The Forex market is the largest and most liquid financial market. It is estimated that over $5 trillion worth of transactions are conducted in it daily. The business of Forex trading has now become so popular that it keeps getting more recruits.
Sadly, the extensiveness of this market has not translated to success for most of its participants. Over 90% of them consistently lose and end up bowing out.
Interestingly, the emergence and adoption of Forex signalsby many of them have helped to improve their odds. Hence, you might want to consider using signals too if you are a newbie Forex trader seeking to succeed or a long-term trader tired of losing.
Here is everything you need to know about Forex signals.
What are Forex Signals?
Forex Signals are messages sent by Forex signal providers their subscribers recommending the entry and exit prices for a currency pair or any other tradable instrument.
The essence of Forex signals is to spare you the time and stress of having to analyze the Forex market yourself. Instead, a highly-experienced human analyst or program does that and informs you when the odds are right.
With a quality signal service, therefore, all you have to do is to make the recommended trades and take your profits. Interestingly, not all Forex signal servicescome at a fee. Many are offered by their providers free of charge just to build loyal bases of customers over time.
Forex Signals: Their Types
There are many types of Forex signals. It all depends on the criteria on which the classification is based. For example, there are short-term and long-term forex signals.
While the former is based on short-term setups in the market and require instant execution, the latter is premised on longer-term structures and usually take a longer market view.
Moreover, some signals are based on fundamental analyses of the market. Others are generated from technical patterns such as candlestick charts, price action, and support and resistance levels.
However, the most widely used typology of the Forex signal consists of manual and automated signals. While manual signals products of human analysts, automated signals, on the other hand, are trading opportunities discovered with the aid of software and robots.
Forex Signals Are They Legal?
Considering the level of effectiveness and the increasing popularity of Forex signals, you might have a concern: are they legal? Well, first, an important fact you need to know about Forex signal providers that they are not professional financial advisors.
Besides, there are fraudulent ones among them out there. While legal signal providers seek to provide genuine value to their subscribers, the illegal ones only want to milk the subscribers of their funds.
Hence, before you choose a signal provider,you should ensure that it is a legitimate one.
Advantages of Using a Legitimate Forex Signal Provider
The use of a legitimate signal service comes with many benefits. Some of them include:
- Improved profitability: The first benefit of using a signal service is improved profitability. The statistics are scary: 9 out of 10 retail tradersfind it impossible to extract profits from the Forex market.With a legal, quality signal service, you will not be one of those.
- Time-saving: Another importance of using Forex signalsis to save time and efforts. A reliable signal service will spare you the time and efforts of analysing the Forex market yourself. All you have to do is to subscribe and profit.
- Improved Trading Skills: Depending on how committed and attentive you are, you can use your signal service to enhance your trading skills. Any time you receive a signal, you might want to find out, through independent research, why the signal service recommends the action type that it does.
- Risk Diversification: With a quality signal service, you can easily diversify risk. Many currency pairs, for example, are highly correlated. A signal service can help you concentrate on your choice financial market (e.g. stock) to trade, while it helps you to profit in Forex.
Comparing Manual and Automated Forex Signals
A common point of confusion for traders seeking to adopt the use of Forex signalsis; between manualand automated ones, which is better? The need to clarify this is especially necessary for beginner Forex traders.
The unique selling pointof automated Forex signalsis that they help to eliminate emotions from the taking of trading decisions. Also, they can be regularly adjusted to factor in changing market fundamentals. As a result, they are usually more preferred.
However, still, manual signalstend to do better often when market situations change.
Before You Choose a Forex Signal Services
As earlier hinted, it can be hard, especially for newbie traders, to identify scam signal providers. However, through some caution and the evaluation of factors considered here, you will be better equipped to avoid them and protect your trading capital.
Hence, the following are essential criteria that your prospective signal service should tick off before you choose it.
- Track-record: Does the signal provider you are considering to use have a proven track record of performance? For how long has it been in business? What is its success rate?What is its monthly pip target? Who are its analysts and can you ascertain their level of professionalism?
- Independent Verification: Scam signal servicesmake ridiculous claims. However, usually, they do not have a track-record of verified results to prove them. This is where independent bodiessuch as MyFXBook come in. They monitor signal companies’ performances over time and determine the effectiveness of their services.
- Customer Support: Does the signal provider have a functional support service? If you run into any glitch, is there a line or email you can contact to communicate your complaint? Interestingly, this is where scam brokers are often found miserably lacking.
There you have it, an essential guide to the use of signal services. 1000pip Builder ticks off these criteria as they are an independently verified signal providing company, with a responsive support service for their clients. You can sign up for their membership here.