When you start to trade Forex, you will discover that success depends on making choices based upon certain rules. These rules are usually delivered by your trading strategy, as there is no successful trader that could achieve consistent profits by predicting the market moves on his own. When developing a trading strategy, many people rely on technical analysis. If you imagine that Forex trading is a job, you can always count on doing your job better when the right set of tools is available to you. This is where Forex technical analysis software comes in handy. With great software you can eliminate the need for unnecessary calculations, determination of vague patterns and generally improve your strategy from a technical perspective. What you have to remember is that such analysis can either be favourable or unfavourable for you, depending on the set of tools you are using.
In this article, we will highlight the most important and the most widely used tools for technical analysis and we will also explore how you can choose the best one. Even though you can test drive the tools reviewed in this article, it is vital for you to understand what the characteristics of useful Forex analysis software are. As the industry constantly evolves in terms of technology, it is much more important to be able to differentiate between useful and useless software, than to simply know a list of the best Forex technical analysis software available. Let's take a look at the best pieces of code available for Forex traders - and then see what it is that makes a piece of technical analysis software truly efficient.
One of the best tools for technical analysis is available right at your fingertips. If you are trading Forex online, you will probably already be familiar with MetaTrader 4. Don't worry if you're not - you can sign up for a demo account here. You can access a great set of technical analysis tools with MetaTrader 4, so before you look elsewhere for other tools, it's worth mastering this trading platform first. You might find you have everything you need here. So what has MetaTrader 4 got to offer in terms of Forex technical analysis software?
When it comes to trading, one of the most important items for analysis is the availability of timeframes. Whilst indicators are important, it is much more important to be able to have the entry and exit signals confirmed on more than one timeframe. With MetaTrader 4, you can access up to nine timeframes, so you can easily assess and analyse trends. This is a very useful feature for technical traders.
This is of course a vital tool for many, if not all, Forex traders. With MetaTrader 4 you can access over 50 different indicators that can highlight trends, volumes and many other important pieces of data for your technical analysis. In addition to this, you can fully customise the indicators, so you can for example change their colours and change the data (periods) used for calculations. This what makes MT4 indicators superior to many other Forex trading technical analysis software. What is great for novice traders is that the platform is supplied with these indicators without requiring any further effort from the trader, so you can start with technical analysis right away. Advanced traders will find custom indicators quite handy, as they make it easier to customise their trading strategy and perform more sophisticated technical analysis.
This type of tool is also very useful for technical traders. Even though you are not able to define exit and entry points, with graphical objects you can define support and resistance levels and apply various shapes on your chart to improve your analysis.
There are many other benefits of MT4 for technical traders. Above we have described the major ones. Now let's take a look at another item from the list of the best Forex technical analysis software.
This is a great tool for traders who are looking to increase their understanding of patterns. The main advantage of this technical analysis tool is that it is available as a web application, meaning you can easily access it via your browser. This is quite handy, as no download or installation is required. Apart from that, another advantage of Autochartist is that it can be easily integrated with MetaTrader 4 via the use of a plugin. This way you get to enjoy a superior pattern recognition tool inside of a robust trading platform with great analytical tools.
So how does Autochartist work? The main point of Autochartist is to recognise technical patterns automatically. Many traders have heard of the rising wedge, head and shoulders, flag, false flag and many more. While it may take some time to understand these patterns, it can take even longer to develop the skills needed to recognise them. With Autochartist this is done automatically. The software scans the charts and tells you whenever a certain pattern is identified over a certain timeframe. This way you can easily learn about the patterns and their meanings, and eliminate unnecessary time spent trying to identify the patterns. This certainly makes Autochartist one of the best Forex trading technical analysis software available.
This tool is especially useful for traders that employ Elliott Wave Analysis in their trading strategy. With the help of MotiveWave, a trader can advance his knowledge and understanding of EW analysis and rely on the complex data derived from the sophisticated algorithms.
Since MotiveWave first appeared online, it has developed quite well. Now it not only offers EW analysis and Harmonic Patterns, but also supplies a large amount of studies.
Unfortunately this piece of software comes with two disadvantages. First of all, it comes either as a Windows program or a Mac application. This is not a major issue for most traders, yet you would need to spend a little time downloading and setting it up. Secondly, as the software is quite powerful it doesn't come for free. It starts at 100 USD per month, but a free 14 day trial is available. If you are just starting to trade Forex online and are curious about wave analysis, you should take a look at Admiral Markets Wave Analysis section to save money.
This wraps up our Forex technical analysis software review. Now let's take a look at how to differentiate between a good piece of software and a redundant one.
When it comes to selecting technical analysis software, there are a few things you need to bear in mind. The software can either add more clearance to your chart, or can actually add so many items that every sign of clearance will be removed. This is why technical analysis software for Forex trading should be chosen with care. Let's take a look at the most important factors for choosing the right Forex trading technical analysis software.
Software is designed to either automate or improve your trading strategy as a whole or partially. This is why you should only look into such software once you have an established trading strategy. It makes little sense to get software which you do not understand, while hoping that it will just do the analytical job for you.
Your trading platform should be your ultimate tool for technical analysis, as it would be pretty hard to separate analysis from trading. This is why it is important to choose an advanced trading platform straight away. For this reason, it is advised to start using the MetaTrader 4 platform. Although the trading platform is important, some tools could prove to be useful when used alongside it. It is best to pick up the tools that are available as MT4 plugins.
If the software is not available as an MT4 plugin, you may still benefit from it, if it comes as a web application. It might be not as convenient, especially if you are trading on a single screen, yet if the tool is available without an installation - it is a strong advantage.
While there are certain pieces of software that come as suites, it is best to pick up a tool that can efficiently complete one job. In other words, it is better to have one analysis completed in a good way, than ten completed in a mediocre way.
We hope you have enjoyed this Forex technical analysis software review. Good luck with trading, and remember to use only verified tools for technical analysis that you understand.