If you are new to the world of Forex trading, you may have thought about using forex trading signals to help you speculate in the stock market. Indeed, following someone else’s forex signals can obviously save you a lot of time and energy, but it can also teach you new trading methods and strategies.
This is all awesome, right? Where is the trap?
The hard part is finding a trustworthy forex signals provider. Knowing this, we decided to put together this article featuring the best free and paid trading signal providers.
To complement the article, we will also discuss the tools to generate your own trading signals and become a standalone trader.
What is a Forex Signal?
A forex signal is an alert on a trading opportunity, usually in the currency market, but also in other markets. These forex signals are provided by experienced traders or specialist firms, free of charge or for a fee, through written messages. Trading signals help novice traders with exact transaction details recommended by forex signal providers in real time.
Trading signal providers will tell you when to buy or sell an instrument, and where to set exit orders (take profit and stop loss) to take profit or close the position at an acceptable loss level if the market moves against you. The best trading signals will also explain the reasons for this position.
This means it’s a great way to try out new strategies and see how other traders are making their decisions.
However, you need to have trust in the provider to follow the received forex signal, which is why it is important to choose a trader who can justify their trading transactions with sound reasoning. You want to receive trading signals from someone who you think has good strategy and logical reasoning behind their trades.
There are a lot of signal providers on the market. So it is difficult to know who is really trustworthy, who gives high performing forex signals. This article will help you see more clearly.
Types of Forex Signals
There are four main ways to use a forex signal, and the choice of trader will depend on their goals, time available, level of activity and control desired, and personal risk profile.
Forex Correspondence Signals
In this case, the trader always manages his own trading account and simply follows the positions provided by the signals, entering the positions himself on his trading platform.
This allows the trader to have a greater level of confidence, while not letting a third party have full control over his trading account, but he will have to bear psychological risk.
This is because when the signal provider experiences a series of losses, it is sometimes difficult for the trader to continue to follow him, and potentially miss the time when the gains will return.
The forex signal is in this case communicated by message, which can be in the form of an email, a text message or via a mobile messaging application, it is then up to the trader to do the rest.
These are often paid forex signals.