How to trade the currency market using Forex Trading Signals
What are Daily Forex signals? A Daily Forex Signal is a recommendation for entering a trade on a currency pair – usually at a specific price and time.
A Forex trading signal is a suggestion to open a position on an exchange rate – often at a certain cost and point in time. This notification can be generated by a human analyst or an automated Forex bot. These robots assess the market and then come up with a trade possibility by using numerical equations.
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After that, the signal is conveyed to individuals who have subscribed to a high-quality Forex trading signal service. It is possible to buy both types of signals on the internet – ones created by people and those made by robots. However, it is essential to realize that there is no such thing as the “perfect” trading signal. Would the vendor wish to share a system that made them a constant profit? For this reason, big investors protect their “black box” trading algorithms.
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
When currency trading (Forex) began, it rapidly became the biggest financial market in the world. Data demonstrate that it has a daily turnover of around 5.3 trillion dollars. This is drastically higher than the daily turnovers of the New York Stock Exchange (NYSE) at 170 billion US dollars, Tokyo Stock Exchange at 30 billion US dollars, and London Stock Exchange at 5 billion Pounds (which is about 8 billion US dollars).
It is worth noting that the daily turnover of currency trading is rapidly increasing. Just four years ago, the daily turnover was around 4 trillion dollars. It is evident that the market has gained immense interest among the general public.
In spite of the immense daily volumes in Forex trading, the people who actually make money in the market is quite low – only around 5%. In fact, most novices in Forex trading tend to lose their initial deposit within the first year. This should be a cause of concern, as it should encourage traders to contemplate on how they can invest, generate returns and safeguard their hard earned capital from the grasp of market professionals.
One way to get a grip of the Forex trading is to self-educate by reading books, watching videos, reading up on Forex forums, etc. However, it may take up to five years to become successful. Alternatively, one can invest in Forex PAMM accounts, where a money manager will invest for you and take a cut of the profits, ranging from 20 to 40%. A better solution, in our opinion, is to subscribe to a Forex signal service that is offered by currency traders and follow those signals.
Variety of Forex 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.
Paid signals from pros
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.
Benefits of using Daily Forex signals
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.