August 3, 2022
  • August 3, 2022

Forex trading checklist: 4 essential tools to help you conquer the market

By on June 25, 2021 0

Want to improve your forex trading performance? Here are four essential tools to help you conquer the market.

Did you know that the world forex market in 2020 was worth around $ 1.934 billion? To put that in perspective, this is roughly 2.5 times the size of global GDP. However, despite its incredible size, forex trading for a living is all about fine margins. If you want to beat the market and win your piece of the pie, your mission is to be as specific as possible in the long run.

As they say, The devil is in the details, and the more precise you are in your analysis, the more precise your transactions will become. Nonetheless, any knowledgeable trader will tell you that consistently identifying profitable setups is much easier said than done, which is why a trader must learn to use the vast array of resources at his disposal in order to give himself the best possible odds. to conquer the market. . On that note, let’s take a look at four of the must-have tools that every trader should have in their arsenal.

1 – Mapping software

Charts are one of the most important things to have in forex trading. You can use them to track market activity, spot patterns, research the price movements of individual currencies, and even perform real-time market analysis. Fortunately, the most popular charting software vendors usually give you access to a wide range of technical indicators, which can help you improve your overall accuracy.

Nowadays, real-time charting is available on most advanced forex trading platforms. That said, if you are looking for something more sophisticated than what your broker offers, there are plenty of standalone options to explore.

2 – A trading journal

Analyzing, monitoring, reporting and evaluating your past and future trades are all important aspects of successful forex trading. Without accurate records of all the positions you have taken, it will be very difficult for you to understand why you end up losing (or winning). The point is, while it is convenient to learn from other traders through materials such as online courses and seminars, the best way to improve yourself is to review your own trading activity.

Keeping a trading journal is a great way to observe your trading habits. It allows you to gain valuable insight into your trends and highlights weaknesses and potential mistakes you make. Here are some tips for keeping a trading journal:

  • Note each trade before entering a position (include your reasoning and what logic the trade is based on)
  • Record your emotions before and after
  • Take the time to go back and reflect on your previous transactions. For example, review yesterday’s transactions before you start your new session.

3 – Forex signals

One of the most difficult aspects of trading is having to continually develop your own trading ideas. Conducting fundamental and technical analysis can become tedious for even the most disciplined traders, and when your focus wanes it can lead to costly mistakes by entering sub-optimal positions.

A great way out of the monotony of finding your own positions is to follow trading signals (a form of copy trading). That being said, it is essential to note that the best forex signals Only worth following if you know they are from a reliable and trustworthy source, so be sure to do your homework before blindly following someone else’s advice.

This does not mean that you should completely ignore technical analysis and stop looking for your own trading opportunities. Forex signals should be used as a guide to incorporate into your regular trading practice to help you identify potentially profitable positions and improve your accuracy over time.

4 – Forex time zone converters

The best times to trade the market largely depend on where you are located and what currency pairs you want to trade. As you know, the 24 hour forex market is divided into three main trading sessions: the London session, the US session and the Asian session.

This can be confusing and confusing for traders, especially those who wish to trade multiple currency pairs simultaneously. To make things easier, you can use a forex time zone converter to know when sessions are open or closed and when trading sessions overlap. These events tend to be the times of the most volume and volatility; therefore, it is essential to be aware of these events in order to be able to plan accordingly.

Final result

There are many tools available to help you become a more efficient forex trader, and the majority of them are inexpensive and simple to use. In general, experience and knowledge are the most important aspects of forex trading. As such, it is your responsibility to acquire information and determine the best course of action at any given time, and the four tools listed in this article can help you do just that.