When you decide to involve yourself in the Foreign Exchange market you need to have a deep understanding of Forex trade signals. These signals are much needed because they can aid you to increase your profit margin when trading Forex. Moreover, notwithstanding your level in the Forex trading market, you definitely need Forex trading signals because as you know trading Forex is a very tedious process. If you’re a beginner, Forex trading signals help you to trade Forex like a Pro; thereby reducing your chances of failing. For the professionals, you need them to enhance your skills to a whole new level and strategies that yield higher margin to your Forex trading arsenal.
What is a Forex Trading Signal?
A Forex trading signal is a tool that suggests to you, the Forex trader, when to enter to sell or buy a currency pair, especially at a particular point in time at a particular price. The Forex signal can be generated either by an analyst who is a human being or an automated Forex bot given to a Forex subscriber by the Forex signal provider. Because these signals occur in real time, they are normally communicated to the trader via SMS, RSS, twitter handles or other fast methods. The Forex trading signals supplied by most Forex trading signal providers are centred on more of technical analysis and a few of them are on fundamental analysis. The fundamental analysis examples could be seen in Brexit polls result which indicated a strong trading signal to sell pounds, the raising of Fed rates which indicates a strong trading signal that the dollar will rise and the rise in the price of oil which indicates a strong trading signal that Canadian dollar will rise above its competitors.
Types of Foreign Exchange signals
There are two types of Forex trading signals that exist in the Forex market. They are;
- Manual Forex trading signals
- Automated Forex trading signal (Forex bots)
However, mind you a signal’s particular function and how it functions generally is a major determinant of its type.
For manual Forex trading signal, you have to sit down in front of your computer for a long period of time seeking signals that will aid you to make a final decision on whether to buy or sell a certain currency. Manual Forex trading signal is a time-consuming process. You are the one who sets the parameters to look out for. These parameters could be in the form of a specific value of foreign currency, trends, ups and downs in the market. This type Forex trading signal is not recommended for beginners because to use it you must have quite a lot of time with a professional advisor who gives you advice or performed a thorough research on Forex so as to understand what you are doing.
Automated Forex trading signals involve you giving out the only the command to the software so as to search for signals to look out for. This can be done using a Forex bot, software that produces Forex trading signals and places real-time orders to trade in your brokerage account automatically. You are the one to decide the parameters for the bot to trade or exchange your foreign currency. Your bot does not run by itself, it only trades on the parameters given to it.
Finally, trading in the financial market is a mystery because there is no single known formula for you be to be successful. However, by mixing good analysis with power implementation, your success rate will increase.