The Forex Signal Guide – Fx Premiere the leading Forex Signal provider explains what forex signals are, how they work and whether using them is beneficial. To start with we must look at what forex signals do.
Forex Signals are a suggestion that you should enter a trade on a currency pair at a specific price or time. The trading signals are either generated by an analyst such as Fx Premieres forex signals or by a forex signal robot which is supplied to a subscriber of the forex signal service. Forex signals generated by an analyst are more accurate as they are able to take into consideration external factors such as world news and predict the consequences it may have on the forex market currency pairs. A Forex Robot will analyse the previous market behaviour and generate predictions based on those.The Forex Signal Guide.
The different strategies between forex signal providers
Most Forex signal providers focus on supplying trading signals based upon technical analysis which is the methodology of forecasting the direction of prices through the study of past forex market data. A minority also use price action or fundamental analysis, fundamental analysis being the overall analysis of the economy health, interest rates, production and earnings with two basic principles “bottom up” and “top down”. Price Action analysis is the use of candlestick bars, patterns, chart formations and behavioural observations by traders. It is interpreted by price action traders who are able to predict market movement. The Forex Signal Guide.
What are the types of Forex Signal Provider
There are five types of forex signal services which are outlined below:
- Unpaid/ Free Signals
- Paid signals from one provider by algorithmic or personal analysis
- Aggregated Paid Signals from Multiple sources
- Forex Robot located on a traders computer also known as a EA (expert advisor)
- Trade Copier
What are the benefits and downfalls of each forex signal service?
- Free Forex Signals: Free forex signals can be handy whilst trading they allow you to receive forex signals from various sources for free but, free forex signals are not as accurate as the paid signals due to the fact they are usually algorithmic ally generated and do not incorporate any external factors such as real time world news. The Forex Signal Guide.
- Paid signals from personal analysis or algorithmic analysis. As outlined above algorithmic signals are not completely true as they do not take into consideration external factors they also do not always work on some time charts or instruments. Using a human analyst forex signal service is more beneficial.
- Aggregated paid signals from multiple sources. This can either be really beneficial as it can give you greater understanding of trends within the forex market however can also be detrimental as every forex analyst has different trading strategies which make conflict against each other and complicate making trading decisions.
- Forex Robots also known as EA (An expert Advisor will use algorithmic data from previous trends. As mentioned above using a robot will not take into consideration other external factors and will not predict the consequences on the forex market.
- Using a trade copier service can be effective if the trader enters the market and exits at the correct time. However can be extremely devastating should a wrong decision be made.
How can you receive Forex Signals
Due to time efficiency forex signals are usually sent by SMS, Email, RSS, Live feed on a website Tweet or Facebook post. The most common forex signals sent by RSS, Website live feed, tweet or Facebook post are free forex signals. Paid forex signal providers usually send out the forex signals via SMS or Email, sometimes a combination of the two communication methods can be purchased to ensure that you have access to this information all the time.
Learn to trade with Forex Signals
Using forex signals on a demo account will help you to recognise trends and help you to learn to trade on the forex market without any risk or loss. This method will help you to indicate when to enter a trade and exit so that you are in profit. These are called hypothetical or demo trading signals. These signals are also real time which means that they can be placed on a live account however this is at your own risk.
What are the different types of features a forex signal provider offers?
- Forex Signal providers will send out a forex alert which will inform you of an approximate entry point, exit point and stop loss figures for trades on one or more currency pairs.
- Graphs or analysis for the signals
- A trading history which should be published on the website showing the accuracy through the number of pips profit/loss per month and the risk/reward ratio. Genuine forex signal providers will have this easily accessible on the website.
Every forex signal provider is different and therefore research should be instigated before you sign up to any forex signal contract.
What are the most common currency pairs for forex signals
The major currency pairs EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CHF and USD/CHF are the most commonly traded. These are all situated within the priority ranking order which show the most stable currencies.
Minor Pairs also known as currency crosses which include but are not limited to EUR, JPY and GBP crosses are also regularly situated within forex signal alerts.The Forex Signal Guide
Forex Signals Do they work
Forex Signals should be used as informative only. You are responsible for your own trades and therefore should take great consideration before entering a trade. The most successful Forex traders use a variety of methods and use their own techniques to trade.