What are Forex signals?

One thing all trading experts can agree on is that Forex signals mean BIG BUSINESS. Most people still want to get rich with limited effort, and the initiators behind Forex signals benefit from this search for easy money. If you think you can get rich by blindly following someone’s advice, you are about to lose a lot of money. Your journey to wealth will end before it even begins.

A trading signal is no more than a trading recommendation. Most trading recommendations are based on a trend or a “hunch”, but whether a trend can be extrapolated depends on many factors. Thus, a common disclaimer in the financial sector is: results from the past never give any guarantee for the future.

So, Forex signals are worthless?

Not at all! Forex signals are vital tools for any prediction; the best trade ideas come from signals. However, you have to keep in mind that a Forex signal is no more than a recommendation. Whether or not you follow the recommendation, common sense and technical analysis should always be applied to your trades.

When a certain currency pair is increasing quickly in the morning, you may expect that it will continue to rise all day. Speculation from other traders may corroborate your expectation. What if at noon, a country’s central bank is making an announcement that will substantially diminish the price of the currency pair? Forex signals can only be used as guidance to inform a hunch or your search for trading opportunities.

Forex signals by professional traders with a proven track record

When we are talking about trading signals, we are referring to trade recommendations that are issued by a professional trader, a trader robot, or a trading program. Forex trading signals typically provide you with an opening price, opening time, the take profit target (BUY), and the stop loss target (SELL).

There are several Forex signals services that have very good reviews, but, of course, these trading signals are used by Forex traders that analyse the market themselves, and do not blindly follow the market signals provided.

Several providers of Forex signals have different reviews. Do your research before you compromise yourself to a FX signal subscription. Signal scams are prevalent, and you may be buying worthless information based on incorrect or outdated information.

Forex signals scams

As you can probably imagine, signals are not an exact science, so it is very difficult to distinguish a scammer and it is nearly impossible to prove someone is scamming. To give bad advice is not illegal after all, and a scammer’s alibi is always “good intentions”. However, if you base your buying and selling strategy on this bad advice, you will lose the money that you paid for the signals, as well as the money you traded following the scam signal.

If companies offer you great results without any verifiable proof, you can usually assume it is a scam, and you should be very careful. Free Forex signals are also available, but you can lose a lot of money when you trade on false information, even if this information is for free.

There are also Forex signal providers who offer to trade your money. You should never get involved with these businesses, as you are most likely going to lose all your money.

As the Forex market is less regulated than other trading markets, and the enormous size of it attracts a lot of crooked individuals, you should always remain suspicious. When something appears too good to be true, it almost certainly is too good to be true. If you have any doubts about a company, regardless of how attractive the offer might be, avoid wasting your money and do not get involved.

What are the costs of Forex signals?

There are many free Forex signals out there, but of course, all of these providers try to upsell you something, as they have to earn their money somehow. Never expect quality when it is for free!

The paid ones instead can offer you great value, if you use the right signal services the right way. Costs can vary from below 100 dollars to thousands of dollars per year. This might seem like a lot of money, but when you consider that you could make a five or six-figure income with Forex trading, a thousand dollars is a minor investment – if you use signals the correct way.

What are the best Forex signals for starters?

Your analytical skills are the best signals in seeking trade opportunities! We always recommend beginners get to know the market. To understand how Forex trading works, read the news and drown yourself in as much as information you need to understand market patterns. Identify which economic factors have the greatest influence on rates. It is a akill that cannot be learned by reading, but by doing. Only in this way can you discover your best trading strategy.

Of course, trainings can help you to understand trading strategies and how to approach the FX market. When you have selected your focus area, you must understand the major factors that influence the Forex market. Once you understand the FX market, it will be much easier to interpret Forex signals. You will be able to distinguish which Forex signal sellers are offering garbage, and which ones sell valuable information.

Over time, you also learn how to interpret valuable information. This skill will save you a lot of time when you are able to see possible trading opportunities more quickly. With your newfound analytical skills, you can distinguish if the trading opportunity applies to your portfolio.

How do I create my own Forex signals?

As a Forex trader, you can use an expert’s opinion to advise you on where to look for opportunities, but an experienced Forex trader creates their own Forex signals. Listed below, you can find the three steps to designing your own Forex Signals System.

Step 1: Identify the key indicators that enlighten a certain trend.

The biggest challenge in Forex trading is identifying trends as soon as possible. The longer a trend continues, the smaller your possible profit becomes. A greater number of traders also see the trend and influence the rate with their trading actions.

The most successful traders use moving averages to distinguish real trends from false trends. Most traders use both a real-time slow-moving average and a real-time fast-moving average to define new trends.

Typically, when the fast-moving average shows a turning point, the slow-moving average is used to confirm the trend a while later; both are good indicators a new trend is emerging. Of course, as we must continue to emphasize, trends are never a guarantee, just a recommendation.

Step 2: Define the indicators that help you to confirm the trend.

You can see a trend in your charts, but how can you confirm it is actually a new trend, and not just a glitch, after which the old trend will continue? You need to use other sources to confirm the trend. This is often completed by using third party indicators. When you are thorough, you do not get caught following false trends and betting on the wrong horses.

Step 3: Set your risk, entry level, and exit level

Next, it is time to set your risk level and the levels of entry and exit. By honoring these numbers, you make your trade purely rational, rather that emotional. You define how much you are willing to lose on a trade and the number of pips you consider a successful trade.

Do not get overwhelmed by your increasing profits. The trends will turn around at a certain moment, and you want to get out of the trade before that moment occurs. If you have done your job analyzing the trend, you will know what to expect and when you have to settle the deal. By doing the work before trading, you maximize your profit.

Having said this, it is most important to write down all your rules and conclusions. You will know what rules to follow, and what you need to learn. In this way, you can improve your skills and generate the most reliable Forex signals. Do not forget, you are the only person who is able to create the most reliable Forex signals for yourself.

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