A Beginners Guide To Forex Signals
When you begin trading you may find you are incurring more losses than profits. While this can be highly stressful and rather deterring, it may be that you have not yet found the correct trading strategy for you. Should this be the case it is advised you examine all aspects of trading including the forex signals factor.
What is a forex signal?
Unlike many of the core forex market features, forex signals are a more complex factor which can only be obtained once you have entered the foreign exchange live market. The signal itself is merely a recommendation about which currency air you should be purchasing and which you should be buying. Many experienced and new traders use these highly convenient signals to make the trading process much easier and profitable.
Many forex signals are generated automatically so you must be aware of potential ‘bugs’ when using them. Should you take the data at face-value there is a greater chance of incurring losses in addition to your profits. As this is a software programme it cannot update the market trends immediately thus will not always present you with up to date data, therefore one should always use the forex signals system as a tool in analysis rather than a basis for your strategy.
Different factors to consider when using forex signals
While the forex signals system is very enticing, there are various considerations one must make before using this tool. These considerations will determine whether or not you should use this particular service or opt for a different one.
1. The cost of the service
Many forex signals services will charge a particular type of fee and you must determine whether it is suited to your personal trading plan. Certain services prefer a one-off option and others require a monthly subscription. You should also consider whether or not it is within your budget as some signal services are quite costly. It is possible to obtain free services but these do not offer high-quality information.
2. The forex signal complexity
A great consideration must be the complexity of the service. You must determine how often you will be receiving advice. Will it be constant releases or a single email daily? This is an important part of a service as the level of information will define how much analysis you will have to do.
3. Who will control all trades
The majority of forex signal services are automated, which means the trading capital is placed into an account and the software will conduct your trades. However, not all traders are comfortable with this computer trading. It is important to note the level of control you have over this service to understand whether or not you can stop losses if required.
The reaction time to the forex signals
When looking at a forex signal service one must be aware of whether or not the information received is useful and can be acted upon. If one is not able to utilise the signal within a few hours of receiving it you should consider the service unreliable. This is because the market will change during these few hours and any trading on incorrect data will be detrimental.
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