What is 'Forex Forecasting Software'

Forex forecasting software is an analytical tool used to help currency traders with foreign exchange trading analysis through charts and indicators. Forex forecasting software provides graphs of currency pairs that display price changes over time as well as indicator overlays including moving averages, which help analysts and traders to determine appropriate and profitable entry and exit points for their forex trades. As with charting software used for trading other securities, forex forecasting software is applied primarily by technical analysts to forecast future price movements.

BREAKING DOWN 'Forex Forecasting Software'

The forex market is always changing and challenging to predict. Forex forecasting software, while not guaranteed to be entirely accurate, makes it easier to apply technical analysis, and make predictions about the market's direction. This information is helpful to individual traders, looking to minimize losses and maximize profits. 

Forex forecasting software incorporates data from various sources. The data may include the gross domestic product (GDP), inflation deflectors, stock prices and consumption. Different suppliers of this technology will offer various features and software functionality. Some versions of the software are available online for free, and many brokerages provide a version of this software for their clients. 

Users may analyze charts and indicators which will help them make predictions about currency and price movements. Most commonly, chartists or technical analysts, many of whom are day traders, use the software to make their predictions and stay on top of the complex and ever-changing forex marketplace. Chartists can apply this technical information to any market which involves the trading of financial instruments, including equities, currencies, commodities, and bonds. 

How to Choose Forex Forecasting Software

There is a wide range of forex forecasting software used for currency prediction, and for analysing other markets. Each will vary in appearance and functionality. Users should look for several things in forex charting software, including:

  • Is it free, or if there is a nominal charge?
  • What are the additional features available?
  • What technical indicators are available?
  • Is the software Windows, Mac or web-based?
  • Can you trade from the charts?
  • Is historical data made available through the software?
  • Is the graphical user interface visually pleasing and easy to read?
  • Is the graphical user interface conducive to monitoring a lot of information at once?
  • Are tutorials available?

Most forex brokers allow you to open a demo account before funding a standard or mini account. This try-it-before-you-buy-it option will enable users to try out each broker's software during a trial period and determine which software and broker best suit their needs.

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