With the development of the Forex market, a wide variety of tools and algorithms have emerged with the sole purpose of predicting the best trading opportunities, and at the right time. What trading signals represent, are ideas and factors that are directly correlated to the success of a certain financial asset. It’s easier to make a prediction this way since actions can be executed at a preset time and price.
Whether you are a skilled trader or just starting in the business, trading signals can only benefit your trading game and take it to the next level. While expert traders can widen their skills and profits, newbies can simultaneously make money and learn about the Forex market, trading business, and how to make the most revenue. Another benefit is the learning curve that shortens once you implement signals into your trading.
Types of Signals
Paid vs Free Forex Signals
Whether a signal is free or paid depends on the service provider. The free signals can be on an unlimited or a trial period. The paid ones can be through a subscription model or a one-time fee.
Manual vs Automated Forex Signals
Depending on how trading signals are generated, there are manual and automated ones. The manual ones are generated by professional traders, and the automated ones by computer software. It analyses and tracks process actions on the market based on coded algorithms.
Entry vs Exit Forex Signals
As for this type of classification, it is based on the details of trade suggestions. While some providers provide an entry signal — opening trade positions, others provide exit signals — closing trade positions that may have been running on your account.
What Benefits do Forex Signals Bring?
As mentioned earlier, using trading signals can improve any kind of activity, no matter the level of traders’ expertise. First of all, signals provide a wide variety of strategies that can be applied to the market. Those strategies are fundamental, sentimental, and technical — allowing traders to keep an eye on opportunities of any type.
Another benefit of trading signals is that they can save valuable time. In the 24 hours during the 5 working days when the market is open, there are many opportunities that are worth catching. This way, traders learn how to better utilize their time and be more efficient.
However, Forex signals are not 100% reliable, meaning they are subject to market changes and risks. That’s why it’s crucial to determine risk tolerance. Traders do this by calculating the stakes they can afford to lose. For example, a highly volatile asset, like gold, should always be traded with small lot sizes. On the other hand, assets that are less volatile can be traded with lot sizes that are larger.
Tips & Tricks for Using Forex Signals in Trading
If you’ve decided to use signals in your trading, you might not know where to begin. As with the trading itself, learning about the market is crucial. Only by being fully informed, can you make smart decisions. So, how exactly should you use the most out of this lucrative opportunity?
Choosing the right broker
This one might sound obvious, but a reliable and skilled broker can make sure that your execution of trading signals runs smoothly.
Choosing the right provider
This step is a bit trickier than choosing the broker. By having a good provider, you can have a success rate above 60% and minimal losses. But how can you know if a provider is good? You can simply choose one with some history, which is a sure sign that they are reliable. The new ones might get their trading results skewed.
Start with a back-testing
Before you finally decide on the provider, make sure to test their performance. A reliable signals provider will offer a trial period for their potential clients, who will simply continue using their services if the trials were successful. This goes for manual signals. As for the automated ones, back testing is a great way to ensure that the software will perform well in different market conditions. Our advice is to use a demo account for any type of trial period, or back-testing.
Every trader has a different approach and an investment objective, and the same goes for signal providers. That’s why it’s important to choose a provider that can customize your account to be in line with your trading goals.
Where Can I Learn More about Trading Signals?
Trading signals are a part of every reputable online learning platform, such as TheGreenWise.com. Not only can you learn everything you need to know about trading and the Forex market, among a myriad of topics, learn all about the Forex signals as well. Whether you are a seasoned trader, or a newbie in the business, implementing signals will only enhance your profits.