Whether you are a seasoned trader or relatively new to the forex market, having some extra helping hands on deck is always helpful. After all, forex trading can be a lucrative way to earn a living, but it also involves a great deal of risk. To maximize your profits, you need to have the right tools at your disposal. With so many trading tools available, it can be difficult to know which ones are the best for your needs.
In this article, we've compiled a list of the top smart trading tools for maximizing your profits with Forex prop firms. From advanced charting software to cutting-edge AI algorithms, these tools will give you the edge you need to stay ahead of the competition and make smart, profitable trades.
Before you even begin to invest in smart tools when trading with proprietary firm funds, you might wonder: Why should I even consider using smart tools?
Afterall, you can always be conventional and carry out your trades the old way, right? The answer to that is yes, you can, but who doesn’t like help/better odds! Given below are some benefits of smart trading tools for maximizing your profits with forex prop firms:
Given below are the 7 best tools for maximizing your profits with forex prop firms:
In the forex trading world, a picture is worth a thousand pips. Charting software paints the financial canvas with vibrant colors, helping traders visualize market trends, spot opportunities, and make sense of the burstiness in price movements.
Practically speaking, such software will give you the benefit of advanced technical analysis. When handling prop firm money, many new traders might be under some pressure of hitting deadlines and gaining consistent profits. A charting software helps you manage risk like a prop by identifying key support and resistance levels.
Another good use case of a charting software is when your FX chart software is not available on a certain device. For instance, FX prices and charts are often not available for users who are on a Chromebook. In this case, they can benefit from an alternative forex graph that shows trading charts as a web application.
Here are some of the best charting software recommendations:
One popular strategy that utilizes charting software is the Moving Average Crossover strategy, which can be integrated into your own forex trading regime as follows:
AI algorithms in forex trading are cutting-edge tools that leverage artificial intelligence to revolutionize how traders analyze the market, make decisions, and execute trades. These algorithms are designed to learn from vast amounts of historical and real-time data, identify patterns, and predict future price movements with incredible accuracy.
Gone are the days when the forex market was characterized by trades conducted over the telephone. With the technological advancements we have today, forex traders using prop firm resources can now automated the whole process if they wanted to.
These models can process vast quantities of data, identify intricate patterns, and make connections that human traders might overlook. Furthermore, AI algorithms can integrate multiple sources of data, including economic indicators, geopolitical events, and market sentiment, to forecast market movements more accurately.
One such example is the Medallion Fund, managed by Renaissance Technologies, a quantitative hedge fund founded by Jim Simons. The Medallion Fund has been consistently profitable since its inception in 1988, with an average annual return of around 66% (before fees) from 1988 to 2018. The fund uses AI algorithms and complex mathematical models to analyze vast amounts of financial data and make trading decisions.
Renaissance Technologies employs a diverse team of mathematicians, physicists, and computer scientists to develop sophisticated AI algorithms that analyze market patterns, trends, and inefficiencies. By rapidly processing and learning from vast amounts of data, these algorithms are able to identify profitable trading opportunities and execute trades with precision and speed.
AI algorithms also offer you a set of specific rules which are designed to carry out trades within a function such as timing, price or quantity.
Some common use cases where AI algorithms might help you are:
Best options include:
These programs are designed to execute trades without human intervention. This system will always rely on predetermined rules and strategies based on fundamental analysis to make trading decisions. Here is an overview of how to implement an automated trading system in forex trading:
You will need the following:
Our recommendations for automated trading platforms are:
Note: Even though automated systems do not require human intervention, be sure to always double check everything. Any AI will need periodic monitoring and maintenance to run smoothly and adapt.
Prop firms provide various educational resources to help their traders learn, improve, and excel in the financial markets. This ranges from things like training programs in risk management, technical analysis, etc. to mentorship, and seminars. Many firms also give you access to trading tools and platforms like Bloomberg terminals, advanced charting software, etc.
That said, the effectiveness of this depends on the trader’s level of engagement and willingness to learn. You will be able to up your skill consistently as long as you keep reviewing and adapting your process.
As the name suggests, this tool will automatically replicate trades executed by one account, often known as the master account into another account. This enables traders to copy the trades of more experienced or successful traders in real-time, leveraging their strategies and expertise.
The trade copier connects the master account with one or more accounts through a trading platform, such as MetaTrader 4 or 5, or via an external service provided by a third party. It monitors the master account for any new trade activity, including opening or closing positions, modifying stop-loss or take-profit orders, or adjusting trade sizes.
When a new trade or modification is detected, the trade copier replicates the same action in the connected slave accounts, typically with adjustable settings for risk management, such as adjusting the trade size according to the follower account's equity. Trade copiers can be helpful for novice traders looking to learn from experienced traders, busy traders who want to diversify their portfolio, or account managers handling multiple client accounts.
Our best picks include:
A Virtual Private Server, or VPS as we like to call it in the trading world, is kind of like your own little personal assistant that runs your trading stuff for you day and night. So, imagine having this cool remote server that lets you carry on with your trading strategies, even when you're not glued to your computer screen or having a bad internet day.
Now, as a trader, you might be wondering why you need a VPS, right? Well, it's super helpful for making your trades lightning-fast, not to mention it's always there for you, even when your computer decides to take a break. Plus, you can sneak a peek at your trades from anywhere, as long as you've got an internet connection.
Some best options include:
Oh, you know what's super handy for forex traders? An economic calendar! It's like your very own crystal ball that gives you a heads-up on all those important financial events and announcements coming your way. Think of stuff like GDP, inflation rates, job reports, and even what the central banks are up to. Traders love it because it helps them stay on their toes, dodge market surprises, and jump on those sweet opportunities.
You can find some good ones on Forex Factory, DailyFX, MyFXbook and BabyPips.
That was a roundup of all the smart trading tools you can use to maximize your profits when forex trading with prop firms. Remember, to learn how to find the perfect balance between trading aggressively and managing risk.
“In trading, you have to be defensive and aggressive at the same time. If you're not aggressive, you're not going to make money, and if you're not defensive, you're not going to keep money." – Ray Dalio