A forex trading signals is a trading recommendation that is based on a number of technical analysis factor or combination of factors to identify exact entry, stop loss and take profit points to buy or sell a currency pair. Traders who have technical analysis background may use Forex Signals to validate their analysis and trade more confidently.
In addition, a lot of automated trading systems and new traders use trading signals that are derived from technical analysis. This will enable them to know when to get in and out of every position based on certain observations on price action.
By using trading signals in your own trading, you could improve your trading results and get firsthand experience in the long run. There are many signal providers out there and they only way you can find the best forex signal service providers is by having a look at their track record and trying them out before paying anything to them.
How you may use Forex Trading Signals
The whole purpose of trading signals is to make trading easier without having to spend hours studying and analyzing the charts in order to identify a trading opportunities. Every forex trading signals, consists of 4 main elements:
- Buy/Sell: The signal will clearly specify whether you have to place a buy or sell order with your broker.
- Entry Point: This is where your trade should trigger and you enter the market.
- Stop Loss: This is a point where you ask your broker to close your position and cut your loss when the market goes in the opposite direction.
- Take Profit: This is where you must cash in your profit and close the position to maximize your gains.
In addition, some trading signal providers also share a copy of the relevant chart to show you what their analysis are based upon. They may also have some risk management guidelines and advise you on what percentage of your funds should be risked in every trade.
Where you can get Forex trading signals
There are a lot of Forex trading signals providers available in the market. Some are free to use and others offer a paid subscription. Most of the free signals are generated by a software or an algorithm. On the other hand, paid signals are often provided by experienced traders who analyze the charts on a regular basis.
Despite how a forex trading signals is generated, it is crucial to make sure that they have a success rate of over 50% over a certain period of time (ideally 30 days), meaning that at least 50% of the signals should result in successful trades to ensure you do not lose your trading capital.
How you will select the best Forex signal providers
1. FOREX.com – They are considered to be one of the best Forex brokers in the United States. They seem to have free access to Advanced Trading Platform tools that offer trading signals you may use to enter and exit trades.
FOREX.com also provides a Recognia technical analysis portal for free that will make it easy for you to plan trades. It reveals trading opportunities for short term depending on pivot points, support level, resistance levels and a varied range of indicators used by technical analysts. It provides you with a detailed reasoning why this kind of trade makes sense and proposes suitable options in case the market conditions change.
2. Daily Forex – Daily Forex holds the second position among free forex signal providers. It publishes daily forex signals for major currency pairs. Through Daily Forex, each currency pair has a dedicated page on their site that consist of a risk evaluation percentage, signals with particular directions to buy or sell at certain price levels and appropriate timing for optimum trading. Entry, take profit and stop loss price points are also provided with each kind of signal.
This forex signal provider is absolutely free like other signals providers that mainly advertise a free plan and then charge for the services to make the signals useful. This signal provider consists of an impressive number of social media followers.
3. MQL5 – MQL5’s signals page is among the major forex trading signals resources for the traders with MetaTrader 4 or 5 trading platforms. The website has a large roster of signal providers that are individual traders whom you may copy automatically with the help of MetaTrader trading platform.
MQL5 enables almost anyone to offer trading signals. The performance of each trader will be assessed and then rated with their return on investment (ROI) over time. This will also include the number of trades conducted within a specified time frame and maximum drawdown experienced in the trading account. Besides, the MQL5 market will authenticate trading results of all providers which other forex signal providers might be reluctant to disclose.
The website also provides software to filter several traders by different variables such as maximum drawdown, net profit and ROI. You may conduct your own filtering by choosing the best performing traders to copy.
4. ForexGDP – Forex GDP is the second low-cost selection and provide a signal service for free that you may try out with two to four trading ideas to act on each month with a target of 90 to 150 pips. If you are looking for extra features and greater profit, then the paid plans might be suitable for your requirement.
The Premium plan provides you with 8-12 trading signals and delivers a target profit of around 300 to 700 pips at an affordable subscription price of $84 every month. For $147 a month, you may opt for Supreme plan that consist of 16-25 signals and with a target of 700-1500 pips.
5. JKonFX – This signal provider is owned as well as operated by Joel Kruger who is a veteran trader. The differences between JKonFX and other signal providers are quite impressive that might cater to novice as well as seasoned traders. JKonFX’s services are generally based on six disciplines of market analysis that consist of – technical analysis, dashboard analysis, fundamental analysis, trader psychology, bank reports and a trade journal. Each of these fundamentals will be addressed regularly through either video presentation or information that is published on the website of the provider.
The signal provider provides two types of plans: a $30 monthly plan that has 5 weekly fundamental and technical analysis reports for at least 1 weekly Market Movers Report and at least 10 Daily Bank Reports. For $45 a month, you will get all past offerings along with priority customer service, 3 Trade Finder Dashboards, an Instant Trade Alerts and Export Trade Journal History.
In conclusion, choosing the best Forex trading signals provider might influence your ability to make profit in the long run. It is important that you select wisely among the best signal providers based on your needs, budget, risk tolerance and trading style.
Some top-quality brokers such as FOREX.com offer trading signals as a part of free services that they give their clients with trading accounts. Hence, you need to check carefully with your trading broker at first in order to know what they can actually provide and test them with a demo account before deciding to use them for real money trades.