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Forex: Tools of Trade

Although success in Forex trading is largely associated with the trading strategies and systems that can usually be bought for money, those are not the actual tools of a Forex trader. They can only be considered as "shortcuts to riches". Every professional should employ his or her own tools of trade, and Forex traders should have them too. Independent on the professionalism level of the trader, these tools help to analyze the markets and calculate all the necessary numbers for sound money management and prudent position sizing:

MetaTrader 4 platform — perhaps, the most important of the tools, a successful Forex trader should be aware of. Even if you do not trade with a MetaTrader broker, you should still download this free platform and use it for charts and technical analysis. With MetaTrader, you can browse charts and the past history of almost all currency pairs. You can apply dozens of standard indicators and use a lot of custom user-tailored indicators. You can backtest strategies using the platform's strategy tester and forward-test your systems and expert advisors on free demo servers. MetaTrader is your number one tool if you want to go beyond the beginner level in Forex.

Position size calculator — a helpful tool if you prefer to know the optimal size of your trade before opening a real money position and manage your risks correctly. This calculator will work with hundreds of currency pair and account currency combinations. It will give you output results in standard lots and currency units.

Pip value calculator — it is not a trivial task to calculate the value of a pip if you trade exotic currency pairs and/or have your trading account in some exotic currency. Understanding the value of the pip is important to accurately calculate your profits and losses. The online pip value calculator will help you to determine the cost of a pip with minimum efforts from your side.

Pivot points calculator — this tool will be useful to you only if you prefer to trade using technical pivot levels. There are many types of pivot calculators available — floor pivots, Tom Demark's pivots, Camarilla pivots, Woodie's pivots, etc. I suggest using the online pivot point calculator, which combines the calculation of all the possible pivot point types.

Fibonacci calculator — if you trade via the MetaTrader platform you do not need a separate Fibonacci calculator because you can use the standard indicator to build Fibonacci retracement levels. But if you use a web-based or some other inferior platform, you will enjoy calculating the Fibo retracement and extension levels with this online Fibonacci calculator.