Forex trading tools: As Forex is the largest market in the world and there are many techniques and tools used by traders to make their trading easier.
There are two main types of analysis that are used by traders:
-Technical Analysis: is the first type and this type of analysis is based on the concept that the historical price of a currency can be used to predict the future price. Since Forex is a 24 hour market, there is a lot of information to process and Forex trading tools organizes all that data to make it understandable for the trader; some of these tools include:
—Pivot points calculators: Pivot point is the price at which the price fluctuation of a currency pair is expected to move into a different direction. Pivot points calculators also determine support and resistance points. Support is the lower price of a currency and if the price reaches that point it might start going up. Resistance is the higher price of a currency and if the price reaches that point then it might start going down.
If, for example, a currency pair price is hiking up then the pivot point price indicates that once the price reaches that level the currency pair might start going down and vice versa.
For a trader taking in account this kind of movements can help to trade successfully.
There are different methods to calculate pivot points such as: Standard, Fibonacci, Camarilla, Denmark and other pivot point calculators.
It is recommendable to stick to one of the methods to avoid confusion when trading.
— Forex performance charts: Those show the major currencies, commodities and other assets performances and establish a comparison in between them.
In Tradeview Forex, the chart shows which currency is strong (which performs better) and which currency is weak (which has a poor performance) against US dollars.
Those charts show the data in time frames, and traders can use this to identify which currency pair is better to trade with, performance charts are one of the favorite Forex trading tools for most traders.
-Fundamental analysis: Fundamental analysis is the second type of analysis and is based on how economic and social events can affect currency prices in Forex market. Forex calendar shows events that will happen from one day to the next and forecast what can be the result of those events.
A good combination for a trader is to use some of the Forex trading tools related with technical analysis and with Fundamental analysis by checking the Forex calendar.