Can You Trust Online Forex Calculators? How To Find The Best One? 

 What Are Forex Calculators? 
Trading calculators are forex tools that assist traders in calculating various aspects of trading, such as profit & loss, swap fee, margin and pip value. Using these tools, traders can plan their trades effectively and potentially enhance their earnings. Though it’s possible to calculate positions manually, using a Forex calculator can simplify the process and give accurate results instantly. 

Understanding the Different Types of Forex Calculators 

There are many trading tools in the market that can be used to compute different trading values, be it lot size, pip value, volatility or anything else. These forex trading calculators can be conveniently accessed from the web without downloading any software. The best part is they are completely free to use. All a trader needs to do is enter relevant information, and the calculator will automatically carry out the computations and give accurate results. 

Factors to Consider When Choosing a Forex Calculator

The most crucial factor to check while choosing a Forex calculator is its source. There are thousands of trading calculators available on the internet, but not all of them are dependable. You can only trust the results of a trading calculator if it's from a reliable source. Therefore, it’s important that you either use the trading calculator offered by your broker on their website or from a reputed website. Moreover, to check the accuracy of the calculator, you can try and test it a few times by entering different values. You can also cross-check the results with a different calculator to be doubly sure. The next important thing is to ensure that the calculator is not outdated, as it may lead to errors. 

Evaluating the Reliability and Credibility of Forex Calculators

Forex trading calculators are immensely useful, and there’s no doubt about that, but it’s essential to know if your calculator is reliable. Therefore, before heavily relying on any trading calculator, you should make sure that you consider all the factors discussed above. Using a trading calculator doesn’t mean that you will get to find out the exact values and determine the accurate result of your trade. Therefore, you shouldn’t take the calculated result at its face value but use it to get an idea and make an intelligent decision about your next trade.

Popular Online Forex Calculators and Their Features Compared

PIP Calculator: A pip calculator is useful for forex traders, as it allows them to find the monetary value of 1 pip in a given currency pair. Profits and losses in trade are measured by pip movement. For instance, if the pair moves in your favour by 1 pip, you will make a profit, and if it moves against the direction you predicted, you will have to incur a loss. But to understand the amount of money 1 pip is equivalent to, you need to find out the value of 1 pip. This is where a PIP calculator comes in handy. It requires traders to enter in the base currency of their trading account, asset class, instrument, and volume of trade in lots.

Margin Calculator: The margin calculator determines the margin requirement put forth by the broker for you to open a position. Margin is like a security amount that you have to keep in your account, and if it falls below the level stated by your broker, the broker has the right to close your open positions. To avoid that, you must ensure that it fulfils the margin requirement. Therefore, you can use this nifty little tool to determine your margin requirements before starting a trade.

Forex Swap Calculator: This is another powerful trading tool particularly for traders implementing carry trade strategies. To understand how it works, you should know that a low-yielding currency is exchanged with a high-yielding currency and vice-versa in a carry trade strategy. A positive swap will occur When the currency being held is higher than the interest rate on the currency being sold. This results in a fee being paid to the trader for holding the position overnight. On the other hand, a negative swap rate will be applied when a trader holds a position overnight and the interest rate on the currency being held is lower than the interest rate on the currency being sold. In this case, the trader will pay a fee to the broker for holding the position overnight. The swap rate, also known as the rollover fee, depends on the differential interest rate. You can use a Forex swap calculator to find this fee.

Profit Calculator: If there’s one thing that binds all types of traders despite their experience level, strategy, region or anything, then that’s this Profit & loss equation. Before entering any trade, traders always have this one question: How much will I make or lose on this trade, is there any magic wand that can answer this puzzling question? There sure is! Profit calculators allow traders to determine the outcome of a trade by giving them a realistic estimate of their trade outcome. This ultimately helps traders understand whether they should enter a particular trade or not.

How to Use Forex Calculators Effectively in Your Trading Strategy?

To effectively use the Forex calculators, the first thing you need to know is the type of calculators that you really need. There are plenty of calculators available online but do you need all of them? Of Course not. Let’s say you are a day trader, why would you use a swap calculator when you’ll not be paying rollover fees anyways. Therefore, the first thing to understand is the calculator you require. To simplify it, you should find out the calculations you must carry out for your strategy. If you are using high leverage, it’s crucial that you calculate margin requirements along with potential profit/loss.

Once you identify the important calculators and want to use them, you should pay special attention while entering the inputs. Online forex calculators have a very high accuracy rate, but even the slightest error on your part in entering the information will generate the wrong output. This will further cause you to enter the wrong trade or with inaccurate parameters, ultimately leading you to lose.  

Conclusion

Trading calculators are incredibly useful for planning trades correctly. It can save you from making costly mistakes and help you find the right parameters for your trade, like the position size, stop-loss and take-profit levels. However, trading calculators should only be used for judgments rather than relying solely on their results.