Forex signals also known as the little helpers in the Forex market, can be a real profit saver if you have chosen the right signal provider.
There are individual companies just engaged in the calculation of the Forex signals, but some brokers include the option of signaling for some of the account types they provide.
The signals are based on a strategic approach, statistics, and mathematics.
| Rating | Broker | Bonus | Open |
|---|---|---|---|
| xtrade | – | Open Account | |
| xm | $5000 | Open Account | |
| HYCM | $5000 | Open Account | |
| avatrade | 40% | Open Account | |
| instaforex | 250% | Open Account |
Your service provider monitors the market for you and picks up all relevant information which is then being sent to you via e-mail, SMS, or pager.
The signals provider connects to the traders’ accounts using the trade copier which enables the transmission of the signals onto the traders’ accounts. The connection works 24/7 managing the trades like a real human professional trader. You choose your own trader, i.e. signal provider who will send you the hints and instructions.
The information they provide lets you know when is the best time to sell or to buy a currency. Also, they advise you when is the best time to set profit limit or stop loss orders.
Trading signals enhance the management of your account especially since the business environment is very hectic and dynamic and you are not always able to notice or follow every market change.
Forex Trading Signals Service
Signaling can be divided into four categories:
- Free or unpaid signals
- Paid signals from only one provider which can be generated through personal analysis or algorithmic analysis
- Paid signals coming from numerous providers or sources
- Signals incorporated in the trading software known as Forex robots or Expert Advisors.Additional features include a.) supporting graphs for signals, b.) a monthly statistic overview of profits and losses, c.) the risk ratio, and d.) trial period at a smaller price.Signal providers offer coaching and training through various fora, comments, etc., as well as account management, which implies that the trader’s account can be traded solely by the signal provider. This basically means that your provider has free hands in making trading decisions instead of you.
Forex Robots
The automated system of the Expert Advisor is more personal than the signals provider. Forex robots are based on pre-set parameters and act accordingly. They enter trade orders instead of you and generate returns with the use of mathematical operations. Basically the intelligence and performance of the robot depend on the creator of these robots. They are tested under all conditions before operating, and they are fixed. This means that they do not adjust to changes in the market, but they will perform as initially programmed to do. This can be good, but it could also be bad.
The lack of human emotions is one thing, but the robot also lacks the intelligence level to deal with the unexpected. The advantage is that the robot will not be negatively influenced and affected by human emotions and will not make a wrong decision based on panic and fear.
Besides technical analyses, a more sophisticated programmers include background checks for optimization of results.
Every trader should decide for themselves whether they see more benefits or disadvantages of the automated trading system(s).
Adjust your trading time to signaling
Forex trading signals are also called the entry and exit signals. They are the result of in-depth data analyses and research on the market. Their disadvantage is that they are time-specific, which means that accurate information stays accurate for a short period of time and traders need to react quickly. Some providers usually send signals three times a day, and if you want signaling to be effective, you might want to log into your account precisely when the signals arrive.
A well-reputed Forex company that cares about its clients will probably provide pretty much accurate data in contrast to bad- managed brokers and inexperienced traders.
Forex companies have to pay careful attention when sending trading signals, given that they operate signals for investors, traders, dealers and brokers.
The Common Indicators
The majority of trading signals are based on indicators which recognize market trends. These indicators can identify the entry and exit market points.
Some of the indicators used are:
– Simple Moving Average (SMA) which is extracted directly from the currency chart. Signals to buy are generated when the value of the currency goes up (above average) and signals to sell are transmitted when the currency price drops.
– Moving Average Convergence Divergence (MACD) mirrors the link between two moving price averages and is based on mathematical operations which involve the exponential moving average.
– Volume is also used as an indicator to identify interest in a particular currency pair. If the interest grows a signal is sent to advise traders to start a new trend.
– Bolling Bands is focused on market change trends. To tighten the spread for a particular currency pair, the exchange price has to be changed quickly.
Approach to Signaling
The basic approaches that are commonly used are:
- Technical analysis,
- Price action
- Fundamental analysis
Most brokers use the technical approach (e.g. candlestick charting, Ichimoku, etc.) displaying short and long term price trends enabling space for a variety of trade options, which the provider will offer to its clients. Technical analysis is helped by a bunch of statistical pieces of information from the past and the present to make predictions.
Price action is the most obvious indicator which helps traders in risk assessment and strategy formation.
Fundamental analyses work on a long-term basis. They inspect interest rates, earnings, GDP, households, earnings, industry, employment, and management.
The sub-categories of this king of analyses are the bottom up and top down strategies. Sources used are past and present data to make predictions.
Choose the Right Forex Signal Provider
The trading signal services facilitate Forex trading under the condition that they are managed and run by real experienced traders.
This is the point where traders can face a dilemma given that they do not know who sits on the other side of the computer and who takes care of their financial decisions. Is it a professional, experienced trader or rather someone who gives random advice?
Many companies advertise their services, and it is your job to find a decent signal provider who will be as accurate as possible.
Many advise against free Forex signals considering that they are just random suggestions with no core analysis. Whether you choose an independent signals broker or subscribe at your Forex broker’s, make sure that an expert team will handle the decisions.
Free signals are sometimes a part of the VIP or Premium account offers by brokers. They offer it as a part of a service for more costly accounts.
Sometimes if the signals provider or the broker’s platform is low in quality they can cause malfunctions of options like Stop Loss and Take Profit, resulting in performance failure (when set parameters do not work properly) which can affect your trading and investments.
Experiences of Traders with Forex Signals
People have different opinions on Forex signaling, but they can be roughly put into two categories: those who think signals are helpful and work, and those who think signals are a waste of time and do more damage than good.
I have noticed that people who are registered with strong broker companies rarely complain about the signals. On the contrary, many even praise and appreciate the experienced automatic trader and state that signals have changed their lives.
These people like the fact that they do not have to research the market on their own (especially because they have no time for that), and they rely on the latest technological developments in the Forex business to avoid making wrong decisions. They follow signal instructions without questioning them and, if they are to be believed, these signals bring them in more profits than losses.
The other group of people had quite a different experience feeling like they were scammed. Their signals were inaccurate and confusing and caused them to lose money.
Trading signals obtained by technical analysis are preferred by many Forex traders because they believe that these signals are based on an all-around examination of market factors.
Many traders opt to use as many signals as possible to help them make financial decisions. They do not rely on one provider and their automated platform signals, but yet pay a lot of money to get useful tips and advice, and it pays off.
Conclusion
In short, what is true for the Forex market is true for the trading signals as well. If you find a decent signals provider, you will have a real chance to earn an extra profit on the basis of your automated SMS alerts and e-mails. Subscribe with a signals broker who employs a devoted team of experts who know the market by heart and make an effort to transfer their knowledge in the form of hints and tips for you.
Always remember that finding a decent Forex signals provider (along a good Forex broker) is half of the job. A strategic approach to your account is one of the key features, and most of people have no time to do it themselves, so they rely on automated assistance.