A Daily Forex signal is a recommendation for entering a trade on a currency pair – usually at a specific price and time.
The signal is created either by a human analyst or an automated Forex robot. These robots analyze the market and thru some math and algorithms come up with a possible trade. Then that signal is passed on to subscribers of the forex signal service.
Both robot and person created day trading forex signals are available for purchase on the web. However – it is very important to note that there is no such thing as the “holy grail” of trading signals.
If the system was a 100% money maker, do you think the seller would want to share it? This is why big institutional traders keep their “black box” trading algorithms under lock and key.
Sample forex signal: EUR/USD
valid: From 12:46 GMT-04:00 Till 16:46 GMT-04:00
Sell at 1.1432
Take profit * at 1.1392
Stop loss at * 1.1482
Since its’ inception currency market (Forex) has grown to become the biggest financial market in the world. The numbers speak for themselves. Statistics show that around 5.3 trillion dollars turn over the market every day. Compare it to New York Stock Exchange (NYSE) of 170 billion US dollars, Tokyo Stock Exchange of 30 billion US dollars or London Stock Exchange of 5 billion Pounds (about 8 billion US dollars).
A similar staggering fact about the turnover of currency market is how fast it has been growing. Just four year ago daily turnover was about 4 trillion dollars. No need to say that the interest of general public in the market has been growing in leaps and bounds too.
Despite these staggering numbers on daily turnover the percentage of those who actually make money in the market is very small: about 5 percent. Most Forex newbies actually lose their entire deposit within the first year of trading. This is a sobering fact that should cause aspiring traders to stop and think how they are going to invest, make money and protect their hard earned money from being lost to market pros.
One can do some self-education by reading books, watching videos, browsing in Forex forums etc. This is good, but it may take you around five years to become successful. You can also invest in Forex PAMM accounts where a money manager will invest for you. However, he will take percentage of your profits that may vary from 20 to 40 percent of the profits he makes. In our opinion, a much better choice would be to subscribe to a Forex signal service that currency trader pros offer and follow those signals.
In most cases Forex signals is a recommendation to open a specific currency pair at a specific price level with exact stop loss and take profit levels and a few more pieces of advice what to do if the levels are not reached. You can get those by email, RSS, sms, straight on your trading platform via trading Robot, Expert Advisor (EA) or simply by logging in a website of your signal provider.
If you are new to currency market you can familiarize yourself with trading possibilities by subscribing to free Forex signals. Again, they may come in the above mentioned forms. The leader in free service is mql5.com website that specializes in automated Forex trading. There are a few more. However, one should remember that a lot of things that come free are of poor quality. You may backtest a lot of Expert Advisers that are offered on the above mentioned website and other similar websites, look at their performance and find out that most signals will actually lose you money, not make it. It is good that you can test those on a demo account where you can see the results for yourself.
Despite the fact that not all paid signals may actually be profitable there is a much higher chance that they will be and if they are not a lot of signal providers will offer you a money back guarantee or not charge you on losing months. Others, like fx-tradecopier will offer you a 7 day trial period, which may help you to decide whether you want to buy services from them or not.
What you need to know about real pros is that they specialize. Let’s say traders use only three trading strategies: intraday, daily and weekly across a number of pairs and you can choose time frame when you want and are able to trade.
I can assure you that if you want to invest in the market and do not have time to do your own analysis using a reliable Forex signal service will provide you with a lot of benefits.
Firstly, you will be able to trade without doing analysis on your part as it will be done for you by expert traders. You will not have to think which strategy to be used at that specific time, what currency pair to trade, where to place your order, and where to exit the market.
Secondly, you will have a lot of time to do other things as you will not have to monitor your charts all around the clock trying to make a decision when to enter a trade as most independent traders do. Your signal provider will do it for you.
Thirdly, you can choose from a number of ways how you can get a signal and trade it: manual entries, getting sms, logging into a website, automated trading (Expert Advisors and Robots) and many more.
Fourthly, the amount of money that you will pay will be far smaller than you make as most signal providers have just a few bad months per year.
We can go on and on with this, but we will come back to this when we will do reviews on the best Forex signal providers.