Conducting fundamental and technical analysis gives jitters to Forex traders.
But without a thorough analysis, a Forex trader cannot forecast the market and price movement. Thus, planning a trading strategy without analysis is not a smart move. Traders can benefit from the best Forex signals to understand the market.
Forex signals are a blessing for Forex traders who don’t have time to conduct extensive market research. They can use these Forex signals to devise their strategy and protect themselves from the negative market condition.
Let’s take a deeper look at the term Forex Signals…
What are Forex Signals?
Forex signals refer to short messages or alerts sent by the signal providers to traders. These messages contain information about the market based on the analysis derived from technical indicators and analytical programs.
The Forex signal provider delivers the signal via text messaging apps like WhatsApp, Telegram, etc. The provider sometimes also emails the signals.
The trader can use the Forex signal to identify potential trading opportunities and open timely trades.
What are Forex Signal Providers?
Forex signal providers are traders or companies conducting analysis and sending out the information to traders.
Most of the signal providers curate and send out information to their subscribers based on:
- Technical chart analysis
- Fundamental news analysis
- Or a combination of both the analysis
The signal-providing company will generate trade notifications to its subscribers whenever certain currency pairs indicate profitable trading opportunities.
Forex signals provide information for a short time. As they are time-sensitive and can be implemented for a short period. Forex signal providers are broadly categorized into 2 types:
1. Technical Analyst
Technical analysts create Forex trading signals using technical indicators and daily price charts. The provider uses support and resistance level, candlestick pattern, and other technical tools and indicators.
Many traders prefer signal providers to be technical analysts. Because technical analysts backtest different trading strategies on past data. Thus, they are familiar with the outcome of the trade.
The second type of analyst includes:
2. Fundamental Analyst
Fundamental analysts derive market information through important economic, regional, and political news. A fundamental analyst researches a country’s inflation, monetary policy, employment level, interest rate, etc., to forecast the currency’s price in the open market.
What are the Types of Forex Signals?
Forex signals are broadly divided into 2 types:
- Free Forex Signals
- Paid or Premium Forex Signals
Let’s discuss both types in detail.
1. Free Forex Signals
Some traders and signal-providing companies offer their services free of cost. This might make you think that free forex signals are unreliable. However, that’s not the case.
Some companies provide the best Forex signals for free. You must conduct thorough research to find the best free Forex signal.
The other type of forex signal is the premium signal:
2. Paid Forex Signals
Some traders and companies charge fixed monthly fees from their subscribers. Premium signal-providing companies charge their services from $75 to $150 per month.
Experienced forex traders and signal companies use advanced technical programmes to analyze and send information about potential trading opportunities.
Many advanced traders use premium signals to get notified about profitable opportunities. Thus, they don’t mind paying a few hundred dollars. However, beginner traders can use free Forex signals.
A free Forex signal will give him the necessary information about the currency pair, price, order type, entry, stop loss, etc. A trader can easily devise a solid trading strategy using the basic information.
How to Get the Best Free Forex Trading Signals?
Choosing the best free forex signals is not an easy task. Many scammers in the market claim to provide the best signals for free.
The trader is often required to sign up with a broker to avail the signals. Or sometimes, the signal provider gives only half the information. They require the trader to pay the amount to view the complete information. Moreover, some scam signal providers do not provide correct updates. Due to inaccurate information, a trader suffers from losses in the forex market.
Hence, choosing a signal provider shouldn’t be an impulse move. It should be done after researching different signal providers, comparing their features, and reading the reviews shared by real traders.
By the way, here’s a free Forex signals provider that actually wins – you must check it out:
The Guide to Select the Best Forex Trading Signals Provider
A trader should look for the following signs before signing up with the signal provider. The first thing to look for is:
1. Professionalism and Transparency
Forex signal providers should have consistent performance records. Furthermore, they shouldn’t make false claims about the signal’s winning rate. If a signal provider claims to have a 100% winning rate, beware of it.
Forex is a volatile market, and a 100% winning rate is impossible. Even successful traders cannot win every trade.
Hence, select the signal provider that is transparent about its record and swiftly sends time-sensitive updates.
Unfortunately, not all signal providers are reliable and well-reputed in the market. Many scammers do not have the best interest of traders.
Therefore, read tons of online reviews and ask expert traders about the signal provider. Reading reviews on reliable platforms and forums will provide insight into the signal provider’s service and the preciseness of the information.
3. Winning Rate
Newbie traders have a misconception that a high winning rate of signals ensures better performance. Many traders, affiliates, and websites claim a 90% to 100% win rate to attract beginner traders.
Thus, do not fall for this trap. Select a signal provider with a good risk-to-reward profile.
Do not expect your signal provider to always provide you with winning trades. Losing trades is inevitable in the Forex market. Even experienced traders face setbacks in the market, and that’s totally okay.
A smart trader understands the risk factor and equips himself to counter it. Hence, no signal provider can always provide positive returns. There will be rough patches and drawdowns.
Make sure you ask the signal provider about their drawdowns.
5. Alert Type
The last thing to check in your service provider is the channel he uses to send updates. Some free forex signal providers publish the information and snippets on social media. Others prefer to send it via email, text, or WhatsApp.
The Bottom Line
Forex signals are of extreme help to traders to gauge the market and understand market trends. There are plenty of options for Forex signals. Some of the best service providers charge a monthly fee for sending updates.
If you are new to the forex world and don’t want to pay for signals, free forex signals can help you. They will provide the necessary information to formulate a remarkable strategy and identify the profitable trades.