Forex Signals

What Are Forex Signals?

A Forex (FX) signal is a suggestion for entering a long (buy) or a short (sell) position on a currency pair at a specified price and time. These suggestions could cover more asset classes (not just forex), including but not limited to: indices, stocks, energy futures, metals, cryptos, etc. In this case, they would be referred to simply as trading signals.

In most cases, FX signals are meant to be immediately executed in a trading account, so that the suggested price and the actual price of execution are (almost) analogical. For this reason, it is really important to receive each trading idea with the lowest possible latency. Although most signals are communicated via website, email, text message, tweet, etc., the industry’s quickest and most efficient way for distribution is via a dedicated mobile app with push notifications.

Methodologies For Providing Trading Signals

In terms of methodologies used, signal providers resort to a broad range of practises to generate their trading proposals. Some of them focus on fundamental analysis, giving their clients longer term trade insights. In our view, this is not a good approach for a number of reasons. Most importantly, although fundamental factors can give you a good economic perspective of the situation, they fail to give precise entry and exit levels for a trade, which is absolutely key. Furthermore, keeping positions open for a longer period of time is associated with high costs in margin trading.

The majority of signal providers rely on technical analysis to generate their trading ideas. Involvement of the human factor divides this segment in two main groups. Most companies use algorithms to automatically emit signals. A smaller, yet significant, part of signal providers use the human factor as means to analyze charts and come up with real-time trading signals.

REAL-TIME SIGNALS
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REAL-TIME SIGNALS
REAL-TIME ANALYSIS

Don’t look at charts all day
get trading Signals

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How to Know the Signal Service Is Legit?

Quality signal services would always give levels which a trade should be opened and closed at:

Direct Market Entry – provision of direct market entries is advisable, as signals in the form of pending orders are of little use when it comes to precisely timing the market.

Take Profit – the suggested level where it is worthwhile to realize the gains from your trade. Some services would offer a couple of take profit levels: TP1, suitable for more risk-averse traders; and TP2, recommended for individuals more prone to risk.

Stop Loss – the suggested level which you would better limit your losses at, in case it turns out that the market is not moving according to the forecast. Legit signal providers do not pick their stop loss levels randomly; the latter should always be placed near key levels of support/resistance, beyond which cutting losses is crucial in order for clients’ capital to be preserved.

In our experience, signal providers, which get their trade ideas from a dedicated team of professionals, in most cases are more reliable, compared to others, which distribute automatically generated trade suggestions based on the subjective readings of technical indicators, oscillators, etc. The latter would often only suggest a direction in which the market is expected to move next (buy or sell) and will fail to specify precise entry and exit levels, which provides really low added value for traders.

A legit signal service would always start with a free trial period during which you would have a chance to actually test the performance of the trade suggestions, the speed of signal distribution, the quality of customer support (if any), etc. In case the company offers additional services like technical and fundamental analyses, market commentaries and newsletters, do not forget to check them out too. These materials’ quality can provide a valuable insight into the professional level of the team behind the signal service.

Guaranteed Results – Does This Exist?

Almost every company in this industry would have a dedicated section on its website or mobile application, where the performance of its signals is displayed. The presented results, real or simulated, do not provide any guarantee with regard to future performance. They are based on past market conditions and therefore, should be used for information purposes only. For this reason, we would strongly advise against making a decision to invest money and effort based solely on seemingly good performance or “guaranteed results” by a signal provider. You need to always run a trial period first and assess the quality of the service yourself.

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ANYTIME, ANYWHERE

At work? At home? On a vacantion?
Get signals anywhere you are

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