The main target of every trader is to receive a profit. But not all market players can boast about excellent analytical skills. And it is pretty tricky to track the quotes of dozens of currencies independently.
Therefore, all Forex traders use special analytical tools to facilitate this task. Trading signals belong to these instruments. These are one of the most effective tools of a Forex trader as they help automate the trading activities and make critical decisions about the trades.
What Is A Forex Signal?
In simple words,
Forex signals are trade offers that allow you to open buy and sell positions without doing your research. Instead, you subscribe to a forex signal provider that studies the markets on your behalf.
It usually happens in one of two forms – human or automatic. As for the first one, here, an experienced trader will do some manual research and then send you their observations.
When signals are generated in auto mode, the study is carried out according to a previously prepared algorithm. It enables the system to simulate all possible scenarios for all assets continuously.
Then, when the algorithm selects the best moment for a trade, it informs its subscribers by a signal.
How Does A Signal Look?
Signal providers will send you trade offers with several vital parameters. A signal delivers all the information to open a position without risk. In most cases, it contains:
- The name of the instrument it is generated for;
- The direction of the trade – buy or sell;
- The price of the trade entry;
- Stop-loss level;
- Take-profit level.
As a rule, this information can be supported by additional data. It is essential to see the description and graphic explanation to understand better the reasons for generating a signal and analyze whether it is strong enough to be used.
Where To Find Signals?
Signals are supplied either by special trading software or by experts with relevant experience, authority, and reputation.
Only a real human trader can fully assess the markets so most people prefer to follow signals from expert traders rather than from software. One of the leading experts in this area is Bob James from 1000pip Builder. This popular service has been helping traders for many years and members have left hundreds of 5-star ratings on TrustPilot. Most importantly the performance of the signals has been independently verified so you can have full confidence in the signals. If do decide that expert Forex signals are for you then 1000pip Builder is well worth visiting.
In automatic generators, the programs use such mathematical algorithms as Fibonacci levels, stochastic curves and analyze data of previous similar market situations.
There are dozens of signal providers on the market. And the challenge is to select which service to subscribe to.
The best signal providers are platforms MT4 and MT5. Practically all participants of the financial markets can work with. Here, you will find a huge number of different providers of trading signals.
You can choose any of them. Besides, you can get trading signals from the following sources:
- Brokerage platforms. Usually, each broker offers free trading signal programs to their partners. You can quickly join any online trading platform by creating a trading account. Most platforms offer demo accounts, allowing you access to all their feature without investments. But it is vital to remember that technical analysis does not guarantee 100% forecast correctness and is just a hint for further actions.
- Experienced traders. Beginners can join the account of a successful trader and copy his trades. Such services usually are paid. Signals coming from teams of analysts and experts, as a rule, are based not only on technical but also on fundamental analysis. In this case, specialists first analyze and check the available information and only then send the appropriate signal.
- Third-party services. Many sites generate Forex trading signals. There are free and paid services, and some even have the function of sending messages to a mobile phone. The cost of information on different resources can vary. The price of access to paid resources depends on the number of signals provided and other things. Many of these services have free trial periods to evaluate the effectiveness of the signs.
Today, Forex signals are a must-have tool for most traders. They help timely and efficiently evaluate the situation on the market at a specific moment in real-time. With this information, traders can quickly react to these conditions, removing their funds from under attack or, on the contrary, boosting the chances for success.
So the task of each trader is to form his unique set of signals that he will trust and strictly follow. It is the right approach to building a profitable trading system.