Along with the strong development of the market, Forex signals service is also blooming, increasingly playing an indispensable role for a large number of traders. So what exactly are Forex signals? Why should you use them in trading? Learn Forex Trading will help you answer all questions related to receiving Forex signals through this article.
What are Forex signals?
Are the short term for forex trading signals. Simply put, this is the result of the analysis process, providing traders with information to determine the factors related to a transaction.
Specific factors include order entry time, asset type/currency pair, buy/sell position, time frame, stop loss price, take profit price,… Besides, forex signals also introduce more complex factors, depending on the analysis or thinking process of each trader.
For experienced traders, Forex signals are the result of analyzing charts combining indicators and models. As for inexperienced traders, forex signals mainly originate from political, economic, and social news and events.
See more: Forex is a great way to financial “billionaire”
Types of Forex signals
Forex signals include many types. Based on origin, we have two main types: manual and automatic.
Manual signal
This type of signal is created primarily by investors. Traders self-judge signals based on experience and then apply them to trading. They can sit for hours in front of the computer observing charts. You can even make many transactions, thereby gaining valuable experience. In addition, investors also use technical tools to analyze and predict trends. From there, find the appropriate signal and place an order.
Automatic signal
In contrast to manual signals, automatic signals are generated by more reliable sources. It could be from trading robots, trading software, or experts.
Advantages and disadvantages of using forex signals
This section does not mention manual signals. Because most traders who want to be successful must know how to analyze and create manual signals.
Buying, receiving, or using automatic signals from suppliers or software/robots means you are depending on the intelligence of others. This has both advantages and limitations.
Advantages of Forex signals
Solve the 3 problems you lack
Specifically, Lack of time – Lack of knowledge – Lack of experience. Firstly, creating forex signals yourself requires a lot of time, not suitable if you are too busy. Second, if you lack knowledge, you cannot analyze and draw accurate conclusions. Third, you have just entered the market, and have no real experience, and sometimes your knowledge is far from reality.
Using automatic signals, you will immediately receive signals from the robot or expert. Your job is to place orders according to those signals. You don’t even need to place orders yourself, just use the copy trade service, which automatically copies transactions.
Minimize risks
You can use the services of different Forex signals providers. So your capital does not depend on a single strategy. If you realize that the signal is not effective, you can stop and use another signal instead.
Related to Margin forex
Signals are usually the result of careful analysis, minimizing risks. So if you use margin forex, your trading orders will become safer. What is forex margin or what is forex margin? You can learn more in other articles on Self-Teach Forex.
Opportunity to increase passive income
If you choose quality signals, profits will come into your pocket every month regularly. If you use a copy trade service, the income is generated more passively. While the money is still making a profit, you still have time to do other things.
Disadvantages of receiving Forex signals
Here are some disadvantages of receiving Forex signals :
High risk if using signals from robots/software
A pre-programmed program is usually only effective under certain conditions. When the market suddenly fluctuates, they cannot respond flexibly like humans.
Limitation of receiving Forex signals via email/SMS
Additionally, receiving signals via email or SMS makes it possible to miss out on good trading times. The signal is sent to you late compared to real-time, plus the time it takes to set the order, the opportunity to enter a good order will pass. Or that signal is not suitable for the current market.
Receiving signals via SMS/email will cause you to waste time watching your phone. Or open the computer ready to place orders as soon as the signal is sent. If copy trading, the computer must always be open and connected to a stable internet, or use a paid VPS service.
Uncertain
Forex signals providers often display past trading results, demonstrating their performance. However, past performance cannot reflect future results.
It is possible to encounter a scam Forex signals provider
Currently, many forex signal providers are appearing to serve the needs of traders. Therefore, besides reputable units, it is inevitable to avoid fraudulent units with bad signals. If this happens, you will both lose money buying the signal and also lose money investing according to that signal.
See more: Registering broker XTB account on the phone
Where to get free Forex signals?
Receiving free signals will save you some money. Free does not mean poor quality. You just need to know how to select signals from reputable sources and analyze them to place appropriate orders.
Get free forex signals from brokers
Brokers often compete with each other for customers. Therefore, they often create many useful incentives for traders, including providing free Forex signals. Brokers have teams of experts who create forex signals, publicly announced on the broker’s homepage. Besides, you can register to receive signals via email/SMS,… from brokers.
Get free Forex signals from the Metatrader platform
MT4/MT5 platforms are linked to mql5.com. This is the place providing the most reputable quality signals today. If you use these 2 software to trade, you will be provided with free EAs (robots) or signals by mql5.
Receive Forex signals from groups about entrusted transactions
Entrusted trading groups want to attract customers, so they often provide free signals. The most popular are Telegram or Zalo groups. If you want to receive a premium signal, you need to pay a fee. Or entrust traders in that group to carry out the transaction.
How to evaluate quality Forex signals providers
Usually, the supplier’s profile will show a clear transaction history and operating performance. You can base on that to evaluate the reputation and quality of that unit. Some specific information such as:
- Growth: Growth rate of capital by year.
- Profit: Profit.
- Trading Days: Trading days, specifically actual trading days, represent experience.
- Subscribers: Number of subscribers to buy signals.
- Algo trading: Percentage of trades using trading robots (EAs)
- Profit trades: Percentage of winning orders.
- Profit factor: Profitability of the account.
- Reviews from people who have purchased signals from that provider.
Conclude
Although Forex signals bring many benefits to investors, there are also many risks. Therefore, Learn Forex Trading recommends that you consider choosing a reputable signal provider. At the same time, be fully equipped with investment knowledge, only use appropriate signals, and do not depend on them.
FAQ
Who creates Forex signals?
Signals can be generated by professional traders, trading robots, or companies providing Forex signals.
Do Forex signals cost anything?
You can use free or paid signals. Paid signals are provided by experts or signal providers.
Do Forex signals guarantee profits?
Are not. The Forex market is highly volatile and always carries potential risks. Signal users need to clearly understand that trading always involves financial risk. Therefore, Forex signals only support more standard transactions, nothing is certain.
