Trading forex can be difficult, especially if trading as a new trader. What most professional traders do is that they adopt a trading style to help them trade easily and safely. This is where being a day trader and a swing trader comes in. Day trading is a trading style that a trader adopts. Swing trading is also a trading style. To make any of the trading styles easy, traders make use of some tools. Let’s take a look at some of the trading tools used by these traders.

1.  Price Action

This is the starting ground of any tool that a day and swing trader can use. Price action is a price change on an asset over time. The price action and the chart will give the trader a proper plan on where to fix his trading position. Most day and swing traders use price action to decide their price action strategies.

2.  RSI Indicator

This trading tool was developed in 1970 to help make trading easier than normal. This tool helps traders know how a particular stock will perform over time. It is a tool that measures both the speed of the price of that asset and its magnitude. It can be very useful for a trader who knows how to use this tool. This tool measures the changes in price in terms of 14. How it works is when the asset price’s momentum increases, there is an active sale. Where it decreases, it means that the sales are not encouraging.

3.  Moving Average

This particular tool is one of the first technical tools to be designed. What the MA does ( as it is named) is that it helps traders blot out anything on the chart that is confusing to them. The moving average indicator calculates the average price of an asset within a period. Since MA’s are old, they tend to lag and depend on old price action.

4.  Volume

This tool is very useful to both day and swing traders. The trader on the chart can easily access this particular tool. It helps traders know how mature a new trend is. The volume indicator shows the trader how many people are trading in a particular market. When it rises, it indicates the number of buyers in the market and increases the price of that particular asset.

5.  MACD

This is short-termed for Moving Average Convergence Divergence. This particular indicator is more complex than the MA because it joins two basic moving averages. The tool functions when subtracting the twenty-six-period exponential moving average from the 12. Traders may choose to change this manually.

6.  BB

BB is the acronym for Bollinger band. The Bollinger band is made up of 3 lines, and these lines are a single MA and two standard deviations. The BB has many advantages for its users. These advantages include: the tool is clear on the chart and shows a trend quickly. This tool is useful to day and swing traders who like to trade short-term.

7.  Stochastic

This trading tool works almost the same way as the RSI. However, the major difference between the two is that the Stochastic tool has a different calculation. Another thing differentiating the two tools is Stochastic has two lines whereas RSI has just one line. On the Stochastic, the first line represents overbought trends, while the second line signifies a 3-day Moving Average.

8.  A/D Line

This indicator is similar to Volume. What makes it different is that the A/D line considers an asset’s trading range for some time. It considers the trading extent and the asset’s closing price. However, because the A/D line has better features than the Volume indicator, it does not mean it will work in all situations. The Volume indicator may work in situations the A/D line cannot and vice versa.

9.  Average Directional Index

This oscillator is simple to use. It functions as a trend measurement. The ADX is used to measure how strong a particular trend is. Whenever the Average Directional Index is more than 40, this shows strength in the movement it is going. It doesn’t matter the direction, whether up or down, in the direction of price movement. When it is less than 20, the trend is weak.

10.              Aroon Indicator

The Aroon indicator is used to check the security of a trend. It helps traders to know the amount of strength an asset’s trend has. The tool was created in 1995 by Tushar Chande. Traders can also know when new trends begin on the chart. When the lineup crosses the one down, this is a possibility that a new trend is about to begin. The line down can also cross the one up, staying close to 100. When this happens, there is a force in the downtrend.

11.              Fibonacci Retracement

Fibonacci retracement uses horizontal lines to show traders places that need support and resistance on the chart. This technical indicator has its name from the Fibonacci number sequence in mathematics. This is a good indicator, but not everyone knows how to use it because of how hard it is.

12.              Parabolic SAR

This is a highly recommendable trading indicator. The tool can be used to show price direction. Welles Wilder created the tool. This tool is shown on the chart with black dots that will either be higher or lower than the price.

13.              MFI

This is another technical indicator that is like the RSI. The MFI is, however, different from the RSI, showing both the Volume and the asset price. The tool has a warning sign showing traders that the market price is changing. MFI is best for stock assets.

Conclusion

There is no doubt that forex trading tools are helpful for every kind of trader, whether new or old. These are just a few of the best trading tools you can access on your trading platform, even if it is not an MT4 or 5. Learn how to use each of these tools by carrying out research.

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