6 Tools for Trading in Inflationary Markets

The current rate of inflation in the European market as a whole is 4.1 percent. In the U.S., it’s 5.4 percent. While those numbers are troubling all by themselves, they’re even more worrisome when you consider that they’ve nearly tripled in both places since the same time last year. European leaders and central banks are still in the midst of deciding whether to take corrective action that could dampen the overall rise in price levels. Likewise, U.S. officials are in the same position as they mull over whether to wait out Q4 of 2021 before moving to rein in the upward surge in consumer and producer prices.

For traders, inflation is neither good nor bad, but merely one more economic indicator to take into account when making decisions about where to park their capital. In many ways, for instance, inflationary pressures can add a sense of predictability about where things are headed. What are the specific opportunities in such an environment, and what kinds of tools are best designed to maximize trading profits in unfavorable economic times? Here’s a summary of what every investor and trader should know about trading tools that can make inflation work to their advantage.

Versatile Platforms

When consumer prices are changing rapidly, whether upward or downward, it’s essential to use a versatile brokerage platform that can take many factors into account. For instance, traders need real-time economic data, currency prices, and more. A versatile platform can deliver streamlined trading experiences to beginners and experienced trading enthusiasts. Why is a user-friendly, capable platform such an asset? Primarily because securities and currency markets are complex environments that call for dozens of applications and techniques. You want to have the choice to make multiple orders, follow several different price charts simultaneously, track prior profitability, and more.

Position Calculators

Position calculators are the single most helpful tool any currency trader can use. Why? Because all you need to do is input several basic parameters, like the name of the pair, the current ask price, your account size, your risk percentage, and the size of your preferred stop in pips. Once you tell the calculator those things, it will reveal all the pertinent details about your trade, including the amount of capital you have at risk should you go ahead with the trade, your position size in units, standard lots, mini lots, and micro lots.

That’s plenty of essential information just based on a few pieces of required data. For those familiar with the metatrader 4 platform, there’s a built-in position size calculator that allows users to gain fast access to how much of their hard-earned money is on the line in any given transaction. Plus, all the pertinent information, like the current asking price for all the major pairs, is just a click away for MT4 users.

Clear Signals

Some trading professionals and amateurs use subscription services to gain access to signals. A well-researched signal can offer clear guidance when inflationary and other economic forces make it difficult to predict near-term market moves. This is equally true in equity and forex markets. One of the key benefits of platforms like MT4 is that users can easily subscribe to affordable signal services. In fact, you can select from a vast menu of signals on any number of currency pairs, depending on what your favorites are. Services like these deliver worthwhile suggestions based on deep research by experts, which means you’re tapping into some of the highest-level information available. It’s always your decision to use or not use a particular signal.


When your broker offers a reasonable amount of account leverage, you’ll be able to amplify your potential profits and losses without putting a large part of your account balance at risk. Of course, this assumes the use of well-placed stop losses and other smart tactics, like the use of expert signals, wise money management, and informed choices.


Trading simulators are available on almost every brokerage platform nowadays. They are excellent tools for learning how to place orders, set stops, learn about the many kinds of orders, and exit a position quickly. Expect to spend at least a week working with the simulator, during which time you’ll use a fictitious account and faux funds. The exercise is an ideal way to sharpen skills and get rid of jitters that often come with those first few trades of the week.

Earnings Reports

Corporate earnings reports can make for boring reading, but if you take the time to at least scan them, you’ll learn a lot about upcoming opportunities. Plus, many companies publish summaries of their quarterly reports, which means you can scan through all the ones that relate to your trading positions and gain important insights into upcoming price moves.

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