As you’re likely aware if you’re reading this, forex is the foreign exchange market. To recap for beginners, this is a global, decentralized market in which people from all over the world trade currencies for financial gain. It’s a vast, highly liquid, and highly active market that is constantly evolving and adapting to the times (even moving onto Instagram of late). And for those who know how to navigate it, forex offers legitimate financial opportunities.
In order to navigate the market, however, beginners need to start with the right tools. To that point, we’ve identified four that you’ll need to get started and trade successfully.
Reliable Currency Converter
This one may seem obvious, but it’s essential nonetheless. When competing with countless other traders in this competitive market, you need to make sure you have the tools you need to work out exchange rates as quickly as possible.
To be quite clear, forex price listings make it immediately clear what any given currency is worth next to a counterpart. As of this writing, for instance, GBP/USD is listed at 1.3227 –– meaning one British pound is worth exactly 1.3227 U.S. dollars. While this information is clear however, a go-to currency converter will help you to consider the implications of exchanges in any amount.
Part of the intrigue (and part of the difficulty) of forex is just how volatile it can be. Certain currency pairs seem to dance around one another; some stay stagnant for long periods of time, before quite suddenly breaking with long-held patterns; others still are just generally unpredictable. It can all be somewhat dizzying to track, but a volatility index will help. This is a tool that will instantly clarify which currency pairs are most active at any given time. So, for instance, if the GBP gains 10% against the dollar in a week while other currency pairs fluctuate only by smaller percentages, the GBP/USD currency pairing will be high on a volatility index.
As noted in the 3 Tips to Trade Forex in a Volatile Market post, experienced forex traders welcome volatility. Price swings represent opportunity. But you need to have a good gauge on those swings to capitalize on them, and a volatility index is a good starting point.
The idea of a trading platform used to conjure images of traders sitting at desktop computers with multiple monitors. Today, however, many turn to apps instead, with services like Robinhood even becoming somewhat trendy, so to speak. There is also a sort of happy medium though, with some established, traditional trading platforms having evolved into more convenient app forms. MetaTrader 4 has long been the standard in forex, and according to FXCM, this platform too can now be used via iOS or Android mobile devices.
In short, you have options. But rest assured, you can find a trading platform that works well for you and which you can access and make use of as conveniently as possible.
Financial news app
Last but not least, it is vitally important to have a reliable source or two for real-time financial news. Updates from the financial world can impact forex markets fairly directly, and therefore affect decision-making among traders. Staying abreast of the latest news is essential, and it’s easily done with a few reputable finance world apps set to alert you of any goings-on. We’d recommend starting with TheStreet, Marketwatch, SeekingAlpha, and/or Bloomberg: The Business News.
Forex can be a tricky market to dive into, but with these basic tools on hand, you’ll be equipped to navigate the market –– and ultimately to find success in it.