The industry of forex trading has always been flourishing through the years and more people are turning into this industry as a means of financial support and investment. With the increasing popularity and the number of traders in this industry, many trading platforms and brokers make it a point to provide the utmost convenience to their clients or users. At present, the best convenience a platform has to offer to a trader would be the trading tools. So, what are some of the best trading tools to use to make trading more efficient, convenient, and enjoyable? Here are some of the popular tools which a forex trader should always consider for his game.
(NOTE: Before we continue, we have to give a disclaimer that the trading products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds. CFDs are complicated instruments that are never guaranteed to provide you supplemental earnings. In fact, Around 67% of all retail investors experienced a loss while trading CFDs. Make sure to keep this in mind before attempting to use the eToro platform yourself. All the information found on this website is not official trading advice and all practices shown are referenced for the use of the Demo account only.)
Forex Pip Value Calculator
If you want to know the value of a traded currency in Forex, a Pip Value Calculator would be the best tool to have. This trading tool allows you to calculate as well as plan any trade or orders while dealing with a dozen foreign currency pairs. It is as easy as filling out the form with the required details and then hit the “Calculate” button to get the results.
Of course, it would be very easy to tell the actual pup value of the U.S. dollar currency when paired with other currencies however there will be times when the account currency or currency pair will be different. A currency pair example would be NZD/JPY, GBP/SGD, AUD/DKK, and many others. Having to deal with a wide variety of currencies can be quite daunting however with the pip value calculator, it becomes easy.
Position Size Calculator
In addition to the pip value calculator, you may also want to consider the position size calculator which can help you allocate positions on your trade. This tool can be quite effective especially if you are paying close attention to your stop losses, entry points, risk tolerance as well as account size.
Risk management is among the important elements which any trader should always take into consideration. In fact, it is the one important thing that traders must possess in order to survive and succeed in the forex market. Usually, a trader with great risk management and proper position sizing skills speaks of their experience and versatility in the industry of trading. It is also what sets them apart from beginners or amateurs.
The position size calculator is likewise designed to aid traders in their decisions related to risk management. By using this tool on every trade, you’ll be able to see how much you should be investing and how much you shouldn’t.
The same as the previous tool mentioned earlier, you can use this tool by simply entering your details on the blank fields. Results increase as you also increase the risk percentage as well as stop loss on pips.
With this tool, it becomes easier and more accurate to find the best position size for your trade.
Forex Risk and Reward Calculator
If you’re also looking to track your risk and reward ratio out of each trade, you can also take advantage of the Forex Risk and Reward Calculator. This tool enables you to trace the best targets for a position in the chart based on the retracements using Fibonacci retracement. This tool shows the potential risks involved prior to making entries in a trade.
Work with both Bullish or Bearish markets
The great thing about using the Risk and Reward Calculator is that you can use it for both bullish or bearish markets. Simply enter these required details:
A = starting price for bearish or bullish trades
B = end price for bearish or bullish trades
C = current price
Using Fibonacci retracements, bounce and pullbacks usually happen close to the 0.382 and 0.618 points starting from the entry points. These points will be the go signal for an exit or entry.
As an example, we’ll use the stock NFLX (Netflix) from the eToro platform. Let’s take an instance of a bearish and bullish case from its chart.
The first image below shows a bullish market for NFLX and we’ll use the bottom and top points of the wave which are shown in the image below. Next is to take the details of the wave and fill out the A, B, and C boxes in the tool. For this example, let us assume that 443.64 is the current price (C).
As soon as the details are filled, hit the calculate button to get the results.
In the next image, we have plotted the recommended position targets from the tool and we can see here that the target positions prove to be effective when using it as buying points.
With diligent practice and training, you will find that these tools are really effective in gaining good positions while you trade. Among the best forex platforms to use these tools include eToro – it has a virtual portfolio where you can put these tools into practice before moving into the actual or real trade.
Attention! It’s not recommended to enter a trade if your reward-to-risk ratio is less than 2.
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eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.
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