How to Choose the Best Forex Analysis Software
Reading time: 8 minutes
This article will provide you with an overview of some of the best Forex analysis software, and will highlight the options available for traders of every level. We will look at: MetaTrader 4, MetaTrader 4 Supreme Edition, and TradingView.
It's fair to say that Forex (FX) is an attractive market, especially for novice traders. You can go short and long, you can use a margin on your trading positions, and there are lots of trading instruments available at your fingertips. Most trading is performed on a daily basis, which is also known as day trading, and this is where the analysis for the trends and patterns becomes vital.
MetaTrader 4 by MetaQuotes
When looking for the best tool for analysis of the Forex market, you don't have to go far. MetaTrader 4 (MT4) is an extremely popular trading platform among FX traders, providing the tools required for good market analysis. While some traders may be unaware of this platform, the vast majority of professional traders know and have experience with MT4, and it's the trading platform you can use if you are trading with Admiral Markets.
MetaTrader 4 comes preloaded with a range of effective and useful tools for successful trading. Of course, the most important element of MT4 is the amount of available trend indicators, oscillators, and indicators of volume. You may plot over 50 different indicators on your chart, and there is nothing to stop you from using multiple charts at the same time.
Another vital part of this Forex analysis software is the amount of time frames available. These tools are used to in order to plot the chart over a specific amount of time, and time frames are usually used in combination with Japanese candlesticks, where a candle displays the price ranges over a specific time frame. MetaTrader 4 enables you to plot data over nine different time frames, ranging from one minute to one month. This way, you can spot short, medium, and long term patterns.
Another advantage of MT4 in terms of its analysis capabilities is the number of graphical objects available that you can plot on your chart. This platform allows traders to easily draw support and resistance levels, as well as draw various shapes that could help with analysing the market. MetaTrader certainly offers users a great amount of Forex analysis tools, yet are there are even more items available if you trade with Admiral Markets using the MetaTrader 4 Supreme Edition plugin.
MetaTrader 4 Supreme Edition
Admiral Markets enables you to experience MT4 trading in a whole new way by providing a large amount of extra tools via its MT4 Supreme Edition plugin. Once you have downloaded it and installed it over your existing MT4 software, you will gain access to these additional tools. Some of these tools will help you execute your trades in a better way, like the 'Mini Terminal' feature, which is a major update in regular one click trading supplied by MetaQuotes. There are also additional tools that can extend your analytical opportunities.
The main Forex market analysis tools available with MT4 Supreme Edition add-on are the 'Market Sentiment Trader' and the 'Correlation Matrix'. The Market Sentiment Trader enables you to observe long vs short positions on a certain trading instrument, so you can preview the beliefs of traders, and see if these positions are going to be against or in favour of your potential trades.
By using this tool for the analysis of the market, you can gain extra knowledge about a particular currency pair, or other assets being overbought or oversold by the vast majority of retail traders.
The Correlation Matrix is one of the greatest Forex analysis tools, especially for beginners traders, as it demonstrates how the changes in the price of one currency pair are expected to be reflected in the price change of another asset. This is not a simple indicator, but also a matrix, as it also lists the changes over the available time frames.
This is performed because the correlation may differ drastically depending on the differing instruments and their individual time frames. Such a tool is especially useful for novice traders, as it will help in placing your margin to the assets with the desired level of correlation.There are of course more useful features in the MetaTrader 4 Supreme Edition plugin, yet not every of them is related to analysis of the markets.
Whilst you can trade from your desktop or your mobile application, you cannot trade without installing a program. If you are simply interested in the analysis, and not in the trading itself, you would still need to install MetaTrader 4 in order to benefit from the rich selection of Forex analysis tools.
TradingView is a browser application with powerful charting capabilities, so you can generally experience a great set of analytical tools, without having to install the entire app. However, you cannot trade from TradingView, so it is best used as an analytical tool in conjunction with a trading platform such as MT4.
When you are trading on MT4 you are provided with real time data, yet it can be hard to find live data feeds within Forex analysis software which are free of charge. TradingView supplies one of the best priced feeds, which will ensure your charts are updated regularly. It is also possible to sign up for a premium membership so your data feed is as fast as possible on all trading instruments.
Charting and indicators
TradingView also allows you to access an enormous amount of indicators, so you can perform much more detailed analysis. You can also select which types of charts to view, ranging from a regular line chart to, Japanese candlesticks. Users can also benefit from handy tools such as Fibonacci retracement levels. TradingView can provide you with some excellent, powerful analytical tools, but as previously mentioned, it is not a trading platform, and it best used as an additional tool.
What makes this application one of the best Forex market analysis tools available is its speed. You can easily apply indicators, customise your charts, and select new instruments quickly and efficiently.
Large and vivid community
As well as benefiting from improved analysis, you can also see thousands of traders performing their predictions with the help of TradingView Forex analysis software, and you can learn from their strategies. This way you can start relying on crowdsource trading ideas, instead of only focusing on the development of your own.
There are other alternatives to both MetaTrader 4 and TradingView available to traders, yet most of these tools are very specific, and limited in terms of their scope, or simply inferior in terms of their quality. As a novice or regular trader you will be much better off using the tools described in this article.
When searching for new Forex analysis tools, it might be worth considering custom expert advisors that you are able to find on the internet, or within the MetaTrader Store. It is advisable to actually look for custom indicators and useful tools of analysis, instead of trading robots. This way you will be able to learn and understand how to make the analysis better.
It is important to keep your trading simple, comfortable, and to have a necessary degree of clearance within your chart. There are plenty of Forex market analysis tools available to traders for free or for a small charge, yet you should only focus on the tools that can be considered as a valuable addition to your trading strategy.
It is also important to have either the majority of your analytical tools, or none of them at all, placed within your trading platform. Usually, if you have to balance between a few analytical tools, and then also perform an analysis on your trading platform, you may simply get lost in the overwhelming amount of data available. This is why you shouldn't really use more than two tools for your FX analysis.
The perfect environment for testing trading decisions has to be with a risk-free demo account, as it allows traders to test everything within a risk-free trading environment, and to trade with virtual currency, without putting their capital at risk.
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.