Forex signals are a type of tool widely used by those who trade in the foreign exchange market. In this article I will explain what they are and how they work, and some types of signals that exist.
The offer of Forex Signals is high and we can find this type of services practically everywhere.
From brokers, through companies that are dedicated to Trading Signals, or even social trading platforms, access to this type of service is immense, some free, and some paid.
FOREX Signals – What are they?
FOREX signals are signals that are sent to traders, so that they are free from all analysis work.
It is a semi-automatic system because whoever sends a signal has analyzed the market and I think that in the light of their analysis, a certain asset would increase or decrease, but unlike Forex Robots that do everything, including placing operations, the signals only analyze the market and send the information to the customer.
FOREX Signals usually have all the information necessary to be able to open a trade in your account. The signal is sent if the operation is a buy (BUY) or a sell (SELL), in which pair, for which the Strike Price (entry price), Maximum Loss Value (Stop Loss) and Maximum Gain value (Take Profit).
Some signals do not bring SL or TP and it is up to the person to decide where to place these values, or simply the opening signal is sent and then the closing signal, if SL and TP are dynamic, that is, the system that sends them later depending on the evolution of the market and the price of the asset decides to close depending on the conditions at the time.
If you use this type of signals there are two ways, the first is to be attentive to the arrival of the close signal, and the second is to decide when you want to close the signal.
In practice, all the analysis work is done by the system that sends the Forex Signals, only remaining to follow the instructions and put the trade on the account, which takes a few seconds.
Of course the person should always analyze the signal that arrived and not use all the signals without doing a brief analysis.
How can Forex Signals arrive?
There are several ways to receive signals, the most common of which are:
- In the case of being direct signals from your broker, the signals may normally even be within the trading platform. It is up to the customer to see the signal and decide whether to use it.
- They can come from a signal service company. The way to receive signals is very varied. It can be via email, telegram, WhatsApp, PWA application, mobile application, SMS, push notification, in short, there is a wide number of ways that can be used for sending signals.
- Groups of Traders who send signals. There are also many trader communities that via Facebook, Whatsapp, Telegram, Instagram or other media send signals to the group or to each other. These signals can either be paid or free.
- Via the MT4 and MT5 platforms. This type of signal is usually different because it is automatic since that is a tool that exists inside the MT4 platforms all is made on the platform. You can look for signals there, check results, and choose Signals. There are free and paid Forex Signals. You will need to open an account with the MQL5 website to be able to subscribe to those tools. The payment will also be made inside that website.
- Signals by Social Trading platforms. There are some, one of the best known being Zulutrade. Basically, these platforms copy operations of traders who connect their accounts with these platforms. The system is simple.
Those social platforms review all the accounts of the Signals providers to ensure that they are real and that they meet certain requirements that platforms establish.
Then the platform allow customers to copy trades from signal providers. Usually the copy is automatic, functioning almost like a robot.
Signal customers are charged a fee, a commission for each transaction. This commission is then split between the platform and the signal provider.
One of the most used ways these days to send Forex Signals is via Telegram Channels. Clicking on the image, you can find a link to one of the Channels that offer Signals. The signals are free.
Remember that you should analyze the signals received before placing them and that the responsibility for using the signals is yours, so you should always use the signals wisely.
FOREX signals – How do they work?
To use FOREX signals you need two things:
1 – To have an account with a Forex broker
As is normal, you will need to have an account with a broker to be able to trade and access a platform where you can place transactions.
There are many brokerages. The ones below have in common some aspects like their own platform, free training accounts and with lower deposit amounts.
By clicking on the link you can get to know both brokers better.
In addition to the two brokers above that have their own platform, there are also brokers that use MT4 and MT5 which are the most well-known and used platforms in Forex.
The operation of the brokerage platforms above and those using MT4 is different.
You can, if you want, open demo accounts and compare at no cost.
The broker below is an example of a broker with MT4 / MT5.
2 – Subscribe to FOREX Signals
Once you have an account (an old one or the one you opened), you can now subscribe to FOREX Signals.
Just search for one of the existing services and try it. I always advise you to test the service, (those who allow it) and to use it initially in a demo account.
FOREX Signals – Tips about this tool
1. Most Forex Signals can arrive at any time of the day. Be careful to place the Signal as soon as possible.
2. If you were unable to place the signal at the time you received it but the price is still above or below the Strike price according to the above rule, you can always place the signal later.
You have to follow the rule above to determine if there is still time to place the signal (Sell signal to enter above Strike / Buy signal to enter below Strike), because in Forex the key is not time, as for example with Binary Options, but the strike price, you can then place later, although the ideal, as a rule, is to place when it arrives.
3. Strike Price. This is the entry price. In a SELL operation, I am interested in entering above this entry price. In a BUY operation, I am interested in entering as low as possible, so it is ideal to enter a little below the Strike Price.
4. Be aware of important news that can bring some volatility to the market. If you notice that there has been any of this news in the previous 30 minutes, or there will be one in the next hour, be careful.
5. There are several signals that come out during the day, depending on the value of your account you have to make a correct management of the number of open signals on your platform.
If you have a small account, you cannot open many signals open at the same time. It is important to understand what leverage is and how it works, as many transactions open in your account at the same time can lead to problems.
6. With high volatility news (Unemployment Report in the USA, changes in interest rates, etc.) it is worth closing open orders if they have a small gain or a small loss.
Sometimes it is better to be safe than sorry, so at times when volatility or instability is to be expected, it is worth a small loss or small profit rather than waiting and rely on luck to protect you.
7. At the end of the day on Friday it is advisable not to place new signals and if possible to close all that is open. If you have several trades with small losses or small gains it is better to close everything than to leave operations open on the weekend.
We never know what can happen at the weekend, so it is safer to have no open trades.
FOREX Signals – Costs
There are totally free signals, for example directly on MT4, as I had already explained, FX MT4 signals, while others are paid.
Usually the brokers offer free signals or its access is only open to certain customers and accounts.
When they are provided by companies, they are usually paid.
Groups of traders who send signals also can offer or sell them.
If sold, the most common values are between $ 20 and $ 100.
It would be normal for the sold ones to be better than the free ones, although sometimes this does not happen, the paid ones would be those that would normally produce the best signals.
FOREX Signals – Frequently Asked Questions:
How many signals can I receive per day?
The number of FOREX signals can vary depending on the type of service, the strategy used, the days, the hours, etc.
There are days that there may be no signals, like others that there may be several dozen. Ideally, there should be several different signals so the user is able to analyze and choose only the best.
How do I manage the time zone of the system that sends me signals?
Don’t worry about the time zone, just be careful to receive the signal and put it, as forex signals are focused not on time, but on value (strike price).
As long as the strike price of the signal is in accordance with the current value of the price, you can use the signal without problem.
However, there may be signal systems that advise the use of the signal until a certain time after the signal has come out. It is always important to know the system you are using.
What are the steps before placing a signal?
As is known, no signal system or Forex Robot is always accurate, so a check is always advised to decide if the signal makes sense.
This analysis should be done, based on what the market has been doing on that day, based on the news that is coming out or will come out that day (important news can change the market direction or accentuate a trend, so it is necessary to be very careful when trading during important news).
And only then, you decide if you want to use the signal or not.
Final thoughts: Always remember these rules. Past profitability does not mean that it will be the same in the future. The success rate that a system may have demonstrated in the past does not mean that it can maintain it in the future.