What is a forex signal?

 A forex signal is a trading recommendation. It gives the user specific details on a currency trade, which could include price, time and possibly stop loss levels. The signal could be computer generated, for example, from a software programme or a robot, or it could be generated by a human. The signal is sent to the user, usually via email, twitter, SMS or RSS.


These signal systems are used by traders all over the world, to help them with trading decisions. It is important to understand how these signals could assist you and their importance in trading. Let’s take a look at the two different types of foreign exchange signals:


Manual forex signals – A trader studies the market looking for buying and selling opportunities before taking a decision to buy or sell a particular currency. This is potentially very time consuming and can be very objective. However, as a positive, a human trader can pull out of trades if he considers that the market is showing signs of unpredictability or is behaving in an erratic fashion.


Automated forex signals – These are trading programmes which interpret market movements and say whether to buy or sell a particular currency accordingly. These programmes or robots as they are also called, can be quite reasonable accurate, if they have been created by a knowledgeable professional. The clear advantage of the automated forex signal provider, is that it can analyse a huge amount of data in comparison to a human trader. This means that you could receive signals for multiple currency pairs and across a 24-hour period, throughout the trading week. You are unlikely to miss an opportunity.


The most sensible strategy is to use a combination of both. Even if you use forex signal, it is important that you understand the basics of trading fx. This way you an understand what you are trading and the signal you are receiving. The majority of signal providers will allow you to have a trial period. In this period test the information you receive to check that it is of a high quality.


Whilst signals are never going to give you 100% profits, if you chose one carefully and use it wisely, then you have more chances of building a winning trading account.


Where can I trade signals?

Vantage FX is an award-winning ECN Forex Broker, based in Australia. They provide several high spec trading platforms including MetaTrader4 and a mobile app among others. Vantage FX offer transparency, true ECN spreads and unparalleled execution speed. To apply for an account visit the Vantage FX website: www.vantagefx.com.

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