7 Reasons US Traders Choose FX Accounts With Advanced Tools

Some brokerage firms offer forex accounts featuring enough tools to open and close trades. In contrast, others feature more advanced built-in tools to access data and execute trades faster and more accurately. This article highlights seven key reasons why more US traders choose forex accounts with advanced tools. 

• Advanced Order and Position Book Tools

Forex accounts with essential trading tools may allow traders to open and close orders based on simple chart analysis. Traders who prefer to acquire deeper market analysis choose forex trading accounts with additional tools like order and position books. Top popular trading firms in the US, such as OANDA, provide advanced order and position books to enable traders to access information on open positions and pending orders. This information is crucial to determining the correct entry and exit prices less affected by volatile liquidity changes. Additionally, OANDA offers a unique Order Book indicator via a MetaTrader 5 portal so traders can get order and open position data from the MT5 terminal chart.

• Gathering Currency-Strength Data

Forex traders, especially those trading multiple currencies, choose forex accounts that compare the relative strength of different currencies per time to optimise their trading strategy. OANDA features a Currency Power Balance tool that traders can use to get a snapshot of the strength of various currencies against one another. Another tool peculiar to OANDA’s forex accounts is the Currency Strength tool, which complements the Currency Power Balance tool. It allows traders to compare the strength of a currency versus the base currency to aid in deriving more accurate trading signals. The Currency Strength tool works based on the 5-min trading chart and is mainly used by intraday traders. 

• Determining Correlation Between Trading Instruments

Forex accounts with advanced tools provide correlation tools to help traders identify which instrument moves in tandem with another. OANDA’s Correlation Tool uses an algorithmic-based correlation coefficient with three different values, 1,0 and -1,0, indicating a strong positive, zero, or negative correlation between assets. A strong positive correlation means the price of one asset moves in the same direction as the other. Conversely, a strong negative correlation means two compared assets trade in opposite price directions. In contrast, a zero correlation suggests there’s no particular similarity in the price trend of the two assets. Forex traders use the correlation tool to guard against overexposure by choosing assets with a strong negative correlation. Trading assets with a strong positive correlation at once increases risk when the market goes against an open position. 

• Gathering Risk-Reward Insights

Risk management is crucial in forex trading, especially when managing larger accounts. OANDA provides a Value-At-Risk tool that allows traders to make smarter trading decisions by effectively hedging against risk. Unlike the stop loss and take profit risk management tools standard in most brokers, the Value at Risk tool visualises an asset’s rising and falling trend based on a pip value projected to be held for a defined number of days. Forex traders use this tool to support technical analysis insights to predict the price direction of a trading instrument.

• Executing Trades Based on Insights From Volatility Data

Forex trading strategies differ. Some are based on trading assets with higher volatility, while others require less volatile markets. Traders usually opt for brokers that offer a volatility chart that allows users to compare an asset’s hourly, daily, and weekly volatility over time. Using the Volatility Chart tool, forex traders can glimpse an asset’s volatility and use the information to refine their trading strategy as needed.

• Assessing General Market Sentiment on Financial Instruments

A simple forex account may offer a general market sentiment, but advanced tools take it several steps further to provide instrument-specific sentiment analysis. For instance, forex traders can know which markets are bullish or bearish based on current open positions. Forex traders usually go for accounts with advanced sentiment analysis to get insights into the proportion of traders in long or short positions. This allows pro traders to identify the price direction an asset is likely to take.

• Get Real-Time News and Market Trends

Fundamental analysts depend on real-time news and data to decide relevant trading techniques. Forex brokers like OANDA feature a dedicated MarketPulse page for real-time news and trends across forex and stock markets. Additionally, forex traders can access the global economic calendar and live rates tools for enhanced fundamental analysis.

The Growing Demand for Advanced Trading Tools

Many forex traders rely on advanced tools to access comprehensive market insights for better trading proficiency. US traders have a plethora of forex brokers to choose from. Still, more individuals are going for those with advanced tools like the Currency Power Balance tool, Instrument-Specific Sentiment Analysis tool, and Value-At-Risk tool.