Forex trading takes place in a competitive arena. Every trader is looking for awesome forex trading tools to help them. Even better if they are free.
Here you can find updating free and sometimes paid forex trading tools that are easy and practical to use.
The Forex Volatility Calculator
Traders thrive on volatility. A stagnant Forex pair offers little room for profit. Hence, forex traders need to know which currency pairs are volatile and their active trading hours.
There are dozens of currency pairs out there. Computing their volatility is not an easy task for the manual trader.
This is why you need the Forex Volatility Calculator at Investing.com. This essential forex trading tool calculates the volatility of 30 currency pairs using historical data (up to 54 weeks).
It shows the daily change in pips and percentage of each forex pair in a nice table. What makes this forex trading tool so useful are the complementary graphs shown below.
Forex Volatility Tool – Daily Volatility
Trend of daily volatility over 12 months
Forex Volatility Tool – Hourly Volatility
Hourly volatility is especially useful for deciding what time of the day to trade.
Forex Volatility Tool – Weekday Volatility
If you want to take a weekday off trading, don’t make it Thursday. High volatility points to more trading opportunities.
Currency pairs are permutations of different currencies. Hence, we expect them to correlate in their price changes. Understanding the correlations among currency pairs is critical if you intend to trade more than one pair.
For hedging, look for negative correlation.
For diversifying, look for near zero correlation.
For increasing exposure, look for positive correlation.
If you don’t pay attention to currency correlation, you might just end up hedging your position without realising it. (Kathy Lien has an informative article on currency correlation at Investopedia.)
While you can calculate the correlation between currency pairs yourself using Excel, the forex broker Oanda offers a slick Currency Correlation tool that measures historical correlation up to 1 year.
This forex trading tool includes an impressive array of major currency pairs, exotics, and even metals. The Bubble and Heatmap offer friendly visuals. For the numerical values, choose to display in Table format.
Currency Correlation Tool
Red is positive correlation. Blue is negative.
This Currency Correlation tool is part of the suite of tools at Oanda Forex Labs where you can test drive and give feedback on Oanda’s latest forex trading tools. You can use most of the forex trading tools for free even if you are not Oanda’s customer.
Time Zone Converter for Forex Market hours
The major forex trading centers are New York, London, Tokyo, and Sydney. Many traders do not stay in any of these cities and need to keep tabs on different time zones.
And even if you do, you will still need to keep track of the time in other major currency markets. This is because the opening range of each market sets the tone for each session, and the overlapping hours tend to have more trading setups.
Some forex traders speculate on news and reports. Others avoid trading when important reports are flowing into the market. In any case, traders must keep an eye open on scheduled reports that might impact the Forex market.
Forexfactory has the best forex calendar – check it out here
This calendar is a must-have forex trading tool.
Position Size Calculator
To trade safely, you must know your risk per trade. Risking a fixed percentage (up to 5%) of your trading account is a good strategy for long term investing. more risky and experienced traders are risking up to 25% of the account capital but even that is usually done on a very short time frame and very close monitoring (hand on the gun)
In forex trading, this seemingly simple fixed percentage position sizing decision becomes complicated. This is because you need to consider your forex trading account’s base currency and the current price of the currency pair you intend to trade.
Babypips Position Size Calculator offers a simple forex trading tool to handle the calculation for you. You just need to key in the following information: