency conversion.
4. Leverage VPS for Enhanced Forex Trading Experience: A (Virtual Private Server) VPS for Forex can be a valuable tool to help traders conquer the market. By offering uninterrupted, high-speed, and secure access to trading platforms and resources, VPS ensures the timely execution of trades, minimizes latency, and allows for smoother, more effective trading strategies. For example, TradingFXVPS employs advanced security measures to protect your data and trading activities. This includes regular backups, firewalls, and secures access controls. This technology also enables traders to run automated trading systems 24/7, even in the absence of a physical connection, ensuring opportunities are not missed and helping to stay ahead in the competitive Forex market. Furthermore, VPS systems are often located near major financial hubs, reducing execution times and enhancing the competitive edge, giving traders a better chance to succeed in the Forex market.
5. Forex Signals/copy Trading
Those who are new to forex often struggle to find their own ideas for trading, and spotting ideal trade setups is not that easy when you don’t have enough experience in trading. Forex signals services can come to your rescue in such a scenario. We are not talking about typical forex signal services but about an advanced form of signals which is popularly known as copy trading. Copy trading can be a great start for a newbie trader as they get to follow the footsteps of another trader who is rich with skills, experience and already has a profitable trading system generating good returns.
Replicating their trades gives you a better chance in the volatile markets; hence, you can surely consider trying it. You can explore this innovative tool by going on a copy trading platform which has an auto-copying feature enabling you to follow and copy top traders of your choice. Just make sure they have a transparent system, as being able to see accurate data about the leading traders is essential for choosing the best ones for yourself.
6. Forex Time Zone Converters
One of the key attractions of the forex market is that it runs 24/5 as the market remains open all the time except on the weekends. There are 4 major trading sessions divided on the basis of time zones, which makes the market equally accessible for traders from all parts of the world. All of us can find the best trading sessions for ourselves, irrespective of our location. But when you want to trade in a different trading session that contrasts with your own time zone, you should definitely use the Forex time zone converter tool.
These time zone converts show the time of major trading sessions converted into your local time. This way, you won’t miss any major trading session, and it even tells you about session overlaps which are considered to be the best time for trading due to the high trade volume and liquidity. You can easily find some efficient Forex time zone converters online, and using them is pretty easy once you choose your local time zone.
Bottom Line
So, these are the 5 essential tools that can help you conquer the forex market by making the trading experience less complex and more seamless. You just need to add these to your Forex trading checklist and take your time to tick them off before getting into live trading. These tools can support you as a trader, and that actually takes you closer to attaining profitability and consistency in your trading venture. But remember that the true potential of a trading tool will only be unlocked when you learn to use it in the best possible manner, which starts with systematic studying and practice.