In this article, as the title says, we’re going to talk about Forex signals and how to read them, but before we get into the main subject, is better to know the basics definitions like what are Forex signals
What are Forex signals?
A Forex Signal is a service that sends data on how to perform operations on a currency pair in Forex, usually given at a specific time and price. The signal is generated either by an analyst or by an automated system. Due to their nature, they are usually sent via email, text message, or other similar methods.
Now that we know what Forex signals are, we are going to make a guide for you with step-by-step on how to read Forex signals
Step one: choosing the best Forex signal provider:
This is the first step to learn how to read Forex signals. Most of the signals are based on the analysis of technical indicators. Telegram Forex signals are sent to a trader by service signal providers. Here’s a list of signals providers, starting with:
- Learn 2 trade:
There are various Forex signal providers but Learn 2 Trade, is better than average. There is a dedicated team that stands behind this provider that has done a great job scoring a 92% success record in giving accurate forex signals to traders. Another thing that makes Learn 2 Trade unique is that it has the ability to provide signals for cryptocurrencies along with forex transactions.
- Forex Signal Factory:
Forex Signal Factory team has done a good job throughout the three years of operating. It is completely free and a great guide to assist with manual traders looking for quality entries.
Is one of the more reliable signal providers on this list, as they provide in-depth market analysis from 13 year trading veteran Joel Kruger. Unlike most other services, Joel gives us direct insight into is strategy. He tells us that it consists of a trade journal, trader psychology, bank reports, dashboard analysis, technical analysis and fundamental analysis.
Digital Derivatives Markets (DDMarkets) have been providing trade alert services since May 2014 – fully documenting their trade ideas in an open and transparent manner. Their process is simple: carry out extensive research, share their analysis and then deliver a trading signal when triggered. Once issued, daily updates on the trade are sent to members via email.
Step two: Identify the type of Forex Signal services
There are five main ways to use a Forex signal, and the choice of the trader will depend on your objectives, the time you have to trade, the level of activity and control desired, and the personal risk profile.
We can find the following trading signals:
- By correspondence
- Forex Signals and Copy Trading Software
- Account management
This is an important part in your journey to know how to read Forex signals.
If we describe the first type, we recognize that when using this type of signal, a trader has to sit in front of the computer for a large amount of time, looking for signals to make a final decision on whether to buy or sell a certain asset.
The trader can also use automatic trading software such as the MetaTrader and EA (Expert Advisors) platform, which will automatically generate real-time trading signals, or even open positions automatically.
Correspondence Forex Signals:
In this case, the trader always manages his own trading account and simply follows the positions provided by the signals, opening the positions on his trading platform.
This allows the trader to have a higher level of confidence, while it does not allow a third party to have full control over their trading account, but on the other hand they will have to assume psychological risk.
Forex Signals and Copy Trading Software:
An automatic Copy Trading service simplifies the use of signals with forex signal software. In this way, the account of the trading signal provider and the account of the trader are linked. When the signal provider opens a trade on your account, it automatically opens on the trader’s account. MetaTrader trading platforms (MT4 and MT5) are also Forex signal software, allowing Copy Trading. Havin this in mind in your process of leaning how to read Forex signals will give you advantages.
Slightly different from a trading signal, managed accounts allow a professional manager to invest the client’s funds on their behalf in exchange for a salary or a fixed portion of profits.
Here, the provider, or rather the manager, has full control over the trading operations and, in general, does not communicate much about their decision making, but rather about their results.
Step three: Understand your risk tolerance
Forex trading always presents risk. It’s very possible to lose major amounts of capital in a flash. Popular trending pairs, can experience wild swings. So before you read into any forex signal you receive, you need to understand how comfortable you are with the related risk level.
Step four: Know the commonly used signals
- Action – I’ts a straightforward, call-to-action-style signal in most instances, with it often taking the form of a direct “Buy” or “Sell” statement.
- Stop Loss – This signal represents an exit point, which is designed to protect your investment.
- Current Market Price – A Current Market Price (CMP) focused signal will help you compare the price of the currency pair at the time of signal issue with the actual price at the time of submitting the order.
Step five: Get to know the benefits of using Forex Signals
One of the main benefits of using Forex trading signals is that you don’t need to worry about analyzing the market. This is taken care by the Forex trading signal providers.
Step six: How can you know if Forex Signals are reliable?
Forex signals are pretty much reliable as long as you are receiving them from someone who knows how things work out there in the market. Always go for the Forex Signal that works best for you and your necessitys.
Step seven: Understand the difference between Forex Signals
Even though all of the Forex Signals have the same purpose, they’re not all the same services, as you’ll find that they range massively in quality. Rates for signal services can go from the high 60% range to an even much lower range. Remember to not read all of the Forex signal services the same, instead, grasp what exactly it is you’re signing up for before you commit.
Step eight: Learn the market conditions
Forex signal it’s going to provide emotionless advice, but that doesn’t mean that it’s an excuse to not learn about the market in front of you. You gotta read and inform you about the current market conditions and the limitations before you get into Forex Signals, that is one of the main secrets to learn how to read forex signals.
How to read Forex signals summary
Learning how to read forex signals will be one of your main objectives since that with signals your journey to success is guaranteed. Keep checking our best signals for forex website for other interesting forex reviews!