Forex trading signals were invented to simplify traders lives and help people make money without activating trading on their own. While this description may seem too good to be true, on the other hand, it is too short to fully answer the question «What are Forex signals?». However, it describes the nature of Forex signal service accurately.
A forex signal is a signal to open or close a transaction sent from one trader (signal provider) to another (signal user). When trading signals, forex transactions on the accounts of signal recipients are performed automatically when information is received from the signal provider. This happens manually when you receive an email or text message. It is important to choose a robust signal trading service so that trading results are similar to signal providers.
Why Do We Need Forex Signals
Everyone who trades on Forex knows that it is not enough to understand trade strategies and know the rules of the foreign exchange game for successful work. In addition, a successful trader needs a kind of flair, allowing in a fraction of a second to determine in which direction the value of the asset will change.
What to do if your intuition periodically fails? Will you have to waste your time and your nerves, keeping an intense eye on the outcome of every operation? Of course, no! There is a simple way out – to receive free signals and close almost all profit transactions.
But this is where the most interesting thing begins, because not everyone knows exactly what signals to use. Beginner traders often believe that paid signals are better than free signals. However, most paid advisers are useless because they are based on a simple surface analysis that is available to all.
Why Use Trade Forex Signals
The signal provider does not need to do anything manually to send a forex signal indicator to its copiers. With the wide range of signal services available today, it is important to know how signal providers are selected and ranked. There are many platforms that allow anyone to sign up and start selling signals without any prior validation of the experience, knowledge or ability of traders to manage risk. Because the signal provider’s trading results are displayed publicly after registration, users can conduct the analysis themselves to determine whether to stick to the strategy.
The trader must meet certain risk/reward requirements and volatility levels before being accepted as a signal provider. All providers are ranked based on the forex signal indicator algorithm, which takes into account the maturity of the strategy (how long it has been executed), the maximum decline, regular profitability, volatility, the average number of transactions simultaneously opened, and many other parameters. It also fits well into the rules of copy trading in many countries.
Why Free Signals Are Better
The condition of sending almost all free signals is registration with a certain broker. Trading on its platform, you always have access to information about which direction the price of the asset will go. The more precise the clues, the more transactions you close with profit. Consequently, you will continue to work with this broker.
It is clear that the more the trader earns, the more profitable it is for the broker. If he starts sending the wrong signals, you’ll soon merge the deposit and leave the site. That is why service owners carefully ensure that free signals are accurate and timely.
How To Use Free Signals
First, remember that the signal is not an excuse to instantly press the button, but the most likely direction of the asset price movement. Proceed as follows:
Allocate A Signal
To make sure that the signal is strong, look at the «live chart» and make sure that the price is in the appropriate trend. Then explore the latest economic news, paying attention to what could significantly affect the price of an asset of interest to you.
Using your trading strategy, begin to open trade to «Buy» or «Sell».
Wait For The Result And Make A Profit
Remember that only by signal you cannot enter the market! It is necessary to take into account all factors together, then almost every transaction will be profitable. By connecting free signals, you will save time and increase trading efficiency several times.
Forex Signals And Copy Trading
The best thing about copy trading is that it offers daily free forex signals in real time. Providers receive compensation from spreads, brokers usually charge their customers, without any additional costs to traders. Most of the company’s revenue from supported brokers is shared with strategy providers. It’s not worth anything for the trader as he will still have to pay a commission to the broker. The positive point is that some of the brokers have very low spreads (starting at 1.5 points on the EUR/USD pair).
In conclusion, although real-time forex trading is generally a reliable service, in some cases the signals are delayed when the asset price has already changed (slippage) or is completely lost, leaving the follower with an open trade that is already closed on the signal provider’s account. You need to make sure that you control your slippage when you receive each forex signal to purchase the order. Ideally, you should be able to set other user parameters, such as automatically closing certain transactions or conditions to stop following the strategy.