This article looks at what an FX converter is and how you use it with forex trading.
The FX converter is a financial tool that many people will look at using at some point. The use of this tool is generally by people who are not trading on the forex market. However, there are many traders who consider the use of the FX converter with their trading. If you are one of these traders then you need to consider what the converter is and how you can use it. The use of the converter should be considered only in terms of the forex trading market.
What is an FX Converter?
An FX converter is an online device that allows you to convert a set amount of one currency into another in a theoretical situation. This means that you will place the amount of one currency that you want to change and set the currency you want to change it into. When the conversion is complete you will be given the value of the first currency in the second as per the market rates at the time of conversion. There is no actual conversion done when you use the converter.
What You Get With the Converter
When you consider the use of the converter you need to look at what you are going to be getting from the device. The converter can offer you the market foreign exchange rate. There are many converters that have charts you can use to map out the changes and historical information that you can use. The number of currencies that you are able to convert will vary depending on the converter that you are using. Some converters will have over 160 currencies and others will not.
The Use of the Foreign Exchange Rates
The first point that you need to look at when you consider the use of the converter is the rates that you are getting. As this is the primary use of the converter it is what you should consider first. The rates that you get from the converter could be used when you trade, but there are a number of other tools that you can use to get these instead. These other tools will often be faster and offer you additional information that you can use when you trade.
The Charts You Can Get
Many traders assume that the charts you get with the converter can be used with trading. The primary problem with this that the converter charts are usually line charts and these are considered to be too simplified for sufficient analysis. There is also the fact that you will not be able to apply technical indicators to the charts that you get with the converter.
The Historical Rates
The historical rates that you are able to get with the converter can actually be used with forex trading. The use will come when you are back testing the plans and systems that you will use. The charts that you get with the trading platform may not go back far enough for testing to be done. This is why you may have to use the information about the historical rates that you get from the FX converter.