Forex stands for the foreign exchange market, which is one of the most liquid and extensive global markets. Millions of traders invest their capital in foreign exchange to earn a profit. However, the market has depth and it is full of complexities. So, a trader needs to be familiar with specific items, such as charts. Charts play a major role in profitable trading, and thus, hold quite a lot of significance.
They are not only useful to human traders but are also relied upon by forex expert advisors to follow the market. With the help of charts, traders can identify trading opportunities. For example, indicators can be used on charts to anticipate increased price actions. There are different charting software that you can use for utilising the charts. However, you need to choose the best forex charting software for acquiring the best results.
What is a forex charting software?
A forex charting software is nothing but a platform where prices of different currencies are collected to be displayed on a chart. Many forex brokers have individual prices. In those cases, the charting software collects the price feed from the brokers. However, the operations of different charting software differ from one another. Some of them pick prices randomly from different brokers. Others focus on all prices in the market for coming up with the average. Hence, the average value appears on the chart.
You must know that charts are the most valuable when it comes to automated forex trading. It does not matter if the trading is completely taken care of by the trading robot or it is hybrid automation. Regardless of the option, the forex charting software allows traders to follow the fluctuations in currency prices in real-time. Moreover, the majority of the software offers charting tools to traders so they can come up with trading strategies that can help them win the trade.
Why is the forex charting software useful?
Generally, trading platforms like MT4 come with forex charting functionalities. However, sometimes, the functionalities are not effective and convenient enough for the trader. Some of the automated trading strategies are very complicated which require more advanced charting capabilities. In those cases, the role of the forex charting software cannot be denied.
Specifically, the forex charting software is designed with advanced analytical tools that are used to do technical analysis. So, both human traders and forex expert advisors can overcome the drawbacks of the trading platforms provided by brokers. Another great benefit of forex charting software is that it works on multiple devices. So, if a trading platform is not available on a mobile device, you can use charting software to gain access to the charting tools from the device.
Any kind of trading is full of risks and you can end up losing your invested capital at any time. With forex charting software, however, traders can minimise the trading risks to a great extent. A great advantage of this software is that it allows traders to trade with virtual money. As a result, they can test and see the performance of the program without the risk of losing money.
If a trader does not want to do the trading on his/her own, then he/she needs to rely on the services of a broker that does the trading on the behalf of the trader for a fee. Now, these services are expensive and the fee is not a one-time thing either. With a forex charting software application, traders can avoid paying these high charges.
How to choose the best forex charting software
You can find plenty of information about forex on various media platforms, but some of them can be misleading. As a result, many traders, especially beginners end up losing huge amounts of money. You need to keep in mind that there are many charting software available in the market and many of them are useful, but only a few of them work properly for each type of trader or forex EA. To avoid making the mistake of selecting the wrong charting software, you can take these simple steps:
#1 Define your requirements
You need to be sure of what you want from trading at the end of the day. It does not make a difference whether you are a beginner or an expert, but you must have your set of requirements to earn from forex. After outlining your requirements, you will experience better performance of algorithmic FX trading functions and the system will live up to your expectations. For instance, you need to determine if you want to be a day trader or a quasi-active trader. If day trading is your option, then relying on the charts on your trading platform is your only option. On trading platforms like the MT4, you can identify trading opportunities by using the best forex indicators like the RSI (Relative Strength Indicator).
#2 Experiment on various platforms
You can use other charting software, especially the web-based ones if you are not a day trading. Web-based trading software provides a wide range of analytical tools at free of cost. Some of them also have free desktop application versions. The full-featured chart is provided with various tools including charting tools, a news feed, and a watch list. This means that the trader can follow every quick movement even when he/she is using a forex robot.
#3 Leverage resources from professionals
While the internet is filled with misleading information, fortunately, you can also find important information shared by trading experts on authentic websites. Some traders even host free and premium webinars. By attending those, beginners can learn how to pick the forex charting software for them. Learning from professionals who have in-depth knowledge, as well as experience in forex trading definitely helps.
With the right forex charting software, you cannot go wrong with your trading strategies. So, do your research well and pick the best forex charting software to trade in the forex exchange market.