If you’re new to trading foreign exchange (forex), you’ll likely have come across more than a few new terms and features to keep track of. For example, have you ever heard of a forex screener?
Getting into forex might seem complex, but breaking down the terminology and how the markets work is simpler than you might think.
In this guide, we’re going to look at what a forex screener is, what this type of platform does, and why you might want to use one if you’re browsing the markets regularly.
What is a forex screener?
A forex screener is a software system that traders use to find opportunities in foreign exchange.
Screeners typically break down the value of specific currency pairs and filter out different technical indicators and trends. Think of a forex screener as a dashboard that provides traders with access to all the data they need to make buying and selling decisions.
Screeners work in real-time, meaning that traders can simply toggle the features they want to filter in and out and track specific pairs they find most interesting – such as GBP/USD.
Why might you use a forex screener?
Forex screeners are popular with trading newbies and experts alike. For new traders, forex charts provide in-depth insights that tell them which pairs are worth investing in, and which might not be so profitable.
Of course, forex changes dramatically over time – even from day to day. Experienced traders rely on objective data available through forex screeners so that they can be more confident in their buying and selling decisions.
For example, a typical forex screener might give you a list of different currency pairs, and tell you the change in profitability from day to day. Screeners also arrive with buy and sell indicators, should you need assistance in making difficult decisions.
Screeners provide fantastic support for traders, helping them to make fast decisions when markets are operating at a blistering pace.
In a similar way to how traders have developed trading bots for cryptocurrency, forex screeners help to take away many of the human elements involved in financial decision-making.
How do I get started with a forex screener?
Before getting started with a screener, you should ideally have a forex trading strategy in mind. Once you’ve decided on your risk tolerance, you need to decide which parameters and indicators you want to set when browsing a screener.
For example, you might want to filter specific currency pairs and use an indicator such as a moving average, which gives you a clearer picture of a pair’s performance over time.
Once you’ve chosen the settings you would like to apply, run your screener and look through the results. It requires a bit of analysis, but screeners are built to offer lots of data in a user-friendly setup.
Then, execute the trade you would like to pursue, and repeat the process when you would like to make additional trades.
Getting started in forex might not be complex with a screener, but remember, there’s never a guarantee of returns on trades. Trade responsibly!
