What is a Forex Calculator, and What Benefits Can This Software Provide?

TIMESINDONESIA, JAKARTA – There are many types of assets which attract investors from all walks of life. Some offer stable returns from a long-term perspective, and others are more suited for those seeking to capitalise on short-term market movements. Although the Forex (currency exchange) sector caters to both sides of the spectrum, many traders are attracted to its inherently liquid nature.

Still, appreciating the more technical aspects of Forex trading can be challenging; even for seasoned investors. One of the ways to take some of the guesswork out of the equation involves a tool known as a Forex calculator. How does this software work, what functions can it provide, and why do so many investors include this utility within their overall trading strategy? Let's take a look at the basics.

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The Main Purpose of a Forex Calculator

While somewhat of a novelty in the past, trading online has become extremely popular throughout Indonesia. However, we need to remember that executing a Forex position will often require on-the-spot insight. This is unlike many traditional holdings such as blue-chip stocks that may be passively monitored for months (or even years) at a time when accruing long-term growth.

The primary intention of a Forex calculator is to quickly perform many of the laborious tasks that would have been performed manually in the past. Here are three common examples:

●    Determining how much a specific pip movement is worth (in terms of profit).
●    Calculating the size of a specific Forex position.
●    Finalising how much money needs to be spent to profit from a trade (known as the margin).

Unlike humans, Forex calculators will never make mistakes, they function on a 24/7 basis, and they are extremely accurate. It should also be mentioned that the investor does not necessarily have to possess in-depth technical expertise to use the tools described above.

Addressing Leverage

Leveraged trades are not limited to the Forex marketplace. They are also commonly used when dealing with other assets such as contracts for difference (CFDs) and exchange-traded funds (ETFs). Leveraged trading is a means to access a larger position without needing to invest the entire amount. The obvious advantage here is that sizeable profits can be amassed within a relatively short period of time.

However, leveraged positions are not without a fair share of risk. Assuming that the trade does not perform as expected, investors can also lose a significant amount of operational capital. This is why in-depth research should always be performed, and one strategy involves the role of kalkulator leverage trades.

Forex leverage calculators will display the amount of money needed to open a position based on the leverage (and lot size) offered by an online broker. Without become too technical, here are the primary values that will be entered into a calculator to determine the capital needed to open a position:

●    The currency of the account.
●    The currency pair (such as USD/GBP).
●    The size of the contract (also known as the number of units).
●    The desired trading margin.

Once these are provided, all calculations will take place automatically. This streamlined process is excellent for those who are comfortable with leveraged trades.

Additional Advantages to Highlight

Most experts will cite the ability of these calculators to lessen the amount of risk associated with a specific trade. In other words, users are able to set specific limits regarding how much they are willing to lose in the event of a worst-case scenario. Calculators can therefore act similarly to traditional stop-loss tools.

The fast-paced nature of the Forex ecosystem often demands that decisions are made within minutes, or seconds. Calculators can expedite many processes that will be required before opening (or closing) a position. This could very well determine the difference between a profit and a loss.

Finally, the majority of modern calculators have been designed with a user-friendly interface. Traders will simply have to enter the appropriate data into the required fields. The software then performs the predefined action; providing results within seconds.

Another String to the Bow

Forex calculators represent invaluable utilities when used in synergy with other tools such as real-time candlestick charts, social media trading circles, and quality multi-asset wealth management platforms. It pays to take advantage of the latest options, and the versatility of these calculators will continue to attract investors from all walks of life.

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