Forex trading can be a very lucrative endeavour. It can also be highly interesting, too, because of the day-to-day challenges and excitement it offers. Perhaps, those two benefits are the primary reasons so many are becoming increasingly attracted to it.
However, becoming a successful Forex trader is not as easy as it might sound. Apart from the hard skills Forex trading requires, it also requires mental strength. In addition to losing money, a failed Forex trader can become psychologically damaged.
In light of that, before you take the plunge into it, you have to work not only on your skills but also on your mental fortitude. Even at that, a combination of the two might not make you win ultimately, but they will improve your odds.
Else, to succeed, you might consider the use of a signal service. In recent years, this has become a well-tested means of profiting in Forex trading. This guide aims to show you how you too can start using a signal service to become a successful Forex trader.
What Are Forex Signals?
Forex signals are recommendations of trades to take. They seek to help Forex traders recognise high-probability trade set-ups which they can cash in on to profit from the market.
The use of signals is becoming increasingly adopted by Forex traders, perhaps, because they have proved to be highly effective. You too can start using them. But before you do, you should first know about the options available to you.
Types of Forex Signals
Naturally, expert Forex traders pay attention to a wide range of tools in analysing the market. Some of those things include news, geopolitical events, and market trends.
The Forex market is subject to the impact of a range of factors. Some traders focus on a set of those factors while other traders focus on some other sets. Interestingly, they all end up recognising opportunities in the market.
Forex signal providers are like that, too. Some of their signals are created from the evaluation of fundamental factors such as inflation rate, unemployment, and GDP. These are known as fundamental signals.
Likewise, there are signals that are established on technical analyses of the Forex market. These signals are generated based on chart setups and the use of a wide range of indicators and other technical tools.
Additionally, there is a third group which includes signals that are formulated based on the analyses of a combination of both fundamental and technical factors.
Which one should you use? You decide. But what is important is that you must verify the performance of whichever one you choose.
Furthermore, Forex signals are also classified according to the ways by which they are generated. This way, there are manual and automated signals. Manual signals are as named; they are generated by the efforts of human analysts, who study different kinds of factors to identify potentially profitable market moves.
However, the trader still has to place the trade recommendations himself via the trading platform. A style of manual signals is copy trading by which subscribers can copy the trades of highly profitable traders.
On the other hand, automated Forex signals are the new in-thing. They are fast, highly efficient, and so easy that their subscribers may not even have to lift a finger in using them. This is so because they are based on programs which identify and execute opportunities in the market.
Even though manual signals were the first idea of signals, the automated signal system, also known as algorithmic or robo-trading, has continued to gain in popularity since its first emergence in 2010.
Using Forex Signals
Forex signals should be as specific as possible. They should state the prices at which the trader should enter, exit, or even hold a currency pair or any other tradable instrument they recommend trading.
Also, they should be communicated via real-time and convenient channels that will make for timely and easy execution. As a result, the most preferred methods of receiving signals are:
- Social Media Pages (e.g. Twitter, Telegram, and Facebook)
No matter the method you choose, ensure to make sure that it is convenient for you. A signal that you cannot execute on time is as good as no signal at all, no matter how reliable it may be.
Most traders tend to prefer automated signals because they remove the need for additional interpretations and emotions.
Consequently, they save time and have been proven to perform better than their manual counterparts in this regard.
Manual signals, however, tend to do better in ranging/consolidating conditions when there are no definite patterns to the market. That confirms that sometimes, following experience yields better than following rigid statistical analyses.
Most importantly, however, you should ascertain, through dedicated research, the authenticity of any signal provider you are considering using. A signal service, before it can be worthy of your use, should pass the litmus test of quality.
Thus, you should yourself questions such as: is it authentic? What is its track record? How does it generate its signals? Does it publish its performance from time to time? Who is its head analyst? Have its signals been independently verified by third parties such as MyFXBook? If you can’t ascertain the authenticity of a signal service, stay away.
Fortunately, with over 10 years of experience, 1000pip Builder is a genuine signal provider that has the performance of its signals independently monitored. You might want to consider using them.
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