Top 20 Forex Trading Tools To Try In 2024
Being well-equipped with the right tools is the key to unlocking success in forex trading as a beginner. The forex market has a trading volume of $7.5 Trillion per day, and you need to possess enough knowledge and skills to make profits. Using the most appropriate forex trading tools based on your trading style and strategy can make the trading process smoother and easier. Some of these forex tools are an essential and inseparable part of trading in the forex market. But many of these tools are also optional; traders must choose them based on their descriptions and preferences.
We are here to help you out in this selection process of finding the best tools to make your trading easy. We will be sharing a sought-after list of the top forex trading tools, so let’s begin without any further ado:
Top Forex Trading Tools Of 2024
– Trading Software
We are starting our list of best forex trading tools with the most basic one, i.e., trading software. Trading software is also referred to as a trading platform as it gives us access to the highly liquid forex market, and this is the software interface using which we place our trades in real-time. One of the most popular trading software in the forex space is MetaTrader 4. It is one of the very first trading software designed to cater to the needs of forex traders, and it has lots of advanced features and capabilities.
MT4 has managed to retain its popularity despite the arrival of new trading platforms over the years. The simplicity of MT4 has given it a secure spot in the forex industry as it is the number one choice of all traders, whether beginners or seasoned traders. Modern traders can also check the updated version named MT5, a popular multi-asset trading platform launched by the same developers.
– Charting Tools
Price charts that display historical and current market data and currency rates are an integral part of technical analysis in forex. So, the second tool in your trader’s toolkit is charting tools or charting software. Most trading software, including the popular MetaTrader 4 platform, provides advanced and customisable charts to their users, saving you the time and effort of installing other software for charts. So, you can download MetaTrader 4 from your broker’s website to easily access the charting tools and understand how they work to your advantage.
Candlestick charts originating from Japan are still the standard chart type used by forex traders worldwide. These charts provide a detailed and comprehensive view of the market situation with the most precision, making it a compatible tool for forex trading.
– Technical Indicators
Technical indicators are another essential set of forex trading tools that can assist you in the technical analysis of the forex market. Using some suitable technical indicators can make your analysis more precise and to the point. Most traders use a combination of lagging and leading indicators to analyse the market situation accurately.
The most common and popular indicators used by forex traders include Simple Moving Averages (SMA), Relative Strength Index( RSI), Moving Average Convergence and Divergence (MACD), etc. You need to find the best ones that fit well with your trading plan, and then you can add them to your toolkit for better trading decisions.
– Economic Calendar
The economic calendar is one of the most useful forex trading tools used in modern times. This tool gives us timely updates about key economic data releases and news events, which can impact currency pair prices. This becomes a part of the fundamental analysis and is a powerful tool for traders wishing to trade the news.
– Currency Converter
As the name suggests, a currency convertor tells you the real-time values of currencies by converting them to another currency. This is given as a free tool by most forex brokers and trading platforms as a part of the trading calculator set. This is a basic yet highly effective tool to convert currencies in seconds.
– Pip Calculator
This is another forex trading tool that traders would find useful in their day-to-day trades. Pip is the smallest change in the exchange rate of the currency. Hence calculation of pip value becomes essential for forex trading. A pip calculator is an automated tool that performs this calculation to tell you instant and accurate pip values.
– Profit and Loss Calculator
You can already guess that a profit and loss calculator is a forex trading tool used to calculate profits and losses in a trade. You can use it to plan your trades by calculating a particular trade’s potential gains and losses. Most forex brokers and trading platforms will give this as a free tool to help traders calculate the trading results faster and more easily.
– Forex Position Size Calculator
Position sizing is an important aspect of forex trading. You need to determine the optimal position size for your trades to get the desired trading results. A Forex position size calculator is a great tool to make the process easier. Several forex brokers and platforms will offer this tool, as position sizing is crucial for risk management in trading.
– Commission Calculator
As the name implies, this tool calculates the commission you must pay to place a trade with your Forex broker. It is a useful tool to calculate the cost of trading, which helps you to minimise the same to increase your profitability.
– Margin Calculator
Another simple tool that tells the required margin levels for opening a trade position. This tool is especially useful when you trade with leverage. You need to calculate margin requirements in advance to keep the trade position running without a margin call situation.
– Swap Calculator
Swap is the incidence of interest which you earn or pay while keeping a trade position open overnight. The calculator won’t work if you are trading in an Islamic account because paying or charging interest is prohibited as per Islamic laws. But, swap will be charged for keeping positions overnight for all other trading accounts. The swap charges will differ for different currency pairs, and a swap calculator simply calculates the swap for both long and short positions once you enter the pair, trade size in lots and the number of days for which the position will be held.
– Multi-target Calculator
This is a useful tool for traders with multiple target levels for profit as it helps them maintain their risk/reward ratio by telling what part of the positions should be closed at certain target levels. This tool is great for easily managing each trade’s risks and rewards.
– Pivot Points Calculator
This is an advanced tool for traders who rely on support and resistance levels to analyse the market. Pivot points calculator can perform these complex calculations on your behalf, saving time and effort.
– Fibonacci Calculator
This is a useful tool for doing calculations related to the Fibonacci retracement indicator. This indicator is more advanced and may look complex for an average beginner. Hence, using a calculator that can determine the Fibonacci levels will be helpful to use it properly.
– Currency Correlation
In the forex market, many currency pairs are correlated and tend to move in the same or opposite direction based on the price changes happening in the correlated pair. Hence, a tool that can measure this correlation is useful for traders who trade with different currency pairs.
– Session Maps
Since the forex market is open 24 hours a day and five days a week, the trading hours are divided into four major trading sessions. A session map is a simple tool that can help you track these trading sessions based on your local time zone.
– Forex Demo Account
A Forex demo account can be considered a tool to learn, practise and test your strategies in real-time market conditions. This is a powerful tool that both novice and experienced traders can use to experience trading in a risk-free environment. You can create a demo account on MT4 or MT5, but if you want advanced features and more trading tools, then MT5 would be a better choice.
– Automated Trading Tools
Automated trading tools are used to automate the trading process, including automated trading systems, Expert Adviser/ forex robots, or other tools that support forex automation.
– Copy Trading Tools
This is a popular tool used by novice and amateur traders as they get to copy the strategy and trades of an experienced trader. Copy trading platforms can give you a hands-free trading experience with minimal effort.
– Trading Journal
A trading journal is like a diary where you can record your trades, a great tool for tracking your progress.
Which Forex Trading Tools Would You Like To Try?
Now that we have concluded the list of top 20 forex trading tools you could use in 2024, which tool(s) are you going to incorporate into your trading process? They are all extremely useful, so identify the right ones as per your trading needs and enhance your trading outcomes.