The foreign exchange market is the market which helps in trading of currencies. The Forex market enables the buying, selling or exchange of currency at current or price determined. Currencies are exchanged with reference to a currency exchange rate. It is the rate at which one currency can be exchanged for another at a particular point in time.
It is quoted in US dollars and the Euro.
These exchange rates are never constant. They keep fluctuating according to the economic conditions prevailing in a country. The factors like inflation, political events, and industrial production decide whether a country would buy a currency or sell a currency in the Forex market.
Foreign exchange trading is not something anyone can do. It needs a lot of experience as it involves a lot of risks. Forex trading is a very competitive forum. Every trader wants to outperform the other and wants to do a safe trading business.
Traders make use of Forex trading tools to improve their success.
Some of the trading tools used by traders are:-
The Volatility Calculator
All the forex traders prosper on volatility. If the Forex is stagnant then the profits are also very low. The traders need to be aware which are the currencies that are volatile and what are their active trading hours so that they can benefit from the change that occurs. Forex has a large number of currency pairs and it is very difficult for a manual trader to calculate the volatility of the currency. To make the task of calculation of volatility possible traders need forex volatility calculator. This calculator can calculate the volatility of about 30 currency pair at a go with the help of historical data that is up to 54 weeks old. This tool is useful as it shows the change in pips and change in percentage in an organized table. This tool also shows graphs which tell the traders about the daily and hourly volatility.
The currency pairs are the alteration of different currencies. If a trader wishes to trade in more than one pair then it is very important to know the interrelationship between currency pairs. If the trader wishes to go for hedging then he must look for negative correlation. If he wishes to diversify then he must look for near-zero correlation. If he wishes to increase the exposure then he must look for a positive correlation.
Time Zone Converter
The cities of New York, London, Tokyo and Sydney are the major Forex trading centers in the world. It is not necessary that all the traders are from these cities. So it is very important for the traders who are not trading from these cities to keep a track of the different time zones. It is not enough to keep a track of these cities, it is also very important to keep track of other major currency markets around the world. This tool will be helpful for the traders to convert the time zones.
Forex traders always have to speculate news and reports. The traders must keep a track of the reports that might affect the Forex market. A Forex calendar is a tool which provides information about relevant currency. The level of impact the currency would have if the rate of exchange changes. The actual figures, forecasted figures and previous report figures. Then a detail tab that explains why traders would care about the report.
Position Size Calculator
A trader must always know how much to risk, to trade safely in Forex. It is okay to risk a fixed percentage of the amount. The position size calculator helps to calculate the size. The trader needs to input the following data : account currency, account balance, risk percentage, stop loss in pips and currency pair. The calculator will compute the position size in standard, mini and micro lots.
This tool helps traders to trade with most Forex brokers. This tool contains a wide community of traders who can be helpful. It offers automated trading to the users. It lets the traders write their own technical indicators. It lets the traders trade on a mobile phone.
Traders who wish to have a successful career in Forex trading must use these tools in their trading activities as these tools are available for free and very simple to use and also assure amazing returns.