Trading Essentials
Most Popular Forex Trading Tools Ranking
7 min read

Forex, also known as the foreign exchange market, stands as the world's largest financial marketplace, boasting a colossal daily trading volume reaching up to a staggering 7.5 million USD. With its enduring presence and sterling reputation, the Forex market remains beyond the control of any single entity, making it the quintessential hub for trading.

Yet, for traders to navigate the world of Forex effectively, they must harness the power of Forex trading tools. These tools are crucial in aiding traders to make sound decisions when it comes to buying or selling currency pairs.

Let's construct a ranking, starting from the 10th most important, counting down the Forex trading tools deemed moderately to extremely essential for traders:

How Forex trading tools work

When trading on the forex market, two currencies are simultaneously bought and sold. Every currency trade involves a pair of currencies, and when you take a position in forex, you simultaneously go long one currency and short another. 

In a currency pair, the base currency is the first currency, and the quote or counter currency is the second. The quantity of quote currency required to purchase one unit of base currency is known as the currency pair's exchange rate. 

That's why the right prediction is a key element to making a profit, otherwise, you have to hold a big deal of debt. Forex trading tools below help you to raise the percentage of winning.

10. Trading Journal

Trading journal serves as the initial Forex trading tools, offering traders a means to assess their applied strategies and overall effectiveness. Some believe a trading log is the most important tool other than charting software and a broker platform.

This tool provides valuable insights and identifies areas for improvement. Some platforms supporting transaction logs include:

  • Myfxbook: This platform enjoys popularity within the trading community, offering a free online trading diary among other services. While not flawless, its strengths lie in diversity and completeness.

  • FxBlue: FxBlue shares similar features with Myfxbook but comes equipped with the ability to filter trades based on optional criteria. This feature assists traders in easily determining the effectiveness of their systems based on trading history.

9. Trading Signals

The 9th position is occupied by trading signals. These signals are often provided within social network groups for free or with a participation fee. It often when newbies attend Telegram group or Twitter with VIP level or monthly price, they would provide signals every day from 1 to 5. Ordering decisions belong to us.

However, this tool has its drawbacks, as it relies on the knowledge of others. More optimal options exist further down the list.

8. Charting Platforms

The charting platform ranks as one of a trader's most essential Forex trading tools. It goes beyond mere red and green lines or candlesticks, offering a variety of features. Most advanced platforms provide real-time charting services, although you can also obtain charting software elsewhere. 

Some notable platforms include:

  • Tradingview: A highly popular Forex charting tool that allows tracking of nearly any market. Users can upgrade to a premium package for access to more indicators and the ability to freely share and store charts.

  • Traderwave: Although relatively new, this user-friendly system provides a wide array of candlestick models, with a particular focus on the Asia - Pacific markets.

7. Pip Value Calculator

The size of your trading position, the currency pair you are trading, the exchange rate, and the leverage you are using are all taken into account by a pip calculator. The calculator automatically determines the value of one pip in the currency of your account by entering this data.

Whether you're a novice or an experienced trader, calculating pips, volume, lots, or micro-lots can sometimes pose challenges. This is where Forex calculators come into play as one of the Forex trading tools. It's advisable to keep a calculation sheet handy to become proficient and prevent significant losses from miscalculations.

Currently, there are many news sites, exchanges, and websites that offer this Forex computer. Common options include:

  • foreign time

  • myfxbook

  • cashbackforex

6. Backtest Support Tool

Distinguished from trading logs, backtesting stands as one of the crucial Forex trading tools for evaluating the results of automated trading EAs (Expert Advisors). Two standout options include:

  • Profit Finder: This foundational system aids in determining the profit and loss characteristics of multiple systems. Traders need not possess coding knowledge; they simply input data such as account size, ideal entry and exit points, slippage, and commence backtesting.

  • QuantOffice: This system is geared towards backtesting complex trading strategies, requiring some programming skills and incurring certain fees.

5. Economic Calendar

In Forex trading, staying informed about economic news alongside technical analysis is vital. The timing and date of significant economic data releases that could have an impact on currency pairs are listed on an economic calendar. The information contains information on employment, inflation, GDP, and central bank meeting dates. 

Determining the timing of information releases, economic indicators, and central bank meeting reports holds significant importance. This information is compiled into an economic calendar, one of the most effective Forex support tools widely used by traders.

Traders rely on three key data points: actual results, predicted results, and results from the previous period to analyze market fluctuations. For instance, when reading non-farm employment data, if the U.S. indicators surpass expectations, it can lead to a sharp increase in the US Dollar Index (USDX) or a decrease in XXX/USD currency pairs. This, in turn, affects commodities like gold or silver.

4. Technical Indicators

Technical indicators serve as valuable Forex trading tools for analyzing currency pair price trends. Popular technical indicators include MACD, RSI, Stochastic, Bollinger Bands, Ichimoku, and many others that, while less common, remain equally useful. Various platforms allow traders to integrate these indicators into their charts, ranging from free to paid options. It's crucial for traders to thoroughly understand the properties of each indicator to apply them effectively.

3. Heat Maps

Heat maps, often underestimated, are Forex trading tools that gauge the strength of a currency pair relative to others. Higher green values denote robust growth, while red signifies weakness compared to other currencies. A volatility calculator uses historical exchange rate information for a currency pair to calculate historical volatility in real time for a variety of time frames.

Heat maps aid traders in selecting currency pairs with the highest volatility or those experiencing substantial fluctuations, making them particularly useful for swing or day traders. Websites such as Finviz, StockTwits, Myfxbook, and others provide online Forex heat maps.

2. Expert Advisors (EAs)

Trading robots, known as Expert Advisors or EAs, are automated Forex trading tools that enhance trading efficiency. Based on pre-set analyses, EAs optimize capital management and discipline, mitigating the psychological aspects that often affect traders. 

To implement a complete EA, a smart platform is needed to ensure adherence to trading principles. Additionally, traders must master the Forex trading tools listed above, from backtesting to technical analysis.

1. Social Trading Networks

When commencing trading, many traders tend to focus solely on exchange products, overlooking the broader context. An ideal social trading network not only facilitates rapid and precise order execution but also provides a copy-trading platform with reputable experts. Such networks cultivate a strong, supportive community that encourages regular discussions and continuously improves support products or Forex trading tools. FXCE, for instance, offers exclusive products like Trader's Guard, Trading Analysis, and Copytrade options & modes, despite its relatively recent establishment in 2020.

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In Conclusion

The ranking of Forex trading tools outlined above aims to emphasize indispensable aids for Forex traders. Consider this as a reference point, and prioritize those at the top of the list if they are not yet integrated into your trading system. Ultimately, both traders and investors should continuously enhance their knowledge and expertise to proficiently utilize these Forex trading tools. Happy trading!

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