Charting software is one of the first tools a trader will need to get familiar with. Starting off in the world of forex as a beginner can be quite daunting. Having the right set of tools to progress, and profit from it will be one of the keys to success.
Forex trading is mainly conducted online, so there are many online platforms that one can use to trade Forex. These online platforms act as online brokers that you can utilise to execute, track, and analyse your trades.
A broker will often have pre-installed a variety of tools for you to use into their platforms. One of the main tools that almost every platform will provide will be charting software.
What is charting software?
Charting software is a piece of software that is accessible directly to you either via desktop, or by the newly popular mobile apps. Charting software allows you to check and chart the different markets that you are trading in visual form.
The charting software will have different types of charts and overlays that will enable you to more easily spot the trends. This helps to see when the optimum time would be to enter or exit a trade.
Different charting software has different trend analysis tools that you can use for key decision making. Choosing the one that you gel with best will not only increase your profitability, but give you a smoother user experience.
With the explosion of the digital world and now the movement towards online trading rather than the traditional face to face brokers, there are now many different charting software available to you. Selecting the right one that works for you can really up your trading game.
Why use charting software?
One of the main advantages of charting software, is that you have access to vital trading information at your fingertips, in real time. With the fast paced world that is forex trading, it is important to have real time access to the movements of the markets. This will help you make hard and fast decisions.
Most software will have both desktop versions and mobile app versions to make trading much easier. They are also usually completely free, either as an add-on piece of software, or directly provided by the broker platform.
Charting software is often provided as an extension to your online broker, connecting your online account with the software that is tasked to chart and analyse your chosen markets. Some brokers will provide a whole range of charts and overlays, whereas others are far more stripped back.
You will find more detail on the brokers you can trade with and their platform support here.
What does this software look like?
As you might assume from the name, charting software looks like charts. There are however different visual styles of the charts. Lines, bar charts, and candles are the most commonly used visual representations.
You will usually find on each chart the option to view open price, close price, high point, and low point. As you will see above, this is usually easier to interpret using candlesticks. Candlesticks are a key component to many a trading strategy, and would not be possible without charting software.
Some of the best free options
There are plenty of different options for you to use for charts. As mentioned earlier in this guide, most of the brokers will provide you with charts that are more than sufficient for your requirements. If for whatever reason, that is not the case and you would like a separate piece of software, take a look below at some of the best free charting software options available on the market.
Turning charting software into a trading robot
Many traders use charting alongside predictive forecasting software. Forecasting software has preset patterns installed, or algorithms which allow it to spot patterns. This when combined allows innovative automated trading, or robo trading, where you can set your entry and exit positions and they will be automatically executed on your behalf, or trigger an alert for you to take action.
Automatic trading may sound a bit daunting to some beginner traders, but more experienced traders may find it highly useful.
If you already have a solid plan on how to execute trades, you could set all your trade parameters and go to sleep and wake up slightly richer. There are trading algorithms that remove your need for a plan, provide that is, you find a provider with a plan you can trust!
For those traders that may not want any trades being activated without their prior knowledge, alerts can be set to warn you of potential profit making recommendations instead. You can then choose to make a manual decision, or not. This then becomes more similar to trading signals, which is another very useful tool kit item.