The foreign exchange market, also known as the forex or FX market, is the global trading platform on which currencies are bought and sold. Each country’s currency has its own value, which changes relative to other currencies depending on numerous different factors.
Currencies are matched in pairs so that the value of any given currency can be compared to the value of all the others. Traders follow the fortunes of one or more pairs of currencies, trying to determine which will increase and decrease and when.
By buying currencies when they are at their least valuable and selling them when they have rallied, traders can capitalize on the smallest changes in currency values. Most rely on volume to help them maximize the profits from smaller fluctuations, but good timing can help traders make money on smaller volume trades as well.
The global appeal of the forex market
Forex trading is ideal for those that have an interest in global affairs as the markets can be affected by international events. Political upheaval, industrial unrest, legislative changes, and technological advances can all have an impact on the performance of a country’s currency.
Most forex traders will follow the news closely, learning about the historical performance of currencies linked to the country’s political and social activity at the time. Analyzing this historic data allows a trader to make more informed predictions about how a currency will react to any expected changes.
Traders are always looking for ways to maximize the incremental changes in currency value, and there are a number of tools designed to help them do so. Using these can help take the uncertainty out of trading and enact a planned strategy without needing to make every trade individually.
Trading tools
There are plenty of different types of software dedicated to making trading smoother and easier, with different features that appeal to different trading styles. These include:
Trading signals – these are designed to help traders spot opportunities to make a profit, alerting traders to trends that might help inform their own strategies. This kind of software will usually allow you to create a profile and customize the signals that are sent to you based on your trading plans.
Trade analyzers – this kind of software uses information from a variety of sources, including the trading patterns of experts and the historical performance of specific currencies. The way forex trades are conducted means that there is a vast amount of data available on the outcomes of various trading activities.
This degree of data analysis and reporting makes it possible to make more accurate predictions so many traders use analyzers to help them plan their strategies.
Bots and artificial intelligence – the main feature of programs that use artificial intelligence is that they can learn how to perform actions efficiently and effectively. Trading bots use data from top-performing traders to learn how to make better trades and turn higher profits.
These bots can identify the traders that are having the most success and copy their trade positions to emulate their decision-making processes. This can be a reassuring option for those that want to be relatively hands-off with their trading account.
A choice of trading tools
Most traders manage their accounts via specialist software and there are a number of trading platforms to choose from. Some are aimed at beginners and others at more experienced traders and each offers its own features designed to offer users personalized insights into their trading patterns.
There are also other tools that can be useful to traders:
FXTM – as one of the top brokers in emerging markets, FXTM offers trading signals to help its users make the right moves at the right time. Their award-winning service includes education and excellent technological trading support.
Robinhood – this software is ideal for beginners that want to have all the information they need at their fingertips without being overwhelmed. Designed by expert investors, this platform has everything traders need.
Tradingview – as the name suggests, this platform is ideal for those who appreciate easy-to-read visuals to give them an overview of the trading landscape. Data is collected and updated in real time, giving traders the most accurate view of the current trends and allowing them to take advantage of every opportunity.
Stockwits – this news site has the latest news on everything affecting investments and markets, and users can customize their view to ensure they have the most relevant information at their fingertips at all times. Users can stay on top of any news that could affect their trades and decide when to buy and sell based on their analysis of that information.
Using specialist tools can help forex traders to maximize their profits by helping them to identify the best way to manage their accounts. New technology is being developed all the time so traders can make the most of cutting-edge analytics and predictive software to inform their decisions.
