Everything You Need to Know About Forex Signals in 2023
Following reliable forex trading signals can make a real difference to your trading career. The right service provides you with alerts that help you make an informed trading decision.
Over the course of this expert guide, our professional team of traders and analysts lists all the steps to selecting a trustworthy forex trading signals provider. Additionally, we cover free signal services, and the pros and cons of using forex signals.
Keep reading to discover the necessary steps needed to receive your first forex signal, and to confidently execute a trade.
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What Are Forex Trading Signals?
Forex signals are recommendations for buying or selling a forex pair or any other financial asset, and they are generated by analysis. The signals are built on the back of statistical and quantitative technical analysis, but also a fundamental reading of events. This depends on the analytical approach of the team behind the service.
Most forex signal providers do all the work a trading robot does, except for the execution of the trade. However, there are services which act like robots and execute trades on your behalf, based on the trigger they generate.
Therefore, there are two main kinds of providers we will talk about when looking at forex trading signals: the manual signals, and the automated ones.
Manual Forex Trading Services
A manual forex signal is usually sent to your inbox, smartphone, app, or on a website’s dashboard. No matter which format, it will contain detailed data of how to act upon a trade. Manual alerts are usually generated by hand by a team of analysts. However, they can also be produced by an algorithm, which is a piece of code that acts upon pre-set parameters.
Once you receive the signal, you can decide whether to execute the trade or not. With that option, you have full control over your trading account and you can make your own decision about which trades you want to use, and avoid the others you don’t feel confident about.
Automated Forex Signals
An automated signal provider makes all the analysis and then sends a trigger to your trading account directly. So, it actually opens positions on your behalf without your involvement. As many signals require a quick execution due to its timely nature, the automatic option is great for traders that don’t have time to check all the information they get.
What Data Does a Forex Signal Contain?
A forex signal usually contains all the info or data you need to open an investment position.
Manual Forex Signals
With regard to manual forex signals, it will always contain the following information:
- Entry point, profit-taking, and stop-loss levels for the given trade.
Particularly good signals may also contain some of the following:
- A chart showing the analysis and indicators supporting the trading hypothesis.
- Risk associated with that trade.
- Background or back-tested results for the given trading hypothesis.
Automated Trading Signals
When your forex signal provider is an automated service, or a robot that executes trades on your behalf, you will get performance reports that should include the previously executed trades, prices, the outcome of each trade, and the overall performance for a specific period. The specified period can be anything ranging from a week, a month, or the current year.
Some brokers provide signals and recommendation services across both automated and manual triggers. Check out the TopRatedForexBrokers comparison list to identify the services that each broker offers to their clients.
The Pros and Cons of Using Forex Signals
Our team of experts have collated the most important things to consider before selecting a signal provider.
You should have a signal provider because:
- You will have another pair of eyes looking for trades, so it helps you keep constantly updated and save a lot of your time in the process.
- You can accept or reject signals depending on your own analytical confirmation, so it serves to back up your analysis.
- You are trading along with reliable forex signal providers that have successful track records, which helps improve your success rate.
- Signal providers also give educational and coaching services to their customers. Therefore, you will build up your skills while winning pips with their analysis.
You might want to think twice about a signal provider because:
- You will depend heavily on the ability or veracity of a third-party analysis that is not your own.
- Your trade is driven by a robot that sometimes doesn’t adapt itself to exceptional economic events and outliers.
Can I Get Free Forex Signals?
Yes, you can. Free forex signals are available and can definitely help you in the making of pips.
The TopRatedForexBrokers team of analysts acknowledge that both paid and free forex signals have the capacity to help you make profitable trades; however, each kind of service must answer to different expectations.
Should you choose a free or paid signal provider? Firstly, check out who is behind that service. If it is free, what is their agenda? Most of the free forex signals that you will find in the market are really selling other products or a more enhanced version of the same product. Also, it can be free in order to push you towards a hidden associated broker.
Another disadvantage to consider is that since it’s a free service, the analysis is not always accurate. The best signals are reserved for the premium subscription, or even for the analysts themselves.
However, free forex signals are also a way to get a taste of the service before subscribing to it. So, you can try it in the same way as you would test a technical indicator, an expert advisor, or a new strategy in your demo account.
Who Provides the Best Forex Signals?
We want to make your life easier and so we have asked our panel of experts to handpick the best of the best forex signals providers in the industry.
That being said, remember that your personal and financial situations are specific to you. It’s not a one size fits all approach, so what is best for one may not be the best for you. Do your homework and research about the trading signals that you like and be sure that the service adapts to your trading profile, and not vice-versa.
Now, ladies and gentlemen, announcing the best picks:
Best Forex signals
How do we pick the best Forex signals?
Picking the best forex signals is not as easy as it sounds, as each service responds to different specifications or triggers. But we do have a checklist that we work through, before considering the veracity of any one service.
- User reviews: We check what users are saying about those services. If they have favourable reviews, it is always a good indication that their service is valid.
- Price of service: Who has the best price/quality ratio? We understand providers must make a living, but we don’t want to pay the moon either. Only those who are providing the best track record at the most competitive prices rank at the top of our lists.
- Established track record: This is a crucial factor when identifying the best signal provider, as not many services publish their results on an independently-verified platform. If the provider has a proven track record of gains, it is a real high point to take into account.
- Verified statistics: We keep an eye on the statistics of the service, as it will show us how they lose money, how they win, what their win/lose ratio is and the risk associated with each position.
- Signal frequency: We check out the number of signals the provider sends to their customers. Do they have daily, hourly, or weekly triggers? It is crucial because it will influence how many times you will trade per day or week.
- Automated or manual service: Do the providers offer automated services that you can activate once you have built up enough confidence through performing manual trades? Also, do they offer copy-trading?
Having a reliable forex signal provider is one of the best decisions you will ever make when it comes to your trading career. It can help you to maximize your wins and avoid painful losses.
Are forex signals illegal?
Selling forex signals in itself is not illegal at all, but depending on your country of residence, it should fulfil specific regulatory rules. In most states, you should be licensed and regulated to be a financial advisor, but you are allowed to give away trading information. That being said, your average Joe should refrain from giving trading recommendations.
Are forex signals reliable?
Yes, forex signals can be reliable if you choose the right provider. Our recommended forex trading signal providers undergo our rigorous vetting process. Picking one of those helps you avoid the many scams that flood the market.
Are forex signals worth it?
Well, it depends on how much money you are expecting to invest and to make in your winnings. Despite the fact that many forex signal providers are guaranteeing you a million dollars in the first month, be aware that it is usually not that easy. Check their track record and their percentage gains, then do your maths with your account and decide if the potential profits will cover the price you are going to pay for a subscription.
Which is the best forex signals app?
In the age of the technological revolution, almost all brokers and signal providers offer apps to their customers. What is the best? Decide upon your list of deal breakers and then look for one that fulfils all of these criteria. That will be the one you are looking for.