Knowing how the market will move is impossible, but it’s not like there are no indicators. New traders may have difficulty recognizing these indicators, affecting their ability to react promptly. This is why forex trading signals are so useful. They can help you determine and recognize the right opportunity at the right moment. As a novice trader, it’s a chance for you to set up a system that will alert you when certain trading conditions are met. You can immediately go to your chosen app and trade by receiving a notification or even an SMS message.
Here’s how you can access these forex trading signals and use them to the best of your ability.
How to access Forex trading signals?
The exact location of the signal system depends on the platform you’re using. However, this is not the end of the story. The majority of trading signals come in several different forms. For instance, they may be:
Free or paid signals are self-explanatory. On the majority of platforms, this is a paid feature. If you have access to free signals, it’s either a plan with limited features or a trial.
Entry or exit is about when you’re notified. If you’re notified when there’s an opportune trade on the market, it’s a paid signal. If you receive an alert when it’s time to close your position, it’s an exit signal.
Lastly, you can be notified either as a result of a human analysis (manual) or an algorithm recognizing something on the market (automatic). It depends on whether you trust the algorithm or the human experience more.
Stop-loss and take-profit signals
Stop orders are, arguably, the most important aspect of trading automation. Their main role is to notify you when it’s time to take action.
The reason why they matter is that they make your trading more strategic and less impulsive. You see, some people approach trading like gambling. They see a downward trend and assume it has to go up. It’s the same as a person on a losing streak believing that their luck “has to” change. This is the so-called positivity bias, which can cause several problems for any trader.
With a stop order, you create a strategy while still cool-headed. For instance, you limit your losses to 1-2% of your total trading budget value. Then, you set your take-profit (opposite to stop loss) at 6-7%. If you act on this strategy consistently, you can be profitable with just 25-30% successful trades.
Setting action point
Another way in which people use forex trading signals is by setting an action point. It’s not that hard to understand that currencies are affected by local political occurrences and markets.
For instance, after BREXIT, the GBP’s value decreased significantly. After the 2016 elections, the same happened with USD. Keeping an eye on these occurrences and waiting for the first indicators of a trend could be a great way to profit from the FOREX market.
Knowing when to buy or sell is great, but receiving a signal that tells you to prepare for this is even more important. This is one of the ways you can use these forex trading signals.
Just keep in mind that every type of trading has its own set of rules. Cryptocurrency trading and even commodity trading are vastly different from the FOREX market.
Forex trading signals are not just for inexperienced traders
We’ve mentioned earlier that setting trading signals helps inexperienced players and speeds up their decision-making process. Well, this is just one part of the whole story. The thing is that it’s not just for inexperienced traders.
Sure, by setting up the system, new traders will get first-hand experience in recognizing patterns and figuring out how the market works as a whole. In other words, it definitely curbs the learning process.
Still, it makes decisions quicker, even for experienced traders. Anyone who has ever traded in the FOREX market knows its volatility. It’s not just about making a decision; it’s about making the right decision at the right moment. Miss the moment, and the logic behind your decision doesn’t matter.
Because these signals can be programmed to reach you via several means, they are very effective at alerting you. Sure, you can miss an email but an email, a notification from your app, and an SMS are much harder to miss. In other words, a good forex trading signal system keeps you on your toes.
The last thing you need to understand is that signals are just that – signals. How you react to them is what matters the most. In fact, one could even argue that how you set them up is what makes a difference. We’re still far from technology to “set the signals to make money.” This means you must understand what drives the market and determine how and when to set them. There’s just no way around it. Still, they can help speed up the learning process and help you get where you want to be much faster.