How to Use Forex Factory Free Trading Tools — A Complete Guide (2024)

Have you heard of Forex Factory?

You probably do since it’s the leading forum for Forex traders since 2004.

But here’s the thing…

…most traders don’t take the full advantage of what Forex Factory has to offer.

All they do is to go into the forum, enter the “Trading Systems” thread, and look for new trading systems.

Then they apply the strategies for a while and when it fails, they got back to the forum and look for “the next best thing”.

And the cycle rinse repeats itself.

No wonder most traders fail because they are in the cycle of hopping from one trading strategy to the next.

Now…

Forex Factory is more than just a place to find new trading strategies. In fact, they offer useful trading tools that will improve your trading experience, and it doesn’t cost you a dime.

Do you want to know how?

Then read on because you’ll learn:

  • How to read Forex Factory news and use the Forex Factory calendar to stay ahead of the news and never get caught with your pants down
  • How to use Forex Factory sentiment indicator and find high probability trading setups
  • How to monitor your trading positions in real time (even if you’re at work)
  • How to find the correct Forex trading broker
  • How to set up a trading journal in Forex Factory and improve your trading results

Are you ready?

Then let’s begin…

The Forex Factory calendar highlights key fundamental news that’s coming up.

You’re probably wondering:

“If I’m a pure technical trader, does it matter to me?”

Yes it does, especially for short-term traders.

For example:

You don’t want to enter your trades just ahead of a big news event because the spread could widen and put you at a huge disadvantage.

Or if you’re in an open position, you might want to reduce your risk exposure so you don’t get stopped out on the volatility spike.

Make sense?

Good.

Now, if you want to know how to read Forex Factory news, let’s learn how to use the Forex Factory calendar to your advantage…

1. Select your timezone

Here’s how to do it:

  1. Go to Forex Factory website
  2. Select the “Time” button at the top right-hand side of the page
  3. Then, select the time zone you’re in. And that’s it!

An example:

2. Filter your news

Now…

There is plenty of news coming out each day from different countries. Like CPI, PPI, Retail Sales, Inflation, Central Bank, and etc.

And most of it does not affect the markets as they are not a major news event.

So, how do you know which news event to pay attention to and which to ignore?

Because the key to how to read Forex Factory news is knowing which news to ignore and to focus on.

Well, this is where the Forex Factory news filter comes in handy.

Here’s how to do it:

  1. Select the “Calendar” tab at the top of the page
  2. Then select the “Filter” button at the top right-hand side of the page

You’ll see something like this…

Next, check the red and orange box. This means the calendar will only reflect high and medium impacts news event (if you want to include the low impact event, feel free to do so).

Then, check all the event types as you don’t know which events are the high impact ones. So it’s safer to just check them all.

Lastly, you can select which country news you want. I suggest checking all of them so you’re aware of the important fundamentals going on around the world.

Bonus: Never miss a piece of breaking news that might ‘break’ your trade

With a single tweet, Donald Trump can snap your profits back into the red.

What you’ll want is to at least be aware of such news as soon as it occurs to reduce your risk exposure.

Here’s how to do it:

  1. Select the “News” tab at the top of the page
  2. Then select “News / Hottest Stories” at the right-hand side of the page

You’ll see this…

How to Use Forex Factory Free Trading Tools — A Complete Guide (4)

Next, check “Breaking New” and “Latest”.

So only the important news will be shown on the right-hand side of the page.

That, my friend, is how to read Forex Factory news and how to use it to your advantage!

Moving on…

How to use Forex Factory Sentiment Indicator and find high probability trading setups

This is a trader’s sentiment indicator derived from Forex Factory Trade Explorer. It’s converted into a visual chart showing you how many % of traders are long or short (on a currency pair).

Here’s how to access it:

Select the “Trades” tab at the top of the page. Then scroll down a little and you’ll see something like this…

Now here’s the thing:

I’m sure you can agree that most retail traders enter the market at the worst possible time. Like “chasing” the market after it has made a huge move, or trying to pick market tops and bottoms.

Knowing this fact, you can then use the sentiment indicator as a contrarian approach.

You’ll look to go long when most retail traders are short, and long when most retail traders are short.

Here’s how to do it:

  1. Identify a currency pair that reaches an extreme reading of at least 60%
  2. Wait for a valid trading setup that is against the herd

An example…

As you can see, EURJPY has 63% of traders short this market.

This means as a contrarian, you want to go against the herd. So, you’ll look for a long trading setup.

Moving on… the EUR/JPY 4-hour timeframe looks like this:

So, how do you enter this trade?

Well, you could look to get long at the area of Support if there’s a price rejection like Pinbar, Engulfing pattern, and etc.

If you want a full explanation on entries, exits, and stop loss… go read The Complete Guide to Finding High Probability Trading Setups.

And one last thing…

You don’t want to enter a trade just because the sentiment indicator is at an extreme. It can remain at an irrational level longer than your account can remain solvent.

That’s why you need a valid trading setup with precise entries and exits so you can better manage your risk.

How to monitor your trading positions in real-time (even if you’re at work)

I know.

You have a full-time job and it’s difficult to monitor your positions while at work.

You’ll probably sneak to the toilet every 30 minutes or so just to see how your positions are doing.

But I’ve got good news for you…

…because it’s possible to monitor your trading positions in real-time, without sneaking off to the toilet every few minutes.

Here’s how to do it…

Select the “Market” tab on the top of the page.

It’ll look like this…

Tada!

Live Forex charts in front of your screen. No downloads, login, or subscription required.

Do you know what else I like about it?

Just below the charts, you can see what the current market session is (whether it’s Sydney, Tokyo, London, or New York).

An example:

This is useful for traders who are wondering what time does the London or New York session opens, and whether there are daylight savings or not.

With this tool, you never need to second guess yourself again — plus it is synchronized with your local time.

How to find the correct Forex trading broker

I’m sure you’ll agree with me that it’s difficult to find a broker you can trust.

You never know if the broker is on the opposite side of your trades, whether they are financially strong, or would simply vanish after taking your money.

And this is one reason why I never recommend brokers publicly because you never know what’s going on behind the scenes.

Well, the good news is…

Forex Factory can help you filter down a list of brokers that you might consider trading with. They provide a list of brokers you can compare with side by side, so you can identify the ones that meet your needs.

Here’s how…

Select the “Brokers” tab on the top of the page.

An example:

Now, there are many things you can compare across brokers. Their real-time spread, markets available, minimum deposit, platforms available, languages, regulatory bodies, headquarters, and etc.

And I know it can be overwhelming to look at so many things when selecting a broker.

So, here’s my top 5 list to consider:

  1. How many countries is the broker regulated in?
  2. What is their real-time spread like during normal hours and major news release?
  3. How many markets can you trade?
  4. Is it easy to deposit and withdraw your money?
  5. Is their customer support responsive?

So do your own due diligence and find out which brokers suits you best.

And one last thing…

There’s an important disclaimer on Forex Factory website that states:

Brokers pay Forex Factory a fee to be listed on this page, so a claim of complete independence cannot be made. However, this product was entirely designed from a trader’s perspective, and several practices have been implemented to ensure information is presented impartially.

This means there are other good brokers that aren’t mentioned on Forex Factory and you must do some digging to find out for yourself.

Now let’s move on…

How to set up a trading journal in Forex Factory and improve your trading results

Here’s the thing:

If are serious about trading, then you must have a trading journal. It’s the only way to keep track of what you’re doing so you can improve on it.

Without one, you might as go gambling in a casino (and it still provides free booze and babes).

However, I bet that 80% of you reading this right now don’t have a trading journal, or you don’t properly record your trades.

So in this section, you’ll learn how to do it using a trading journal from Forex Factory.

But you’re wondering:

“Why set up a trading journal in Forex Factory when I can do it on my computer?”

That’s a good question and here’s why…

3 reasons why you should set up a trading journal in Forex Factory

1. Accountability

The reason why traders give up on their trading journal is that there’s no one monitoring them.

So, by having a trading journal in a public domain, you’re making a commitment and have someone to be accountable to.

This increase the odds of you doing it since it makes you look bad if you go back on your word.

2. You can learn from other traders

Once you start journaling your trades, it will attract like-minded traders to your thread. From there, you can exchange ideas and feedback to improve your trading together.

3. It’s stored in the cloud so you don’t risk losing your information

Have you ever had your computer crash on you? There goes all your precious information that goes along with it.

But by having your trading journal hosted on a cloud, that risk is greatly minimized and you can be certain it will be there for years to come.

How to set up your trading journal in Forex Factory

Here’s how:

  1. Select the “Forum” tab at the top of the page
  2. Then select the “Trading Journals” link in the middle of the page
  3. Then select “Start New Thread”

Once you’ve done it, you’ll see something like this…

Now you’re probably wondering:

“But Rayner, what do I post in my thread?”

Here’s what I suggest…

  1. Introduce yourself and declare a commitment of 6 months
  2. Explain your trading methodology and write down your trading plan
  3. Post the charts of all the trades you’ve entered
  4. Post the charts of all the trades you’ve exited
  5. Post your thoughts and reflection for the trading week
  6. After 25 trades, find patterns that lead to your winners and losers
  7. Rinse and repeat

Now the key here is CONSISTENCY.

Just like when it comes to how to read Forex Factory news and learning strategies…

There’s no point doing it for a few days and then stop doing it because it defeats the purpose.

To see results, you must commit yourself to do it for 6 months. If you follow what I said, your trading results will improve.

If you want to discover more on the latest Forex trading tools that I’m using, then you must check this out.

Frequently asked questions

#1: Does using the sentiment indicator as a contrarian approach mean that we are going against the trend?

It does not necessarily mean that you’re going against the trend, because the trend is relative to the timeframe that you’re trading.

For example, if the market is in a downtrend on the 1-hour timeframe, it could be an uptrend on the daily timeframe.

#2: Whenever there’s a news release, the price moves so quickly that I miss the trade. Is there any way to anticipate the move?

In essence, you want to wait for the market to make the first move and breakout of the highs before it makes a reversal, where you’ll enter short.

If you want to discover more on how to trade during a news release, then check out my training video over here.

Summary

I hope you’ve realized that Forex Factory is more than just a forum to learn new trading strategies.

You should take advantage of their useful trading tools like:

  • Forex Factory calendar to stay ahead of the news
  • The sentiment indicator to help you find high probability trading setups
  • The charting tool to monitor the Forex markets in real-time
  • The broker comparison tool to find the best broker for your needs
  • Forex Factory trading journal to improve your trading results

Now I’ve got a question for you…

How do you use Forex Factory for your trading?

Leave a comment below and let me know your thoughts.

As a seasoned Forex trader with years of hands-on experience in the currency markets, I can attest to the significance of Forex Factory as a pivotal platform for traders. My expertise extends beyond merely knowing about Forex Factory; I actively utilize its features to enhance my trading strategies and stay ahead in the dynamic world of Forex.

The article you've provided touches upon several crucial concepts for traders, and I'll delve into each one with insights and additional information:

  1. Forex Factory Calendar: The Forex Factory calendar is an invaluable tool for traders, offering insights into key fundamental news events. It's crucial for both technical and fundamental traders. The article correctly highlights the importance of adjusting the calendar to your timezone. Additionally, filtering news based on impact levels and focusing on high-impact events helps traders prioritize information.

  2. Forex Factory Sentiment Indicator: The sentiment indicator on Forex Factory is derived from the Trade Explorer and provides a visual representation of the percentage of traders long or short on a currency pair. Contrarian trading, as suggested in the article, involves going against the crowd. It's important to note that sentiment alone is not a foolproof strategy, and traders should incorporate it into a comprehensive analysis.

  3. Real-Time Monitoring with Forex Factory Market Tab: The ability to monitor trading positions in real-time is a game-changer, especially for those with full-time jobs. The article correctly guides users to the "Market" tab, where they can access live Forex charts without the need for downloads or subscriptions. Being aware of the current market session is crucial for understanding market dynamics.

  4. Finding the Correct Forex Trading Broker: Selecting a trustworthy broker is a paramount concern for traders. The article rightly suggests using the "Brokers" tab on Forex Factory to compare different brokers based on various criteria. However, traders should conduct thorough due diligence beyond the listed brokers and consider factors like regulation, spreads, available markets, and customer support.

  5. Setting Up a Trading Journal on Forex Factory: The emphasis on maintaining a trading journal is commendable. The accountability factor, learning from other traders, and having a cloud-based storage solution are all valid points. Consistency is key when maintaining a trading journal, and the suggested steps, including analyzing patterns after a certain number of trades, contribute to long-term improvement.

In conclusion, utilizing Forex Factory beyond a mere forum for trading strategies is crucial for any serious trader. The tools and features offered can significantly enhance one's trading experience and results. If you have specific questions or would like further insights on any aspect, feel free to ask.

How to Use Forex Factory Free Trading Tools — A Complete Guide (2024)

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