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Five Tools You Should Be Using in Your Daily Forex Trading
October 10, 2017

Anyone who has ever had an experience in Forex trading knows it is a tricky game. In fact, it is that knowledge that is crucial to trade the Forex market intelligently and with the necessary precaution. While the lack of confidence due to a missing trading strategy might cause disaster in Forex trading, the opposite, over-confidence, can be just as detrimental. 

Due to the enormity of the foreign exchange market, no individual, irrelevant of their capital, can say they are safe when trading Forex. There are always risks, constant announcements, and developments that affect the currencies, and then there is human error, which must be factored into the equation. 

While the number of tools being utilized by traders all over the globe is growing with the advancing technology available, the most basic Forex tools that should be used by any and every Forex trader, remain the same. 

The following is a list of some important utilities you should be making use of in your currency trading: 

1)  Forex News

This is a very important tool in your Forex trading, and due to the internet, is much more available to you at any given moment. It is important to pay close attention to the latest developments, and some Forex experts have even recommended leaving a window open in your browser, right alongside your trading platform, for the news. 
 

2)  Mentorship/ Training

This is most important when starting out in Forex. There really is no better way of learning about the market, than from a mentor who has a better perspective of the markets. You can and should be reading up on the history of the market, some trading tips, and strategies, as well as advanced trading advice given by experienced traders. Experienced traders can also benefit from hearing the opinion of other traders, and can learn from their experience as well. 

3)  Forex Broker Reviews

 While there are hundreds of brokers offering Forex services, all promising the best spreads, platform, and service, it is important to read objective and professional reviews of the brokers. Reading what a broker promises you cannot be compared to reading about the experience that broker provided an actual trader when trading their account. Find a source on or offline that you trust, ensure it covers all the characteristics you look for in a broker and read carefully about the broker with whom you intend to sign up.

4)  Forex Technical Analysis

This is, of course, part of the famous debate: technical vs fundamental. Without going into that debate, it is safe to say that no one, in their right mind, would tell you that technical analysis cannot help you analyze the market. Whether or not it is more or less effective than fundamental analysis is for another time, but reading the charts, analyzing the trends, and understanding the market’s movements, will definitely assist you in making intelligent trades. 

5)  Forex Fundamental Analysis

This tool has been explained by some as the results and the predictions of how the news will affect the market. Meaning, you can read the news about some big announcement, but without using fundamental analysis, you might not understand what that will mean for the actual currencies. A very important tool in understanding how the market fluctuates. 

Like I said, these are the basics, the more advanced traders amongst you should, of course, be using other tools such as technical indicators, and communication with the market’s many experts. If you pay close attention to the above tools regularly, you will avoid the element of surprise in your trading by staying on top of the various market developments.

By: Hilllel Fuld

 

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