Understanding Forex Trade Signals

When you choose to venture into the Forex market, it is important that you know and understands each and every tool that is used to it. These tools should push your trading strategy, help generate more profit and effectively improve your outputs. If you are looking for some ways to level-up your Forex trade efforts, try to understand the importance of Forex trading signal. These signals are defined as electronically transferred bits of information that can either be received through text, email, and different social media platforms. This information is vital in your trading venture because it correlates with how the market runs. In short, trading signals is your key to the right trading decision.

Signal Formats

Forex signals come from several forex signal trading services. These signals allow you to choose either you’ll implement it manually or automatically. It was in the 2000s when automated signals became a great hit, especially among new traders. One of the reasons why forex traders like automated signals are due to the fact that it pushes unemotional trading and an increased execution of the trading speed. Its only downside is that you are relying on a service, or rather, a system when it comes to decision making.

Manual signal trading, on the other hand, is much more preferred by experienced forex traders. Their reason is that they can decide everything as they believe that human intelligence still plays a huge role in the decision making. Though manual signal trading is a bit time consuming, the outcome will be worth your sacrifices.

There are different forms of signal service, including:

  • Free Signals – these signals are usually from a voluntary service.
  • Paid Signals – these signals are from providers that deliver it through algorithmic or personal analysis.
  • Free or paid signals that are from cumulative sources.
  • Signals that are from the trader’s computer, commonly named as Expert Advisor (EA) or forex robot.

Common Types of Signals

There are a lot of signal types and it is just important to comprehend every one of them. Here are the top 4 common signals used these days.

  • “Action” – This signal is like a call-to-action or straightforward signal that often relays the statement of either to “Buy” or “Sell”.
  • “Stop-Loss” – this signal is representing an exit point, mainly designed to protect your investment. This signal will pull out the trade before you even experience losses.
  • “Take Profit” – it is the contrast of “Stop-loss” signal. With Take profit signal, you profit level has reached the profit level.
  • “Current Market Price” – it is different from the previous signal mentioned above. This signal is more focused on helping you compare the currency price of a certain currency pair. This type of signal does not provide a direct call-to-action


Before using Forex signals, make sure you understand it accordingly. If you are planning to hire a Forex signal service, you are free to do so as long you understand their actual work, the risk tolerance, and the market conditions, then you are ready to grab your first experience in using it for your benefits.

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