What Are Forex Signals?
Traders of forex all over the world use forex signals as a reliable method to help decide when to enter a forex trade and whether a trade is worth it. Forex Signals are one of the many tools that novice to experienced traders utilize to help make critical decisions in the fast paced world of forex trading.
Forex Signals are identifiers that provide key information to the trader so that they can decide whether they want to enter a trade or not. They assist in alerting the trader when favorable conditions arise, allowing the trader to focus on other aspects of forex while the computer does the work.
Forex Signals are either manual or automated. They can include humans, trading software, or forex robots. These signals are sometimes made available for free, however you will usually find them to come with a price tag. If you are considering purchasing
a forex signal program/software, make sure to do your research on the validity of whichever programs you are interested in, as crappy products for this type of service are dime a dozen.
Forex Signals help you by alerting you (via SMS, email, etc.) on when a certain situation arrises that may be profitable to you, the trader. To determine when you are notified, the trader usually customizes his own settings to his liking. If you are inexperienced and are unable to identify profitable opportunities, it is strongly recommended you learn how to trade forex first.
Once you are familiar with forex markets and are able to start trading comfortably, forex signals are a great way to help make the transition from breaking even to making lucrative trades. Using forex signals acts as a peace of mind since computers are able to catch trends and patterns that humans might miss, similar to the way stop loss orders are used.
Forex Trading With Signals
When you are trading the forex markets, a signal based trading system can save you countless hours of research time. Timing your trade is essential in developing a productive trading system, and online signal providers can eliminate the substantial time it takes to follow the markets and time the trade.
That said, trading signals are beneficial in trade timing but cannot replace a solid systematic plan. Many novice traders expect the signal service to do all the trading for them. Unfortunately, this is not the case. It is necessary to develop skills pertaining to money management, probabilities, and the risk/reward picture.
This is why the best advice I give to beginner traders is to not only trade forex with signals and stop loss orders, but to have a solid money management plan.
Without a money management plan the trader will eventually fail; the trader must develop a plan to allocate funds based on possible losses. Novice traders are typically more concerned with how much they can make on a trade, while they should also be concerned with how much they can lose on a trade.
This isn’t to disappoint you- it’s just to help you stay on your toes.
Trading signals are based on probabilities. Do the math.
If a trader were to develop a system that had a 50% win ratio and paid out $100 for each win and $50 for each loss, this would be a spectacular result. Many signal providers offer signals that produce 80% or better winners. Novice traders still manage to lose money because they will not discipline themselves enough to stick to a solid money management plan.
The trader needs to select a signal service, learn how to trade it, and initiate the money management plan. Every trade requires two exit strategies. The first exit is the stop loss order, the maximum amount you will lose on the trade. If a signal has a win ratio of 75% then we know it will fail 25% of the time.
The signal provider will usually provide a lot of automated help (telling you when to enter/exit a trade), but you should take the “learn and earn” method. The trader needs to take an active role and participate in the trade, which will continually teach you in real time and help you get to the next level as a forex trader.
Nobody is going to make you wealthy except yourself.. that being said, getting equipped with the proper tools will only increase your chances of cashing out big time.
Why I Recommend Forex Trading With Signals
Myself and my trader friends are all huge proponents of forex signals.
The more you trade the more knowledge and random information invades your brain until you’re unable to logically handle all the data that’s coming at you. It only makes sense to let a computer do the work that you don’t have to do, so you can focus on more important things and the bigger picture.
There’s an insane amount of both free and paid resources available to forex traders these days that can only help you be a better trader.
No matter your experience level, I suggest you be wise and make use of these tools available to you. I have colleagues who make 7-figures a year solely through forex trading and swear by using signals to help them trade.
Learn To Trade Forex
Forex Trading Signals are meant to be used when you are already familiar with basic strategy. If you are not, it’s important to educate yourself on the ins and out of the forex markets.
If you still do not know how to actually make trades in forex, please do not start by purchasing a forex signal program and dumping money into a forex broker.
If you want to learn everything you need to know about forex and more, go here to read about a course that will get you from complete novice to educated trader in a matter of weeks.
Also, make sure to grab your Free Forex Trading Fortunes PDF below.