Forex signals are often described as “trade recommendations” made by people with more experience than you or machines with more accumulated knowledge. Some signal providers (https://forexrobotnation.com/15-best-forex-signals-tested-reviewed/) offer their services for free, while others come with a fee.
If you’re a newcomer, then you surely need some help to find the best possible trade opportunities. When you have the experience, you certainly don’t have the time to monitor the market 24/7, so you could always use an extra pair of eyes.
How can you find the best forex signals for you? That’s what we’re trying to answer today…
Take hint from this video:
How Do Best Forex Signals Work?
When it comes down to it, signals are essentially small bundles of text-based data that can be transmitted through a number of different channels. Some forex signal providers deliver them through instant messages and SMS, others do it through Skype and email, so on and so forth.
There are even entire Telegram channels dedicated to forex signals out there.
There are even fully-featured trading environments on the Internet as well. These solutions allow companies that provide the signals to make use of live videos, interactive charts, and various monetization options. For many, automated forex trading is the Holy Grail of trading.
The shortest path to fully-automated forex trading is through forex signals.
A Short Introduction to Forex Signals
For most traders, their forex signal systems are some of the most important tools they have at their disposal at any given movement. Part-time traders, semi-pros, and seasoned professionals all use forex signals to maximize their profit.
There’s an entire industry built around these signals and recommendations…
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What Should You Consider When Choosing?
As with most products, the first thing you need to consider is quality. You don’t need a provider that will constantly send you poor-quality signals that won’t result in a profitable trade. Quality signals tell you exactly when to jump into certain trades and show the direction of it.
Furthermore, quality signals also come with detailed information about the configuration of “Take Profits” and “Stop Losses.” A good way to ensure that you’re dealing with quality signals is to give a dome account a try, and see if the signals are as good as advertised.
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How Do Time Frames Come Into Play?
The time frames are something you should pay close attention to. Because of their nature, forex signals don’t work particularly well with certain strategies like scalping for example. By the time a signal arrives, your scalping opportunity is already gone, so you won’t have much use of it.
With that in mind, there are scalpers out there that use forex signals services. Keep in mind that every forex signal system is different. However, they mainly fall into one of the two categories:
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Technical signals
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Fundamental signals
technically -based signals derive their ideas from past price movements while fundamental signals come from analyzing current news, events, and market movements.
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How to Compare Signal Providers?
Chances are, you won’t settle for a signal signals provider right away. You’ll find a couple that look like they fit your strategy. You’d want to compare them to each other before picking a single one. But how do you do this? For starters, you should run a quick search on the signal ranking.
There are some score-keeping sites out there that compare providers. They’ll show you what provider is better than the other. Also, you’ll be able to find user ratings and reviews, so you’ll know how previous users feel about it.
How to Use Different Types of Trading Signals
Using trading signals shouldn’t be that complicated, right? You can concentrate on following other trends, analyzing the market, or even working on another account, and simply wait for the signals to notify you when it’s the right time to sell or buy. No more to it than that, right?
As it turns out, there is. You see, oftentimes, to make the most out of your trading signals, you need to tweak them a bit. Luckily, most signal providers allow you to make changes and adapt the signals to your accordance. Let’s see what you need to do:
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Take Profit/Prevent Loss
You should make a trade only if you think that the potential of it is better than what the “Take Profit” level allows. More often than not, completely removing the take profit out of the equation is in order. Keep in mind that you can’t hold the signal provider responsible if your investment falls through. Moreover, moving your “Stop Loss” may help you save a doomed trade. Sometimes, the “Stop Loss” may land below a moving average. When that happens, moving it above makes perfect sense.
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Why Trade Size Matters
Experimenting with lot size is another signal-trading tactic that works well for certain traders. Certain forex signals are more sure-fire than others. As you start gaining more experience in the world of trading, you’ll be able to differentiate what trades have a better probability of making a profit for you. Increasing the lot size on more accurate forex signals makes sense and the same goes for decreasing the traded amount on signals with low probability.
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Forex Pair Correlation
Observing correlated forex pairs can make you a lot of money. How you may be wondering? Let’s say that you get a signal for EUR/AUD. The same signal can possibly be applied for a EUR/NZD pair. Trades derived through this method are often more profitable than the original one. When setting your SL/TP, you can’t forget to take the spread into account. And remember that the spread is different from one forex pair to another.
Closing Words
With that, we’re finally done. Hopefully, we’ve covered the basics of finding the best forex signals and using them to your advantage. Follow the instructions we laid above, and you’ll be able to find the signals that compliment your trading style perfectly.