Best trading tools to use when trading Forex in Philippines

Best tools to trade Forex in Philippines

Forex trading in the Philippines is a popular investment option. Many Filipinos are actively participating in the financial markets. 

Successful forex trading requires many factors such as skills, experience and education level of a trader, having working trading strategies, ability to manage risks, and having a discipline to manage emotions. 

Successful traders plan their trades and trade their plans. And trading tools play an important role in market analysis.

Forex trading tools and tips for Filipinos

Forex trading is complex as it requires analyzing large amounts of information. Currency prices are correlated with many factors such as commodity prices, indexes, economic and political conditions and so on. To make trade analysis easier, there are various Forex trading tools Philippines residents can use. Let’s discuss the most popular ones below: 

Economic calendars

A Forex economic calendar is a tool used by both fundamental and technical traders to stay informed about upcoming economic events and their potential impact on currency pairs. The calendar provides a schedule of important economic releases, such as central bank meetings and decisions on interest rates, inflation numbers (Consumer Price Index CPI), speeches by influential policymakers, and other important events that could impact currency prices. 

Fundamental traders that focus on economic and political events when it comes to making predictions on currency prices, heavily rely on economic calendars to make sure they are trading at the right time. Even purely technical traders that only use past price data to make predictions keep an eye on economic events, due to many reasons. Market events can increase volatility and unpredictability short term, for this reason, technical traders avoid placing orders during and prior to major news announcements. Economic calendar is one of the most essential trading tools for beginners in Philippines.

It’s important to note that economic announcements often have unpredictable consequences, especially short term. The reason is that many traders avoid trading before and during major announcements and volatility increases. In addition, many traders open orders in advance and use hedging strategies. Analyzing key economic events is more predictable long term as there is less market noise. 

FX trading journal tool in Philippines

A trading journal helps traders keep track of their trades by documenting each order. Trading journals are essential for successful trading as it helps traders learn from their own mistakes and upgrade their trading strategies. In addition, trading journals boost accountability and urge traders to treat trading professionally. Trading journal is a must-have Forex tool for trading in philippine. Here are some of the key elements of trading journals: 

  • Order details: trading journal should include date and time of each trade, the currency pair traded, exit and entry points, the position size, and the trade direction. 
  • Reason behind the trade: you should describe the rationale behind the trade, including reasons for entering a trade, reasons for exit and market analysis. 
  • Trade management: document how you were managing the trade, such as stop loss/take profit targets, trailing stops and partial position closures. 
  • Include before and after sketches or screenshots of your trades to make analysis easier for the future. 
  • Describe market conditions: There are uptrending, down trending and ranging markets. In addition, volatility and liquidity can also be mentioned. This information will help you determine how your strategies work in certain market conditions. 
  • Describe how you feel before and after a trade: feeling tired or unmotivated to trade might result in losing trades and your trading journal analysis will uncover it for you. 

Best indicator tools for FX trading

There’s no such thing as the best indicator. Each trading indicator serves a purpose and notifies traders about certain areas. Indicator tools that help FX trading Philippines come with trading platforms. In addition, you can purchase them online. For instance: MetaTrader platforms offer the widest selection of indicators in Meta Market. Here are some of the most widely used tools for Forex trading Philippines residents can use: 

  • Moving Average (MA): moving averages smooth out price data on charts and provide traders with trading signals for entering trends. Keep in mind that the indicators fail to provide profitable signals in ranging market conditions. Two most widely used MA-s are Exponential Moving Average (EMA), and Simple Moving Average (SMA). The EMA is more preferable for active traders as it puts more emphasis on recent price trends. 
  • Relative Strength Index (RSI): The RSI is a momentum oscillator that is widely used for trading ranges. The indicator measures the speed and change of price movements. It helps identify overbought and oversold conditions on the market and signal reversals. 
  • Bollinger Bands: Bollinger Bands help traders measure volatility. The indicator consists of two lines. These lines show upper and lower volatility levels. 
  • MACD (Moving Average Convergence Divergence): MACD is one of the trend following tools for FX trading Philippines residents can use. The indicator shows the relationship between two moving averages. MACD helps identify trend reversals, bullish and bearish crossover, and divergence patterns. 
  • Fibonacci Retracement: Fibonacci retracement levels are highly popular among traders. The indicator helps identify potential support and resistance levels. Traders use these levels to anticipate potential reversals.
  • Stochastic Oscillator: The stochastic oscillator is one of the top Philippines day trading tools to use. Often the indicator is used in combination with volume indicators. It measures the momentum of price movements and identifies overbought and oversold conditions. 
  • Average True Range (ATR): ATR measures the average true range between high and low prices. The indicator helps traders assess potential breakout levels. In addition, ATR helps set proper stop loss and take profit targets and assess volatility levels. 

Important things to know before using trading indicators

As already mentioned, each trading tool is built for a reason and displays certain information for a trader. In addition, traders need to understand that while indicators are highly useful, overuse of indicators can be dangerous. Many traders use multiple indicators in combination. However, the more indicators you use, the more confusing and overwhelming trading signals are going to be. Some indicators will tell you to buy an asset, while others will tell you to sell at the same time. This leads to analysis paralysis. It’s important to only use indicators that give you valuable information for trading a given asset and market conditions. 

Key takeaways

To sum everything up, trading tools play an important role in market analysis. Traders have access to economic calendars, can use trading journals and trading indicators. It’s important to note that each trading indicator measures certain things and is built for trading certain market conditions. And therefore it’s best to use them in context and avoid overusing them to protect yourself from analysis paralysis and make sure to make good profits. Some of the most common indicators are: Moving Averages, Relative Strength Index (RSI), Bollinger Bands, MACD (Moving Average Convergence Divergence), Fibonacci Retracement, Stochastic Oscillator, and Average True Range (ATR).

FAQs on Best trading tools to use when trading Forex in Philippines

What is the best tool for trading Forex in Philippines?

There is no such thing as the best tool. Trading tools are designed to aid traders in particular situations. Therefore, it’s best to use trading tools in conjunction with one another when making market decisions. For instance, trend trading indicators will not help you trade choppy and ranging markets. Trading tools should be applied based on given circumstances. 

Should you use trading tools when trading Forex in Philippines?

Yes. Both technical and fundamental traders are using trading tools to analyze markets, their own trades and improve their trading strategies. Fundamental traders rely on economic calendars, news and corporate calendars to make informed decisions. While technical traders are mainly focused on technical indicators and technical tools. Both types of traders use trading journals to learn from their own mistakes and improve results.

What is No 1 indicator for Forex?

Depends on the context. When it comes to trading ranging and choppy markets, traders are using oscillating indicators. For trading trends, it’s best to use indicators that measure average prices such as Exponential Moving Average (EMA), and Simple Moving Average (SMA). In addition, volume and volatility indicators are also highly useful. Volume indicators in particular help traders spot the best entries and exits. Keep in mind that if you use a trend trading indicator in ranging market conditions, you will receive a lot of false trading signals.

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