There are many Forex trading signal providers exist all over the internet. Most of them are paid Forex signals but you can also find free signal providers. So what are the benefits of forex signals? Are Forex signals reliable? Or should you use forex signals? Most of the traders are willing to try Forex signals but they are wondering if those signals are profitable or not.
With the rising popularity of Forex trading, the number of Forex signal providers on the internet has increased considerably in last few years. Although this increase in signal providers seems to be an advantage as more options are available, there are many unreliable signal providers among them. So, particularly when you are trying free signal providers, I’m suggesting you to try those signals that will come to your phone or pc on demo account before without risking your money on real account.
Thus, you can see the success rate and trustworthiness of the signals and make your final decision. If you want to try them with your real account, I recommend you to keep your transaction size low at the beginning. After at least few weeks or 100 orders, you can increase the lot size if you are satisfied with the service.
For me, the best advantage of Forex signals (if they are profitable and reliable of course) is when you don’t have time to analyze the markets, you can catch the opportunities within the day. Besides, if you are new to the forex trading and still learning how to analyze the markets, you can utilize the benefits of forex signals and still make some profit.
What are Forex Trading Signals?
As you know, it is possible to open both buy and sell positions in Forex markets. Forex signals are suggestions that tell you entry level, stop loss level and take profit level of a buy or sell trade. They can be sent by real analysts or by trading robots via SMS, WhatsApp groups, email, mobile apps or trading platforms.
A Forex signal alert can look something like this:
EURUSD / BUY / Entry Level: 1.1150 / Take Profit Level: 1.1200 / Stop Loss Level: 1.1100.
This is an example of EURUSD buy signal. As you can see, the signal provider notifies the trader with direction of the trade, currency pair, specific entry, take profit and stop loss level.
Two Types of Forex Trading Signals
I can divide the Forex Signals into two groups: Manual Forex signals and Automated Forex signals. In a manual forex signal, a real trader or analyst who sits in front of the computer sees an opportunity as a result of the fundamental and technical analysis he has applied. After trader makes his decision to buy or sell, he will send the signal to you. And you will open the same trade if you want to.
Second type of Forex trading signals is automated signals. This type of signals is produced by a system that was coded by a trader. In this type of signals human psychology is excluded out of the equation and signals can be produced 24 hours of a day. I think those are the most important features of automated forex trading signals. However, these systems are needed to be well programmed through collaboration between a professional forex trader and a coder in order to have successful outcomes.
If you are curious about my own opinion, I prefer manual signals compared to automated signals because I think fundamental analysis is very important in order to become a profitable forex trader. Unfortunately, automated Forex signals can’t apply fundamental analysis.