8 Essential Tools for Successful Forex Trading

May 24, 2024
4 min read

Thanks to factors such as market volatility, low capital requirement, and increasingly robust regulatory framework, forex trading in Kenya has never been more popular or lucrative.

However, nowadays, you need far more than intuition to succeed at forex trading. Regardless of how razor-sharp your instincts are, you’ll need to be armed with the right tools to make a killing in the currency markets. Fortunately, these tools are more accessible than ever before, with many of them revolutionising trading activity entirely. Below, we’ll take a closer look at eight crucial tools no forex trader should be without.

1. Social Trading Tools

Indispensable for the beginner, social trading platforms allow the inexperienced trader to parrot the actions of their more experienced counterparts. The ability to monitor and mirror the trades of experts is a simple concept and seems too good to be true, but there are plenty of platforms out there. Rather than see these platforms as a savvy way to circumnavigate having any actual skill, they should be seen as the learning avenues they are.

2. Risk Mitigation and Management Tools

Risk is ingrained into the fabric of forex trading. However, this shouldn’t deter any self-respecting trader. That being said, any trader worth their salt should be armed with a raft of risk management tools. Stop-loss orders are one such secret weapon, allowing you to minimise potential losses automatically. These, along with things like take-profit orders, will ensure you’re protected from any unanticipated market changes.

3. Trading Apps

Prefer to trade on the go? Mobile apps are the way forward. With something like the MT4 app, you can access a full-featured trading platform with none of the limitations of trading apps of yesterday. Instead, MT4 and similar apps are mobile-first solutions, with high responsiveness and features designed with smartphone and tablet users in mind.

4. Look Out for Economic IndicatorsI

f you want to make smart decisions when forex trading, you need to be keeping an eye on the news. All manner of economic indicators can impact the market, but you’ll need to display more than a knee-jerk response. Economic calendars can help make sense of economic indicators and what their implications are for forex trading. You’ll be able to access essential coverage on impending financial events, not to mention assess the possible impact. What’s more, you’ll have access to reams of historical data to help you make informed decisions, every time.

5. Automate Your Online Trading

Don’t fancy the idea of spending all day at a computer? There’s no need for you to be. Instead of putting in endless hours every day, you can choose to leverage the potential of automated trading software instead. Advanced algorithms are the lifeblood of these platforms, identifying trading signals that might yield a profit. What’s more, they can execute trades automatically, as well as make risk management decisions without any manual input required. Some apps also offer automation potential, with the likes of the MT5 app allowing you to tap into the potential of algorithmic trading.

6. Keep a Journal

When we talk about trading journals, we’re not talking about a traditional diary for your thoughts and musings. Instead, trading journals serve as an invaluable reference point to help you itemise previous trades and chart your behaviour. Had a bad week? A comprehensive trading journal can help you make sense of what went wrong, identifying telltale patterns and bad decision-making. Likewise, if you’ve enjoyed a successful spell, a trading journal can be used to spotlight your trading strengths. With this resource to hand, it’s easy to fine-tune your trading strategies for continued success.

7. Identify Opportunities with Market Scanners

Don’t have time to scour multiple markets and currencies? Time is of the essence in the forex trading sphere, so being able to tap into multiple markets at once for insights can prove invaluable. Market scanners serve exactly this purpose, giving you a snapshot view of the state of the market and identifying potential opportunities. No matter the currency and regardless of the time frame involved, market scanners can help you single out the most rewarding forex trading avenues.

8. Charting Platforms

Many traders depend on visual tools to help them make sense of the forex market. Charting platforms are designed to provide exactly this, capturing market data and retooling it into visual form. These charts can be customised to focus on the metrics most important to you, allowing you to quickly identify potential trends and opportunities.

Ultimately, it’s down to you what to include in your forex trading arsenal. At the very least, charting platforms and market scanners should be in your toolkit. For the less experienced trader, social trading platforms are invaluable. For the savvier trader, unlocking the power of automation is the way forward.  

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