Forex signals are another way to say indicators if you really want to boil down the “forex water” to its basics. You know those recipes that say boil the ingredients until the water is absorbed? That is kind of what we are doing here when talking about signals and indicators. You have a variety of indicators like candlestick patterns, red and green arrows, double tops and bottoms, and other patterns on graphs. You can also call these signals because three green arrows can be a good signal for you to buy that currency over the currency that has three red arrows.
Forex Signals are Technical Gadgets
Just as you have gadgets in almost anything you do, forex also has some. If you are a cook or simply like to dabble in the kitchen you know how important having the right utensils can be to a recipe. If you do not have an electric mixer, even a handheld one, you are using your arm to beat dough. It can take a lot of strength and make your job a little harder. Forex signals are technical gadgets that make your work easier.
Let’s look at just one example of signals- arrows. Red and green arrows are something your forex broker might offer you. It will be in the chart section as a choice if they do. Training platforms can sometimes offer these graphs instead. It will depend on the tools you have at your disposal. You may even see a written chart instead of a graphed line. Beside each currency will be two columns with red and green. The number of red arrows tells you if the currency is weakening. Green is for strength. Forex signals should match for the currency pair you trade meaning you have a larger number of red and green arrows for the pair. In fact you want to look for seven arrows for both, with one being red and the other green. It says there is a strong trend for the one currency to strengthen over the other. You can plot out a better profit than if you only use 4 arrows as indicators.
Forex Signals: Don’t Burn the Muffins
You can ruin even the simplest recipe if you miss a step. One reason tapioca pudding tastes so great is the vanilla step at the end. If you forget it you change the taste. It is just like turning up the oven too high when you use a darker muffin pan. You could burn the “muffins” in forex if you ignore the forex signals.
If you miss even a little signal it means you have missed a step in your forex recipe for success. For instance, what happens if you look at a day graph, but you do not sell out that same day? You could have a new pattern the next day based on forex signals at the end of the first day telling you to sell out of your current position. If a triple top is only half formed you might think the trend will continue up, when it is going to reverse.
Get a free Forex PDF PLUS:
- 14 Video Lessons
- Free One-on-One Training
- A 5000$ Training Account
- In-House Daily Analysis
- Get FULL ACCESS