Forex trading isn’t the road to untold riches that many people think it is. Of course, there are a number of traders who have been very successful. But even they will have experienced a share of losing trades. It is all part and parcel of any form of investment, even when buying a house there is a chance the price can go down as well as up. However, that being said, there are a number of ways to improve your chances and we’ll be looking at one of them, Forex trading signals. We’ll take a look at the various signals available and give you some advice on how best to use them.
An introduction to Forex trade signals and how they work
Forex signals are used by a large number of traders, both beginners and those with more experience, in order to help them make important decisions regarding trades. They are a useful tool to have in your trading toolbox, and most traders will have made use of them at some stage in their trading journey. They are available in a wide range of shapes and sizes, some of which are free, and some that will be available for a fee.
Basically, FX signals are a set of analyses a trader can make use of when deciding whether to buy or sell a currency pair at a certain time. The signals are based on a number of different things such as charting tools, technical analysis, or news-based events. The most successful traders use a combination of FX trading signals to help with trading decisions.
A Forex signal is sent to a trader and will contain certain instructions. A notification is sent by the Forex signals provider that will inform them of upcoming opportunities for making a trade. The trader then simply decides whether to take the advice and make the trade or ignore it completely.
The Best Forex Signal Providers
What a Forex signal tells a trader
There are a number of pieces of information a Forex trade signal lets you know about. These include:
- The currency pair – This is the most important piece of information and refers to the currency pair the signal is advising a trader to trade on. Without it, a signal is pretty much worthless.
Whether to buy or sell – This is another vital piece of information. After all, not only do you need to know what currency pair you should be looking at, you also need to know whether you should be considering buying or selling. Some signals will also tell you whether you should go long or short and whether you should place a live trade or make a pending order. A pending order indicates a price at which you would be willing to sell, and the order will only be placed when the inputted price is met. Until the price is met the order will remain pending.
- Stop loss and take profit values – Another crucial snippet of information and these will need to be inputted if it is decided to place an order. They are usually provided in the following way: t/p 20 pips, s/l 20 pips. What this means is that the take profit level should be inputted as 20 pips, and also the stop loss level the same. In other words, when it has been decided to enter the market 20 pips have to be added in order to determine the take profit and 20 pips deducted for the stop loss.
The benefits of using free Forex signals or paying for such a service
Whether you pay for the privilege or take advantage of a free Forex signals service there are a number of benefits that are worth mentioning.
- For beginners, they are a valuable tool because they can provide a useful insight into the right time to make a trade.
- More accuracy is possible when making trades, because the signals are based on real-time data, with any potential for human error removed. The decisions suggested by the signal are never based on out-dated or misread information.
- Flexibility is increased because using signals means a trader can trade anytime of the night or day, even if the trader is not actively trading. With the help of trading robots, trades can even be made when a trader is getting some sleep, based on the information provided by the signals.
- FX signals are a great way to study the markets because they can provide a detailed history along with useful statistics. This means a trader can use them to help with their own trading decisions as well as following their advice.
- Signals never need to have a rest or take a day off. Alerts and reminders are always sent as long as certain market conditions are met. This means traders are always up to date, which is vital for Forex trading.
Is it worth taking advantage of free FX signals?
How many times have you been told: “In this world, you get what you pay for”? Probably quite a few, but in the world of Forex trading, this doesn’t necessarily apply. On order to help you decide whether free Forex signals are worth your time, we’ll give you a couple of examples when they are likely to be offered.
- Limited offer – There will be a number of signals providers that offer their services for free, but only for a limited time period. The reason it is done is to generate some interest and is basically a marketing ploy. However, this is the perfect opportunity for a trader to try the service and see if it makes any difference to their trading success. If it does, then you’re not going to be too bothered when the time comes to pay a fee. And if it doesn’t, well you’ve not wasted any money.
- Capturing information – Signals can also be offered by a provider in order to capture information so they are able to offer other suitable Forex products or services. Again, this can work in the favor of the trader because it is yet another chance to try the signals before you decide to pay for them. To save even more money you could always try the signals with a demo account before risking real money.
Picking the best Forex signals
There is no point in picking the name of a provider out of the hat. In order to gain the most benefit you should carefully pick a provider. Preferably one with a good reputation and one that is reliable. For those of you who would like to join the thousands of other traders who use Forex trading signals, here are a few words of advice.
A good reputation is vital
As soon as you start visiting various Forex broker sites it won’t be long before you find your inbox bombarded with adverts and emails from Forex signal providers. Some will promise high profits, and some will have more realistic claims. Is it possible to sort the dreamers from the realists or is there no hope? There are plenty of online comparison sites that compile lists of signal providers and they are often ranked according to success, Each of the providers will usually be reviewed as well. Which makes this an excellent place to start your research.
Signals should be swift
There is little point in receiving a signal when the opportunity has already passed you by. After all, timing is everything in the world of Forex trading. You want a provider who is able to transmit the signals in a number of different ways, all of which need to be speedy and efficient. The quicker you receive the signal, the more time you have to react. And hopefully, it will be ahead of the competition.
Do your research
With so much information at your fingertips, through the internet, there are no excuses for picking a poor signals provider. Get as much information as you can about any prospective provider because knowledge is everything when it comes to making the right choice. We’ll be sharing some of our own research but you should spend some time doing your own as well.
Take advantage of any trial offers
Doing your own research is definitely an important step to take, as it will reduce the number of likely candidates down to just a few. After this, the next step is to take advantage of any free trial periods being offered. Nothing quite matches the value of hands-on experience. The option of a trial period will also give you the opportunity to learn about the way in which the provider transmits their signals, and to see whether they actually work. You may also get the opportunity to tailor the signals to your own specific needs,
We hope that you’ve been able to understand the value of using Forex signals and are ready to make your own choice. There are so many traders already using them that they have to have some worth. We happen to think the decision is not whether to use them but to pick the best one possible and not fall foul of any scams. But now you’ve spent some time reading our advice this is less likely to happen. And you’re more than ready to take your Forex trading one more step.