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What are the Tools of a Forex Trader?Each trader is different. Some may utilize a host of different tools. Others may only rely on fundamental news reports alone. Depending on the strategies you employ and the type of trader you are, you may require different Forex software tools. Here, we identify some of the more prevalent tools used by typical Forex traders.1. Forex Charts Very few Forex traders trade using fundamental analysis exclusively. Almost all successful Forex Traders employ at least some type of technical analysis in their trading. Most, in fact, utilize technical analysis extensively. This necessarily means they will need to look at price charts. If you are like most, you must have some type of charting service available to graphically depict price action in the currency market. The type of charting services offered on the market today vary from simple basic charting services that do little more than plot your currency prices with little or no bells and whistles to advanced charting services that offer all sorts of analysis tools, indicators and even programming functionality. The type of charting service that you will need will depend on many variables including the nature and complexity of your trading system, the amount of money you trade and whether you trade in shorter time frames or not, to name a few of such variables. Charting services are available free of charge at a variety of places on the Internet and there are also very expensive premium services. 2. Forex Trading Platform Once you identify a trade setup using your charts, you will want to enter a trade. Here is where you switch to your Forex trading platform for order execution. Trading platforms are generally speaking proprietary to the Forex broker that you sign up with. Some use common platforms like the Metatrader 4 platform. Others have their own unique layout and functionality. Choose a platform that allows you to efficiently execute and monitor trades. There is a balance to be struck here between functionality and visual appeal. 3. Forex Software Many Forex traders utilize a variety of other pieces of software to give themselves an edge over the market. There are so many different tools out there that traders use to give them an edge. Some are simple administrative tools such as electronic record keeping software. Others are more strategy based tools such as expert advisors that give advice on trades. Some even automatically execute trades. Others use Forex Simulator software that allows you to test strategies and hone your skills in a simulated environment. 4. Forex Books and Websites There are a lot of excellent books on Forex trading that have recently been published. As well, there are some really good websites that provide excellent learning material for currency traders. Any serious trader will be regularly looking through these resources. These books range from simple introductory books to full-blown expositions of a particular trading technique or system. With each book, website or article you read, you gain little tidbits of information from a seasoned professional. Some books are better than others. 5. Forex Forums Forex Forums, bulletin boards and particularly, Forex chat or trading rooms are becoming more and more prevalent. These tools allow traders to interact with each other and share information. With Forex Trading Rooms, parties can actually trade together and discuss trade setups, charts, news reports, etc. in real-time as they happen. This can be a powerful tool if the quality of traders involved is high. 6. Forex Tips Another useful tool that some Forex traders utilize is the concept of Forex Tips. Forex Tips are exactly that - a tip or opinion from other, usually more knowledgeable, people about what the market might do on a given day or time frame. These often come in the form of some daily email which contains trading tips on a particular currency pair. Often times, it may include a daily chart analysis. Some of these services are free. Others are premium services. 7. Forex News Services Fundamental analysis is central to currency movements. Currencies can move hundreds and even thousands of pips in minutes, hours and days as a result of economic news releases. As such, many traders invest substantially in relevant and timely news services related to the currencies they are watching. Again, services range from free basic services which are often included with your trading platform to very expensive newswire services offered on a subscription basis. 8. Forex Signals Many traders pay for trading signals offered by reputable mentors or trading services. These typically involve real-time delivery of trading signals whereby the service provider sends out a communication in the form of an email or SMS message advising of a proposed trade setup. This often includes precise entry, exit and stop loss levels. Some use these signals as their entire trading formula while others simply incorporate this information into their own analysis. 9. Forex Managed Accounts Many folks simply don't have the time to trade on their own. An alternative way to make money with currency trading is to let someone else do the trading for you. There are many companies out there that will allow you to deposit your funds with them and they will trade your funds as part of a common pool of funds. Of course, they will take a percentage of your profits. 10. Forex Systems In order to have an edge on the market, one needs a comprehensive integrated trading plan. There are trading systems of all shapes and sizes available. Some are available for free over the Internet. Others are proprietary plans and cost money. Some are simple and can be implemented quickly and efficiently. Others have a substantial learning curve. One thing is for certain - even a mediocre plan is preferable to no plan at all. Don’t forget to
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