This article looks at the FX converter and what points to consider when choosing one.
If you are looking to enter the foreign exchange market, it is highly recommended that you use an FX converter to obtain accurate rates. This is a highly convenient trading tool which can be used for trading analysis. Before the introduction of the FX converter, individuals were required to deduce figures manually. Although possible, it took a longer period of time and was generally less accurate. In order to use the FX converter you must be aware of what a converter is, how to use it and what it role is in the market.
The foreign exchange trading market
The foreign exchange market is a place to trade foreign currencies. This is where traders will exchange one currency for another currency using currency pairs. Each currency pair is made up of a base and counter or quote currency. The base is usually the value of one unit of the counter currency.
Foreign exchange trading can be conducted in two ways, trading online with a platform or via a forex broker.
1. Trading with an online trading platform
The majority of traders will use this method of trader due to its convenience. It is completed using real time and can be conducted from any location. The trading platforms will offer various facilities which should be used to enhance trading. However, it is important you only use the tools that are compatible with your trading style. The trading platform most suited to your trading should be one you can navigate easily and are comfortable with.
2. Trading with a forex broker
Forex brokers are utilised in a similar manner to stock brokers. By using this method you do not have as much control over your trading capital and trades. This may be time-saving, but can lead to losses if your broker is inexperienced or unreliable.
The FX converter
When beginning on the foreign exchange market you must be aware of certain FX factors. One of these factors is the cost of trading. It is important that you consider all costs of trading tools and examine as to whether they are worth their fee. The majority of FX converters are free of charge meaning you do not have to pay a subscription fee to use them.
There are two aspects of an FX converter which must be looked at when perusing FX converters. These are the currencies the converter is able to convert and the quality of the information provided.
1. The currencies being converted
The foreign exchange market allows trading of all global currencies. Unfortunately, not all FX converters have the ability to convert all these currencies. The majority of the sophisticated converters will offer information on approximately 150 currencies, whereas the basic items will focus on the major currencies exclusively. When examining converter options you must note the currency pairs you are trading and find a converter to suit your needs.
2. The quality of converter information
The more sophisticated the FX converter, the greater the quality of information provided. Some converters will present the option to convert currencies exclusively, whereas others will display options of conversions along with currency movement graphs. You must consider what you will be using the tool for when looking at the sophistication of your converter.
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