In forex, the main purpose of the business transaction is to buy and or to sell. These buying and selling transactions are usually done by a trader – hoping to profit from them. This is done through speculation. Being the largest market in the world, predictions of the market movement has become very difficult and thus people rely on Signals. Signals serve as an indication of the possible market direction, upwards movement where a trader will BUY/go LONG or downward movement where a trader will SELL/go SHORT).
Signals are systems used by forex traders worldwide in helping them make decisions about their trades, and it is often advised to thoroughly make a research about signals you may be interested to use and also figure out if they make use of take-profit and stop-loss configurations. There are a lot of forex trading signals globally, some are paid for, and some are free of charge.
It is advised to test your signals robots or whichever method you may be using as a signal on a demo account, after all, every system needs to be tested.
Most companies that offer signals would typically send them via email or via text message, helping you to track your trades – which I believe it is the best method of receiving signals. [ht_message mstyle=”alert” title=”” show_icon=”” id=”” class=”” style=”” ]With a vast growth popularity use of signals, it is most difficult to spot really reliable and trustworthy signals, which is why it is very wise to test your bots before implementing them on a real account.[/ht_message]
Forex Signals are unique and rely on different market analysis – but are all from one of the ways of market analysis, Technical and Fundamental Analysis.
Technical Analysis may include past information and trends of the market prices, whereas, fundamental analysis focuses on current events and how they may affect the market for a short or long period of time.
Signals are just a suggestion when entering a trade of a specific currency pair – and at most times at a specific price and time – if you set your robot that, when currency pair hit a certain price to immediately open a position – however, it is not only an automated forex robot that can generate a signal, an analyst can also do a better job.
As said, they are communicated via SMS, email, or on the provider’s website, twitter, facebook even WhatsApp etc.
There are four types of signals
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- Free Signals – This type of signals are not paid for and can do as good of a job as with the other types of signals.
- Paid Signals – This type of service comes directly from your provider / can be a company and or a human analyst.
- Paid Signals from aggregated signal sources.
- Metatrader Signals or supplied by any other trading software, known as Forex robot or EA(Expert Advisor)
What to expect from a Signal
- Entry, exit, stop loss configuration on currency pairs
- Graphs/analysis for your signals
- Trading History (profit/losses)
- Personal interaction with the signal provider
- Account Management
- Educational resources
MetaTrader 4 has made things even easier by allowing you to copy the trades performed by other traders in real time. It has over 3200+ free and commercial signals to choose from can be found on their website.
On the Metatrader platform, for your convenience, all signal providers are sorted by their trading results and you will notice that the most successful ones are placed at the top.
As a forex trader, it is important to know how to read signals, these forex indicators are trader’s best friend.
Signals are there for you to determine or rather give a suggestion as to whether to buy or sell a particular currency pair at any given time for as long as the market is still open and this will be based upon news or technical analysis.
Metatrader announced that signals that are used on MT4 cannot be used on MT5 because they use MQL programming language. MQL signals can only be executed on MT4 (Metatrader4).
Which kind of signal is best
Signals can either be manually executed or automatically executed, and this really depends on you and the type of signal you have, and perhaps whether or not you are a day trader or an owl trader.
[ht_message mstyle=”success” title=”” show_icon=”true” id=”” class=”” style=”” ]You can do all these at the comfort of your own home and manually open a position, on whether to buy or sell. Automated signals are bots configured – and instructed by a trader. It is best to understand what you doing before you using bots, and if they have Stop Loss and Take Profit configurations.[/ht_message]
Configuration of signals
There are a number of different signals in the world that most might need an understanding, and thus it is best to understand how Forex works before purchasing and/or using a free signal. There are four common configurations that one might need to bear in mind; however, some might call these signals, which would, in turn, be true.
One very important configuration would have to be Stop Loss – this is an exit point, this protects you from losing a substantial amount of money of not all of it. It is best to protect your investment from blowing your account.
Secondly, very important as well, the Take Profit configuration – once a profit level has been met of which you had set yourself, the signal is triggered to close the position saving your profit.
“Action” is execution of the market, a direct buy or sell configuration.
The Current Market Price (CMP) – this will help with the comparison of the currency pair’s price at the time of signal issue with the actual price at the time of submitting the order.
How to read forex signals
Reading a signal is very easy, it’s the configuration behind it that might be a bit complex, however, once you start understanding how they really work; you will realize that they are not that complicated.
It is also possible for one to create their own bots, and or analysis without relying on paid services. If you don’t have all the time in the world to do your own analysis, you can use the free or paid signals at your own discretion.
One forex signal will not be the same compared to another, but reading a signal is very simple – the coding behind a forex signal robot might be the complex part, but understanding how it works should be just a breeze.
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Buy EUR/USD at CMP 1.1501
STOP LOSS – 1.4501
Take Profit – 1.1551
Breaking it down, the call to action within the signal is to BUY, as it clearly describes the currency pair “EUR/USD” which is what you’ll be buying. CMD is 1.1501, and you are ordering the signal to stop at 1.4501 if the market goes against you, which will be a downward movement.
In this case, you are willing to lose your trades at negative 50 pips or Take Profit at 1.1551 which will be positive 50 pips, once the currency reaches your TP, it will trigger the signal to close your position and keep the profit.
Forex Signals are available worldwide – all of which will be at your disposal when you need them. Make use of a demo account to test your desired signals.
Forex Signals are not a guarantee of making a profit; however, if the wins are higher than the losses, then it’s a good signal. Losing trades shouldn’t be more than winning trades.
Metatrader as a trading platform makes things way too easy for everyone is my number one recommended trading platform where signals are just a tap away.