The wide world of financial trading seems scary and complex, and that is partially true. Getting into trading requires a lot of patience and a lot of studying. Just like learning a new subject in school, there is always more information you can absorb. Even experienced traders are never truly satisfied with what they know because the financial markets are always changing, and so are the tools that they have at their disposal to make it all happen. One of the most popular forms of trading is forex trading, which is the trading of global currencies in the marketplace.
Forex trading is popular because it can be very lucrative if you commit to that goal of always adapting and learning. Global currencies are constantly in flux with conversion rates and speculative demand and value, so it takes some serious know-how to compete against the market of traders. Traders learn their skills or are born with a natural ability to read numbers and charts to spy trends, but they also need the tools to succeed too, and here is a list of some essential tools that a forex trader needs.
1. Trading Bots
Many of the best traders have honed their skills through years of practice and effort, but sometimes you could use a little assistance. With the use of a forex robot or bot for short, you can receive assisted mathematical algorithms that can accurately predict price trends, strike times, and enter-exit market timing. These algorithms can track calendars for expected actions which helps stay one step ahead so you never fall behind.
2. Multi-Monitor Setups
Forex trading is all about being able to monitor the markets, and with the number of currencies and currency markets active at one time, you need to be able to keep up. Multi-monitor setups have been a blessing for traders at home because it mimics a trading desk at a financial firm. The ability to see all of the action happening on multiple screens allows you to multitask incredibly fast so you are never losing out on trades or missing changes in markets.
3. Trading Calculators
Trading calculators are an invaluable asset to your “toolbox” for forex trading. Trading calculators do not work like a typical calculator where you input numbers to add, subtract, divide, or calculate. What trading calculators focus on are pips, Fibonacci calculations (adjustments to chart trends), margin calculations for your account, and Forex pivot values. These calculators are specifically designed for traders to keep track of all fluctuations in percentages, points, and values for long-term holding and short-term trading actions. So, you can see how important it could be for your use too.
4. Good Trading Platform
It really should go without saying that you need a good trading platform, but people underestimate how important their software can be. Some of the best trading platforms on the market now are the MetaTrader 4 and 5 platforms from MetaQuotes because of their trustiness and reliable use over a 10 year period. Among the other platforms that are available are cTrader, NinjaTrader, and eSignal. All of these platforms offer similar features, but things to look for include regular updates, connection to a broad range of markets, and fees for the software. Another thing to consider is what list of brokers you can use for your trading platform as well because some platforms only allow from a small list.
5. High-Speed Internet Connection
It also might seem silly to suggest such a common thing that many households already have, but you would underestimate this suggestion. High-speed internet connections, which should be above 100-200mbps are good if you are a sole user, but the more people who are connected to your internet the more you will need for connection speed. Upwards of 200 to even 1000mbps connections will provide you blazing speed so you are trading in real-time consistency and never have to deal with missing out on trading options because of lag on your end.
6. Ergonomic Chair and Computer Accessories
If you trade as a hobby or for a little extra cash, then you likely only commit a few hours a day to it, but for those who use forex trading as a primary source of income, you want to be comfortable for long periods of time. Investing in some ergonomic chairs and computer accessories will take the stress off of your back, butt, and wrists. Chairs with lumbar and spinal support, along with wrist cushions on mouse pads and ergonomic mice will prevent chronic pain from developing so you can sit comfortably while trading all day.
7. Upgraded Computer Components
The actual hardware of your computer may be causing you problems, which is why you need to invest in some serious upgrades to your desktop unit or laptop. Laptops are not as common for traders unless you have multiple monitors for the basic fact that laptops are usually not as powerful nor do they have the screen space. Things like GPU, CPU, RAM, and battery/power source can always use upgrades to increase the speed and efficiency of your computer for trading so you can run multiple programs at once without slowing down or crashing.
8. Dedicated Office Space
Not so much a tool as a general piece of advice for your living quarters, but a dedicated office space will give you a much more professional place to do your work. Trading is a serious business and you need to be absolutely locked in, so having a good desk, possibly an adjustable one, along with organizational cabinets can help you keep focused.
9. Economic Calendar
Economic calendars are dedicated to market changes. Things like monetary policies, company announcements (mergers, acquisitions, etc.), and reports are useful for keeping you up to date so you are ready for trading events ahead of time. Economic calendars are a small but mighty piece to your arsenal.
10. Journaling Software
Lastly, you need journaling software to help track your trades. Keeping a detailed ledger of all your logged days and actions will help you analyze trends in your trading patterns so you can learn, as well as predicting market analysis. Journaling software is easy to find, and you can find free or cheap versions everywhere. Again, small but useful.
With this list, you can pick out what you need that you do not have or start gathering the tools. The essential tools you need to become a better forex trader will help amplify your existing skills and make the learning curve much easier to navigate.
