As we’ve already mentioned, there are manual and automated signal providers. Manual providers are usually more experienced traders, market analysts and strategists. Manual providers provide trading opportunities that are derived from their trading experience, fundamental and technical analysis expertise as well as their trading strategies.
On the other side, automated signal providers refer to computer software that is developed to create trading instructions when specific set parameters or conditions appear in the market. Expert Advisors (EA) is an example of automated signal providers as it utilizes technical analysis techniques that are based on forecast indicators, such as Moving Averages, Fibonacci Levels, and Stochastics.
Alternatively, there are also other automated signal providers that use fundamental analysis methods, including monitoring economic news releases and market sentiment. You may prefer automated signal providers to manual signal providers, or the other way around, depending on what you are looking for.
You can also find platforms that collaborate with third-party signal providers for free on a daily and weekly basis through market review and analysis.
One of the largest auto-trading communities in the world that’s worth mentioning is MQL5. Anyone can become a signal provider in this community, however, there are a number of conditions to fulfill to make sure you can subscribe to a signal provider that will suit your requirements. MQL5 assesses the confirmed trading results of all providers and rates them.
Additionally, you are able to use different filtering options that will let you choose your preferred signal providers based on their percentage development, drawdown and manual or algorithmic trading.
Also, this community will warn you about any provider that still hasn’t delivered enough Forex signals or about new signal providers whose successful results could have happened by chance. Once you’re subscribed to an MQL5 signal provider, you will be able to copy trades of the trader you’ve selected.
How To Use Forex Signals
First things first, make sure you choose a good broker. Reliable brokers use trustworthy platforms that are very important for providing signals in a reliable manner.
Next, choose a proper provider. This is actually a more difficult task than it seems, even though there is a high number of choices for traders who want to use Forex signal providers. This is one of the most important steps because executing trades based on unreliable signals can result in massive losses. You’re putting a lot of faith in the provider, so make sure you choose wisely.
That’s why you should conduct a detailed research about available signal providers and choose a provider with a high reputation and reliability.
Before you settle and choose a provider, learn about their trading performances and strategies. There are signal providers that offer a free trial period which you can subscribe to at a later stage in case you’re pleased with the results.
When it comes to automated strategies, you can usually conduct backtesting to see how the computer would have done in various market circumstances. Also, testing signal providers on a demo account before risking real capital would be a wise thing to do.
It’s also important to know that there are trading platforms that offer high customization features which can really make the difference since not all signal providers will enrich your trading experience. A customizable platform will make sure you can adjust a reliable signal to your investment objectives and aspirations.
Don’t forget trading with currency pairs can be short-term or long term. Short-term signals are used in day and intraday trading, while long-term signals are used for several days. Keep in mind that these signals are time-dependent so make sure you make use of a signal as soon as you get it.
Trading signals are generated either by a human analyst or trader or an automated platform supplied to a subscriber of the Forex signal service.
Forex signals offer advantages as they allow traders to make a profit while still gaining knowledge about the world of trading with currencies.
Copy trading allows for investing in other investors who conduct the trades for you, instead of trading currencies yourself.
There are signal providers that offer a free trial period which you can subscribe to later if you’re pleased with the results.
Always conduct backtesting to check how the computer would have done in various market circumstances.