What Uses an FX Converter Has for Traders
An FX converter has a number of uses for the forex trader. While this piece of software was not created with the trader in mind, you can still use it at certain times. It is important that you know when you should be using an FX converter and what you can use it for.
The Converting of Currencies
As the name of the software would suggest an FX converter will convert forex rates. However, there are limitations to the forex rates that you will be able to get because not all converters offer all of the currencies in the world. Most converters have limited the currencies they have to the most commonly converted. Of course, there are other converters that have over 160 currencies that can be converted. If you are going to use this software then you need to find a converter that has the currencies you will be trading. You do not have to worry about the cost of this service because most converters are free to use.
How Often the Rates are Updated
If you are going to be using an FX converter you have to consider how often the rates are updated. There are some converters that only update the rates once a day. It is important that you use a converter that ha real time rates or as close to real time as possible. You also have to consider whether or not the converter is including a rate for the conversion of currency.
A lot of currency converters are linked to services that will convert your money when you travel for a price. This price is often included in the conversions rates like a brokers spread is included in the cost of a trade. If this is the case then the rate you are getting with the converter is not the true market rate.
Charts Offered by an FX Converter
Many online FX converters will also have charts that you can use. These charts are not ideal for market analysis as they are generally line charts. Line charts can provide you with a general overview of what the market has been doing. However, you will not be able to predict what the market may do in the future with these charts.
You also have to consider when the chart was updated. Most converters do not have real time charts so you may be viewing historical data only. A lot of the charts offered by the converters are usually updated daily. It is important that you find out when the data for the chart was retrieved from the market.
Use of Converters by Traders
Very few traders will actively use a converter as part of their trading strategy. Some traders will use a converter when they are looking at forex brokers. When this is done you can use the converter to create a base line for currency pair rates and find out who is offering you the best spread. Of course, there are easier way to accomplish this. The fact that you are often not getting real time market rates with converters is the main reason why traders do not use converters more often.