What are Forex Signals
Are you looking for the best definition of what are forex signals? Well, you are in the right place. The best answer to your question is: forex signals are advice to open a buy or a sell position in the forex market, at a set price, for a possibly profitable trading opportunity, and generated by human or automated analysis of a currency price action.
Forex signals are generated with a recommendation to Buy or Sell a currency pair at a set price, a Stop-loss level (SL), and a Take-profit level (TP). A practical example of a common forex signal could be: buy the EUR/USD @ 1.09000, with SL @ 1.08800 and TP @ 1.09600.
In more detail, a forex signal is produced when a trader, or an analyst, sees an opportunity to enter the forex market with a buy or sell order, with the intent of making a profit. Forex signals are generated through a trading strategy with the help of technical indicators, or automated software applied directly into the price chart of a currency pair.
Forex signals created by human hand, traders or analysts, rely mostly on the trader’s experience and its visual interpretation of the price action for a currency pair, like the EUR against the USD, and technical indicators, used to identify possible profitable trading opportunities.
Forex signals generated by automated software follow the same set of rules or principles created through human analysis, but with the potential of reading the price action of off the charts, faster and without the interference of human emotions. Not to mention, automated software can be programmed to use an infinite number of technical indicators, and to read the unlimited data.
Now that you know the basics of what are forex signals, continue to read this article to find out answers to other related questions you might have.
Table of Contents
- Free forex signals: How good are they?
- Forex trading signals: Trading rooms and social trading
- Best forex signals: Follow and copy expert traders
- Forex signals providers on Telegram, Facebook, and other social Apps
- Forex signals Apps: Trade on the go
Before diving into the forex signals secondary market, let’s look at the reasons why some traders would consider using this type of service. Initially, at the beginning of their trading career, every new trader thinks it can master this highly-volatile market in a couple of months when in reality it takes an average of 8 to 10 years to become a profitable trader.
Thankfully, the forex signals services exist, so more experienced traders can somehow teach new and inexperienced traders how to find good trading opportunities and make some profit. But why do traders’ resort to these services? The reasons are several actually, but the most common ones are inexperience, greed, and “vengeance”.
Perhaps one trader is just starting its forex trading career and isn’t yet confident in its market analysis skills. Perhaps another trader would like to make loads of cash to pay for its 5-star holidays and that dream Ferrari. But the most common reason why traders use forex signal services is, in fact, retaliation.
Several traders, after trying their trading skills on the forex market, and possibly getting their accounts blown-up a few times, and perhaps ending losing a few thousand for the broker, are now on “revenge” mode. They can’t trade successfully and make consistent profits, so they decide to try “just this last time”, through a forex signals service.
Free forex signals: How good are they?
And here we are. Considering, first of all, the free forex signals and asking if they are good or a waste of time. Well, yes, it is possible to find multiple free forex trading signals, offered by several websites and traders.
But, as a matter of fact, in this world nothing is for free or, at the very least, we get what we pay for. There are many good signals providers out there, but, unfortunately, there are also many who are just looking to turn a quick buck, so, be careful when choosing a free forex signals provider.
If you’re considering using a free signals service all you have to do is open your Google browser, type the search term, and select one through the several results given out. Or if you like to trade on the go, subscribe to a free forex signals Telegram channel or even a free signals provider on Twitter.
There are quite a few ways of receiving free forex signals, as explained above, but we are not presenting you with a comparison table for the different providers, and telling you which one is the best, instead, we will try to illustrate in this chapter what you can expect from these free services:
- Many providers offer free signals on a trial basis. After that trial period, you will have to pay for the service continuity
- Some signal providers only offer free signals on limited pairs, and you will have to pay to have signals for more pairs
- Some services only offer a few free signals per day. If you want more signals you will have to subscribe and pay a monthly fee
You get the picture. Still, free forex trading signals are not a waste of time. On the contrary, these free services can enhance your trading skills if you choose the right provider. Even with a free signal service you will receive entry recommendations with the appropriate SL and TP levels, and real-time technical analysis.
On top of that, you will get trade ideas to help you understand market dynamics. By using this combination of tools, not only you will get a clearer understanding of the market dynamics, but also, you will become a much better trader.
And the good thing about free stuff is, you can subscribe with as many providers as you like. That way you can keep up with trends and changes in the Forex market, with regular free signals from different providers. So, in conclusion, yes, free forex signals are good and convenient for learning. Plus, you will not pay for anything. Just a word of caution here, you should always try the free signals on a demo account before applying them on your real account, as nobody knows how these providers generate their free signals, and potentially, they can be a high-risk instrument.
Forex trading signals: Trading rooms and social trading
Other great sources for forex trading signals are the trading rooms. Exactly, what are trading rooms? Trading rooms are communities created by professional, or amateur traders, where they come together, with ideas and trading strategies. The purpose of a trading room is finding trading opportunities in the market and sharing them with other members of the room. By joining a room, there’s no need to trade alone anymore.
Anyone can join a trading room, invest together with other traders, or follow their trading signals. There are many well-organized and dedicated trading rooms, with experienced traders who can guide the less skilled, by sharing their ideas, knowledge, and by giving precise trading signals and the appropriate trading psychology in real-time.
How does trading rooms work?
On a trading room, a trader finds an opportunity to enter a possible profitable position and posts the entry price, long or short, the stop loss and take profit levels. Then, the other members can read the trade and copy it, if they wish, into their trading accounts.
But the best thing about a trading room is the exchange of ideas and information. The members are also able to ask questions, or even comment directly with the other traders. The only downside is that getting forex signals from a trading room means that you will have to be in front of your computer screen to execute the trades yourself. But if you can’t be always in front of your PC, you can still get forex signals from another, growing, type of source. The social trading.
What is social trading?
Social trading, as the name suggests, functions on the same basic principle as social media: Subscribers to trading signals providers or services can follow more experienced traders and view exactly their trading activity and results. Subscribers can then use this information to create their trading strategy or portfolio of strategies to follow.
Social trading is a modern investment instrument, the result of the copy-trading update, allowing other traders to observe, follow and copy forex trading strategies from other more experienced traders to achieve the best possible investing results. Social trading is used widely by new traders and is often seen as a low-cost, but very sophisticated, alternative to the more traditional wealth and investment managers.
How does social trading works?
Similar to a social network, in the sense that it’s all about building a likely minded community, and sharing. But instead of sharing pictures of your trips, you share your trading tips and ideas. On a social trading platform, traders interact with others, following the trading results of other traders and discussing ideas on solutions to market challenges.
Ultimately, you will be provided with several trading signals that can assist you with making substantially better trading decisions, by viewing other people’s suggestions in your trading network. Some social trading networks also allow you to follow and copy onto your trading account, automatically, the positions of expert traders.
Best forex signals: Follow and copy expert traders
There are dozens of services claiming the title of best forex signals providers. In this chapter, we are not reviewing which one's are the best, because, that alone, would require writing a completely new article.
Instead, we will focus on pointing out briefly what are the 3 main sources for forex signals, currently used by thousands of traders across the globe, based on their popularity, and how these services work.
ZuluTrade was founded in 2007 by Greek entrepreneur Leon Yohai, as a peer-to-peer forex social trading network that could audit traders globally and, at the same time, enable experienced traders to share their skills with people interested in their strategies.
Their platform is designed to bring together some of the most professional and talented traders globally and investors, providing a service that can rapidly execute trades. An additional advantage of their platform is the ability to drive selected trades to your brokers’ accounts.
Connected with more than 64 different brokerage firms globally, ZuluTrade provides an open environment, where traders from all over the world can connect any trading platform and share their knowledge. The company aims at becoming the world ‘s largest social trading community, offering customer-focused investment solutions.
How do ZuluTrade forex signals work?
The best way to find out what ZuluTrade is all about is by registering a demo account, as they offer demo accounts with the same functionality as real accounts. That way you can familiarize yourself with all the basics and options of the platform.
Then, if you decide to go live with them, the first thing to do is to check the list of available traders and their overall performance. Then if you want to invest your cash with the forex signals generated on ZuluTrade, you have the following two options:
Auto mode: connect your broker’s trading account to Zulutrade and set up a portfolio of the traders you wish to follow. Then specify your risk appetite and the funds you wish to invest. There’s an option that trades are placed and closed on your broker’s trading account in auto mode.
Manual execution: The second option is to receive the forex signals and you can place the trades manually on your trading account. You still follow your portfolio of traders, but instead of having the trades open and closed in auto mode, you will have to execute them yourself, manually.
Myfxbook is an online automated analytical tool for your forex trading account but also a social trading community, enabling traders to track, compare, analyze and share their trading activities. With plenty of money managers looking for new clients, interested parties can check their profile on the public system page as a resumé for their trading skills.
How do Myfxbook forex signals work?
Well, similar to ZuluTrade, Myfxbook is also a social trading platform, where more experienced traders can showcase their trading skills and strategies for other traders to follow.
Myfxbook was created as a tool to help traders keeping a track record of their trading activity, publicly viewable, by linking their real or demo trading accounts to the Myfxbook (with reading privileges only). This feature enables a quick view of any trader’s, or trading system, performance charts, making it possible to see exactly what works or not.
Regarding forex signals, Myfxbook can be used in two ways. First one, find a long-term strategy from a trader, suitable to your trading style. Then check its performance data and if you decide that this one is the one for you, you can subscribe/follow this trader, by clicking the “add to watch” button. You are now following this trader, so you will get updated when new positions are open.
The second way to get the best forex signals through Myfxbook is by visiting the Reviews page > Signal providers. You will find several forex signal providers on this page, and, most importantly, how traders rate their services and signals. Choose accordingly.
MQL5 features unique services for traders using MetaTrader4 and MetaTrader5 trading platforms. You can find full-featured technical analysis and trading applications, from technical indicators to EAs, and much more.
MQL5 features a social trading platform allowing any trader with the ability to copy the trading signals, from different providers, directly into their trading account. Monitored real accounts (demo accounts are not permitted to be used as signals providers) are shown with detailed statistics and trading history.
How do MQL5 forex signals work?
To start, MQL5 forex trading signals are only available for a subscription fee. You will need to choose a signal provider and pay a fee, ranging from 30 USD to 50 USD. To subscribe to a signals service, simply click the tab “Signals” and view the available signal providers.
You can sort them out by reliability, profit, reviews, and more. When you find one that fits your trading style, subscribe to it in a few clicks. You will then start receiving direct messages when the signal providers open new trading positions, that you can copy straight to your trading account.
Forex signals providers on Telegram, Facebook, and other social Apps
This is an interesting topic. If you have an MT4 or MT5 trading platform, or even a broker’s native App installed on your smartphone or tablet, you have the possibility of trading on the go. But how do you keep up with the market? Especially if you can’t be in front of a desktop monitor all day long.
As social platforms like Telegram, WhatsApp and Facebook grow in the number of users, and also because they allow instant messaging to a group of persons in real-time, several traders use them as a way of communicating their trading positions to friends and followers.
Others, like signal providers, have decided to offer their services to subscribers through these social platforms. Let’s have a look at what’s on offer on the mainstream social platforms; Telegram channels and Facebook.
Forex signals providers on Telegram
A pretty simple way of getting forex signals. If you are subscribed to a signal provider on a Telegram channel, as soon as the provider sees a trade opportunity, and executes it, the trade will be posted on the Telegram channel with the type of trade (buy or sell) with the entry price, SL and TP levels for you to follow.
To find a forex signals provider on Telegram use the search function on Telegram and type “forex signals”. Now, there are quite a few providers on Telegram that use this App just to promote their website and to get paid subscribers, but if you search well, you will find many that are completely free and posting 2 to 3 trades per day.
Forex signals providers on Facebook
Similar to what’s on offer with Telegram channels, if you are a Facebook fan, you will be able to find several forex signals providers posting their trades more or less in real-time. You can then follow the signal if it suits your trading style.
Forex signals posted on Facebook follow the same simplicity as other signal providers, with the traded currency pair and the indication of buying or selling, stop-loss, and take-profit levels. To find a suitable signal provider on Facebook all you have to do is use the search bar on the top left corner and type “forex signals”.
You will be presented with the available results and you can then browse what’s on offer. A lot of providers listed on Facebook are just promoting their services and redirect users to a website asking for a subscription, but if you search thoroughly, you will find many others posting free forex signals, even daily.
Forex signals providers on other social Apps
Not only it is possible to find several signal providers on the above mentioned mainstream social networks, but also on Twitter, Instagram, Snapchat, and WhatsApp groups. Overall, we can find two types of forex signals providers using different social network platforms to engage with their audience.
The professional signals providers using the social media to promote their business of selling signals, and to get more paid subscribers, and the altruistic trader just looking to give a hand to a fellow trader, by posting his trades for others to follow.
The offer is immense, so is the range and quality of the services, even paid ones. We strongly advise if you decide to follow any free signals posted on the social media networks, to evaluate them properly, for their quality and accuracy. Social media networks can be a reliable source of quality forex signals, but you shouldn’t be too excited about someone advertising the holy grail or posting profile pictures with a Bentley or a Lamborghini in the background.
Forex signals Apps: Trade on the go
We couldn’t finish our article without mentioning forex signals Apps. These type of Apps are the perfect companion even if you whilst at the bar, relaxing on the sofa, or in front of the TV screen. If you already use the MT4 or MT5 mobile trading platforms, or your broker’s native App, then downloading and installing a forex signals App can help you enhance your trading.
These Apps are coded to send push notifications in real-time, meaning that the company (or even private individuals, sometimes) running the App, will send an alert to all the users, with the signal generated by their trading strategy and the entry recommendation, with, of course, the appropriate SL and TP levels. Again, a simple and free way of getting forex signals.
Some Apps are 100% free, others have premium payable features, and some others are available to install only by payment. These signals are generated and sent in real-time, so, if you want to test the accuracy and reliability of a couple of them, head over to Google Play Store or iOS App Store, type “forex signals” in the search bar and browse through the presented results, read what other users say about them, and if you decide, install it on your mobile device.
Social trading and technology opened trading and investing up to everyone. Social trading platforms allow traders to copy more experienced investors who share their trading strategies and information.
Retail traders, new and experienced, can see how and what other forex traders do across the network, and if you decide, you can take the same trades from their broker platform or App.
But more than just simple forex signals providers, social trading platforms are also a great way for you to learn how to successfully trade the forex market, as these platforms offer forums and a community of more experienced traders always available to explain, teach and exchange ideas.
Yes, you can benefit from social trading platforms like Zulutrade, Myfxbook, and MQL5 because they are all keen to host profitable traders, which in turn will help them with their revenue. Then, if you are on a budget, or if you decide to “try before you buy”, the best option really, is to subscribe to a free forex signal provider on Telegram or Twitter and try it out.
To properly assess the validity and accuracy of forex signals posted on social networks Apps, try to find the earliest signals posted by the provider and confront them with the charts on your trading platform, for entry, SL and TP levels.
Then if prices match with your charts, follow the provider for a couple of weeks or so, studying the signals posted to find out if they are presented in real-time, and above all, to see if you can implement them successfully on a demo account. That’s right. Always trade the forex signals on your demo account, before copying them to your real account.
TIP: If you’re already running MT4 or MT5 on your mobile, open a new MetaQuotes demo trading account. How? Just select “Manage accounts”, then press the “plus” sign on the top right, and choose “Open a demo account”, then select “MetaQuotes-Demo”.
If you subscribe to a signals service with push notifications, via Telegram, Twitter, etc., as soon as you receive them on your mobile device, you can copy them to your demo account and see how the trade progress, absolutely risk-free. Remember, do try and test everything before committing with real trades on your real trading account.