Looking for Helpful Suggestions on the Right Time to Trade? Forex Trade Signals Could be Just What You Need.
When you’re new to the world of Forex trading, understanding the intricacies of such an ever-changing market can be difficult to grasp. Even if you’re an experienced trader, there aren’t enough hours in the day to spend watching prices go up and down, as well as keeping abreast of news events, and carrying on with a normal routine. These are just some of the reasons people use Forex signals, and to help you decide whether this is a suitable option, we’re going to give you some more details.
What are Forex signals, and how do they work?
Forex trading signals are a series of online trading alerts that provide all the information needed to uncover trading opportunities on foreign currency pairs. A set of analyses is used in order to determine whether it is the right time to buy or sell certain currency pairs. A Forex signals system can be based on technical analysis charting tools, or events that are taking place in the news. They can be set up to execute orders automatically, or on a manual basis by just providing an alert and then leaving it up to the individual trader to decide whether or not to place the order. There are free Forex signals, and also signals available for a fee, as well as trading signals a trader may have developed for themselves; or a broker can offer them as part of their services.
A Forex trade signal system is possibly one of the most important tools in a Forex trader’s toolbox, and they are used all over the world to help them make important decisions. Almost all traders use them on a regular basis in one way or another. Forex signals can be sent direct to an email address, or be received via text message, which means that the likelihood of missing a buying/selling opportunity is significantly reduced. It also means that you can keep abreast of the markets wherever and whatever you might be doing. Making use of Forex trading signals has become very popular, but we would always advise
How FX trading signals actually work
Whatever Forex trading signal you choose, it is going to be slightly different than all the others, as they are all unique and rely on a different analysis of the market. There are, however, two main methods that experts use to produce signals. One is based on watching current events and analysing how they might affect prices both in the long and short term. The other is by way of a technical analysis of the market that includes past information regarding the price and trends available.
Some signal systems are based on a computer automatically analysing the market. The computer is instructed what to look out for, and how to react to different events, by an experienced trader. The benefit of this kind of system it that it isn’t bogged down with human emotion. There are no negative effects brought about by human psychology, which can often affect a human trader’s judgment and cause them to make a wrong decision. But this benefit can also be looked at from another angle, in that the loss of human judgment results in the computer system being totally inflexible.
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What are the benefits of using Forex trade signals?
Traders choose to take advantage of Forex trading signals for a number of different reasons, but there are some general benefits we thought we should mention:
- They are great for beginners with little experience or knowledge of how the markets work.
- Signals increase a trader’s flexibility. With the help of Forex trade signals, traders are given the chance to make profitable trades at any time of the night or day, even if not actively trading. It’s even possible to instruct trading robots to execute trades on your behalf, based on the information provided by signals.
- Signals enable a trader to be more accurate and precise. They base their suggestions on accurate real-time data. All potential human error is removed, and decisions are never based on outdated or misinterpreted information.
- Signals provide useful statistics. Most Forex signals provide traders with a detailed history that allows for the interpretation and study of the markets, without having to make a trade. The statistics can help a trader make their own decisions, as well as using the help of the signals.
- Signals are always active, which means that they analyse the markets and provide alerts, even if a trader has decided to take a day off or has something more important to take care of. Reminders and alerts will still be sent when market conditions are met, which means a trader is always kept up to date.
Is it easy to pick the best Forex signals?
If you find yourself interested in the idea of Forex signals, picking the best one can be a bit of a challenge. There are so many to choose from it can be very intimidating, especially for the beginner. However, it’s not all bad news, because there are a few simple steps you can follow that will make it much easier.
The most important step is to find Forex trading signals that match your own individual trading style. We’ve already mentioned that they come in many different shapes and sizes, so it’s only natural to assume that there will be some that work much better during certain conditions, and some that are far better for certain foreign currency pairs. There are going to be signals that are designed to keep risk to a minimum, and will focus only on the safest conditions. And there are also going to be Forex trade signals that work much better for your own personal strategy, trading style and habits.
The second step to take is to ensure that your chosen signal is going to cut the mustard. Putting a signal out there on the market isn’t that difficult, and can be done without risking any real money. You most certainly don’t have to be a successful trader to do it. It’s therefore vital, certainly for signals you purchase, that there are verified results.
The third step we’d advise you to take is to test any Forex trading signals you want to use. If there are signals included as part of the trading software you are going to use, take these for a spin, as they may be all you really need. Trading platforms such as MT4 have a number of signals already built in. If you find you want more and are considering paying for a signals service, then check out the ones that offer a free trial period first. It really isn’t sensible to pay for Forex trading signals before you’ve seen the results on a trial run.
How to interpret Forex trading signals
You don’t need a degree in analysing the foreign currency markets in order to benefit from using FX signals. However, you do need to understand how to interpret them, so let’s give you a few tips to get you started.
How signals are communicated
Signals for Forex trading can be distributed in a number of different ways. One of the most popular ways is by email. However, it is becoming increasingly popular to receive signals via text and instant messaging. When the trading signal determines that there is a trading opportunity it will automatically fire off an alert. This indicates that the trader or software has been analysing the market and has decided it’s time for you to trade. It is then down to you to interpret the signal that has been communicated.
What the signal will be telling you?
- The currency pair – This is the most crucial piece of information that will be contained in the Forex signal. If the signal doesn’t tell you this then it’s pretty useless.
- Buy or sell – This is the next most crucial piece of information. After all, it’s all well and good knowing the currency pair you should be looking at, but you also need to know whether the advice is to buy or sell a particular currency pair. The signal may also tell you whether to go long or go short, and whether to place a pending order rather than a live trade. With a pending order, the price at which you want the trade to be executed is inputted, and the order will remain pending until the specified price is reached.
- Take profit and stop loss – This is another crucial piece of information the trading signal will provide: the take profit and stop loss values that need to be inputted. It is often provided in the following way: t/p 30 pips, s/l 30 pips. This is indicating that the take profit level should be set at 30 pips, and the stop loss should also be set at 30 pips. At the point at which you enter the market, you have to add 30 pips to determine the take profit, and subtract 30 pips to determine the stop loss.
Are free Forex signals worth anything at all?
Is it true that you get what you pay for? It’s most definitely true in a number of instances, but not necessarily so when it comes to Forex trading signals. The aim of Forex signals is to make trading a little easier. The people who provide signals are usually expert traders who want to share what they’ve learnt and help other traders to become successful. More often than not, this expert advice will come with a fee. Pay the fee, and whenever an opportunity arises the expert will send an alert, either via text or instant message or by email. The message will give the details of the trade and the best time to place it. It should also give advice on the take profit and stop loss levels to enter into the platform. This all means that someone else is doing all the legwork, but you can still benefit from trading in the Forex market. And who is going to blame them for applying a charge for such a service?
However, from time to time you are going to encounter an offer for free Forex signals. There are a number of reasons free signals are offered, and in order to help you decide whether they are worth it, let’s explain what they are. Just because the signals are free doesn’t always mean they are a bad idea. It may be that they are being offered for a limited time period. For a few weeks, they will be free for you to use as you see fit. The reason this is done is to generate interest in a particular signals service; a very good marketing ploy, as once a trader has used a signals service for a certain period of time, and hopefully been successful, then they’re hooked. The likelihood is that once the free period is over and the provider starts charging for the service, the subscriber will be more than happy to pay the fee and keep receiving the signals.
Another reason for providers to offer free signals is to capture information, in order to offer you another Forex product or service. If you get this kind of offer then try the signals with the help of a demo account first. In this way, you get to see whether the signals are effective, before risking any real money.
How to find the best Forex trading signals
In order to get the maximum benefit from Forex signals, it’s imperative to pick a provider that has a good reputation and is reliable. After all, in the world of trading Forex, timing is everything and without it there is little chance of being able to make quick decisions. If you’ve decided to join the thousands of other traders who use Forex trading signals, and are wondering where to start, take note of the following criteria, whatever type of signals service you are considering:
Once you enter the world of Forex trading, you’ll find yourself bombarded with adverts for Forex signals providers. There will be promises of high yields, and it can be difficult deciding whether a provider is legitimate, or just a scam. There are a number of online sites you can visit that compile lists of legitimate signals providers, and they will often be ranked according to average pips. There will also be valuable information about the provider, so it will be an excellent place to begin the search.
Speedy transmission of signals
As we’ve said before, timing is everything in the world of Forex, so you want to choose a provider that can transmit signals swiftly and efficiently. The quicker you receive the signal, the more chance you have to review the details and decide to make the trade, preferably ahead of the competition.
Opportunity for a trial
There is no amount of research, review and online information that will match the value of hands-on experience. The option of a free trial is really too good to miss, and something you should be looking out for. It will also give you plenty of opportunity to learn more about the auto-trade program or whatever method the provider uses for transmitting the signals. It also gives you the chance to discover whether the method of communication is convenient for you and the way you trade. Trading signals can often be customised to the needs of individual traders, and provide different features depending on the level of experience.
Research the signals provider.
You should try and gather together as much information as possible about any prospective signals providers, and there is a wealth of it readily available on the Internet. Of course, we’ll be sharing as much as we can right here on this site, but we would also advise you to do some of your own research. Knowledge is everything when it comes to choosing a signals provider for trading Forex.
What else can you expect from a Forex signals service provider?
Aside from alerts relating to exact or approximate entry, exit and stop loss figures for one or more currency pairs, you can also expect to enjoy a number of other features from your chosen signals service provider. There will be graphs and/or analysis to support the signals. There will also be a trading history that shows the number of pips profit/loss, and the risk/reward ratios along with actual trades, on a monthly basis. Forex robots in particular will also show back-tested results. Service providers may also provide one-on-one coaching, account management services, and educational resources.
Now that you have been given all the necessary information, you are well on the way to making the right choice. The fact that so many traders, both novices and experts, already make use of this type of service speaks volumes for its value. The important decision is not whether or not to use Forex signals, but to find the right one and not fall foul of a scam. With all you’ve just learned you’re well equipped and ready to take your Forex trading one step further.