Trading is a difficult venture, but with the help of the right tools, you can make it easier. This is why in this article, we are going to talk about top free trading tools that you can add to your trader’s toolkit to enhance your overall trading experience. If you are interested, keep reading!
Free Trading Tools To Improve Your Trading Skills:
Demo Trading Account: A demo trading account, also known as a demonstration account, is an important tool traders can use to test the waters before trading with real money. It is a practice account that is provided by all trading platforms and brokers. You can try the platform features and test your strategy before committing to a real trading account. Demo accounts mainly gained popularity when online trading became a thing. Initially, they were promoted as a method for users to test how the platform works. However, since demo accounts allow traders to make simulated trades using virtual money, traders can get a feel of trading in a safe and risk-free environment.
Trading Calculator: Forex trading calculators can be used to estimate the potential outcomes of a trade. Different types of calculators are available online, and you can use them as per your needs. For instance, if you want to find the pip value, you can use a pip value calculator, and if you want to estimate potential returns, you can try a profit calculator and so on. You just have to enter the necessary information, such as the trading instrument, your account currency, leverage, and whether you want to buy or sell, and click the calculate option. It’s as simple as this. The calculator will then provide you with important details like margin requirements, position size, spread, overnight swaps, and the bid and ask prices. You can also adjust the leverage ratio and set stop and limit orders to plan your trade effectively. A Forex Calculator helps you in making informed decisions about opening or closing your position, understand the margin required, analyze the spread, and get other essential information. It’s a handy tool to help you plan your trades and make better trading decisions.
PIP Calculator: The Pip Value Calculator is a handy tool that helps you determine the value of each pip in your trading account’s currency. It’s important because it allows you to manage your risk effectively for each trade you make. To use the calculator, you just need to know the currency your account uses, the currency pair you’re trading, your position size, and the current exchange rate. In forex trading, a “pip” is the smallest unit of measurement. With these details, you can easily calculate the pip value. Now, you might be wondering, what exactly is a pip? Well, in forex trading, the term “pip” means “percentage in point”, or some traders also call it “price interest point.” A pip is the smallest possible change in the exchange rate of a currency pair. For most currency pairs, a pip corresponds to a movement in the 4th decimal place, which is 0.0001. However, there are exceptions to this rule. In Japanese yen pairs, for example, a pip represents a movement in the second decimal place, which is 0.01. By using the Pip Value Calculator, you can quickly determine the monetary value of each pip based on these decimal movements.
Position Size Calculator: The position size calculator is a tool to calculate the appropriate size of your trading position. The right position size allows you to manage your risk while trading effectively. Therefore, you must use the trading calculator to choose the right size for your trading position. You only need to provide certain inputs like specifying the account Currency, selecting the account leverage you are using, and choosing the trading instrument and trading symbol. Once you fill in these details and hit the Calculate button, the calculator will provide you with the appropriate position size for your trade.
Profit Calculator: The Forex profit calculator helps you determine the potential profit or loss you may incur in a trade. Since profit is calculated as the difference between the open and close prices, the profit calculator works by calculating the difference between the entry and exit prices and multiplying it by the pip value of your trade. You can use the profit calculator to understand your trade’s potential profit or loss when planning your trading strategy. But that’s not all! You can also use this calculator to determine take profit or stop loss levels. Using a profit calculator, you can adjust your trade size, take profit, and stop loss levels to align with your trading plan and manage potential gains or losses.
Here are some details that you need to input to use the profit calculator:
- Currency Pair: Enter the currency pair you are trading.
- Account Currency: Specify the currency in which your trading account is denominated.
- Trade Size: Input the trade size in lots or units.
- Open Price: Enter the entry price of your trade.
- Close Price: Input the exit price of your trade.
- Direction: Choose either “buy” or “sell” (When trading forex, you can open a trade in two directions: buying (long) or selling (short). To make a profit from a buy trade, you need to buy a currency at a low price and sell it at a higher price. For a sell trade, you sell a currency at a high price and buy it back at a lower price.)
Pivot Point Calculator: The Pivot Point Calculator is a tool that helps traders make predictions about future price movements based on the average of high, low, and closing prices from the previous trading day for a specific asset. It’s especially useful for intraday trading. If the price of an asset is above the pivot point on the next trading day, it suggests a bullish trend, indicating potential upward movement. On the other hand, if the price is below the pivot point, it suggests a bearish trend, indicating potential downward movement. The Pivot Point Calculator helps traders anticipate whether an asset’s price will likely go up or down based on the previous day’s price data. Traders can use this information to decide when to set boundaries to protect against losses and when to take profits.
Trading Platforms: A currency trading platform is software that helps traders by providing them with an interface to place buy and sell orders in the forex markets. A trading platform can be accessed online through a website, a mobile app, or a downloadable program. Apart from allowing traders the ability to execute trades, trading platforms also provide tools for technical and fundamental analysis of the pairs. However, you should be aware that in order to use a trading platform, you must have an active account with a Forex broker that supports your desired platform. Most forex brokers offer popular MetaTrader4 and MetaTrader5 platforms, but some also have their own customized platforms. Therefore, you should only choose the broker after checking the trading platforms they offer.
Forex Calendar: It helps traders stay informed about important events that can significantly impact the foreign exchange market. By keeping track of these events, traders can spot valuable trading opportunities and anticipate changes in market volatility. The economic calendar contains information about upcoming events that will be released in the coming days and weeks. It allows traders to prepare for these events and understand how they might influence the market. Different versions of economic calendars are available, but they usually provide details about the event itself, its scheduled date and time, and previous, expected, and actual values. Traders can assess the significance of these important events using economic calendars.
Time Zone Converter: The Fx market is open 24 hours a day, so you can trade currencies anytime. However, this doesn’t mean that the values of currencies also keep fluctuating around the clock. To stay aware of the active currency sessions, it’s recommended to use a Forex time zone converter. This converter helps you see which currency sessions are active and which are closed. The trading platform you use should provide a time zone converter tool. Time zones will vary depending on your geo location, so checking a Forex time zone converter is always a good idea to align your trading activities with the relevant sessions.
To conclude, there are a number of useful tools that can assist you in making trading decisions. Using these tools can improve your decision-making and save time and effort. Since you don’t have to do the calculations manually, you can be sure the results are precise and reliable.