A free forex signals is a suggestion for entering a trade on a currency pair, usually at a specific price and time. The signal is generated either by a human analyst or an automated Forex robot supplied to a subscriber of the forex signal service. Due to the timely nature of signals, they are usually communicated via email, website, SMS, RSS, tweet or other relatively immediate method.
Types of services
Services provided fall into four categories:
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Paid signals from one provider whether by personal analysis or algorithmic analysis
Paid signals aggregated from multiple signal sources or 'systems'
Signals supplied by trading software located on the trader's computer, also known as a forex robot or EA (Expert Advisor)
Typical features offered by Forex signal service providers
Typical forex-signals as provided from a renown provider.
The main services offered by forex signal suppliers are:
Exact or approximate entry, exit and stop loss figures for trades on one or more currency pairs
Supporting graphs and/or analysis for the signals
A trading history showing the number of pips profit/loss per month and/or the risk/reward ratio and actual trades. Sometimes (especially in the case of forex robots) this may be shown as back-tested results
One-on-one coaching, or additional interaction with the signal provider such as comments, forum, etc.
Account management whereby a subscriber's account can be traded by the signal provider
Educational resources either via the internet or phone
A trial period for a lesser price
Although these are the main features of a signal supplier, not all of them offer the complete list of services.
Benefits of Forex signals
Some of the benefits of Forex signals include better trade results in less time. If you prefer to trade Forex online, Forex trading signals have evolved from advancements in electronic trading. Forex signals are derived from standard trading sources or analytical programs using technical indicators. Using Forex trading signals can help the trader capture more profitable trades to grow his or her account.
Many Forex traders say they can’t perform a fundamental and technical analysis. Admittedly, traders of all skill levels say it’s confusing. Forex trading signals are useful to these traders: the signals are essential indicators to help the trader to monitor the market. To enable the trader to immediately act on Forex signals, the trading platform sends the signals to his or her phone, tablet, or computer. Traders with limited time to perform analysis or new traders can benefit from using Forex signals.
Forex trading signals can provide the trader with key limit levels and stop level exits:
- A stop level prompts the trader to close the Forex trade if it’s going the wrong way.
2. - A limit level directs the investor to take profits if the trade is currently favorable.
Popularity of Forex Trading Signals
Forex signals are quite popular with traders. It’s challenging to make trading sense of fundamental information in the Forex markets and even more difficult to use fundamentals to predict how Forex markets trade. Obviously, using Forex trading signals can help the trader to book profits and limit trading losses.
Take the following steps to use Forex signals effectively:
Know your risk tolerance. It’s possible to lose large sums in Forex trading because of leverage and volatility Highly volatile pairs, such as BTC/USD, are highly profitable or unprofitable depending on your ability to tolerate price swings.
Know your market. Professional Forex traders typically limit the markets in which the trade for this important reason.
Inform your trading platform about your ability to absorb risk. If the platform you choose offers this service, you’ll receive Forex trading signals.
As you can see, Forex trading signals can help you to monitor Forex trades.