ForexTrading Signals

January 10, 2008 – 5:48 am

Aside from analysis, forex traders need discipline, especially in the face of a market renowned for its volatility. Having done the necessary research, and gained the necessary experience, forex traders should be ready to apply their discipline, analysis, and experience for the benefit of their clients.

Trading signals are time-tested indicators of trends in the forex market. Breakouts, support levels and resistance levels, envelope patterns, currency pairs near moving averages, stochastic lines, oscillators, Fibonacci levels - application of these indicators enable forex traders to make a profitable entry into the market. There are about 26 such indicators - reason enough for investors to rely on seasoned forex brokers.

In other words, Forex Trading Signals are selling and buying recommendations given by any third party. Such parties could be brokers, brokerage firms, analysts, traders, etc. Different parties offer different signals, tips, and trends for trading in forex markets. It is best to collect daily Forex signals from reliable sources. A combination of fundamental and technical analysis forms the foundation of accurate Forex signals.

Signals have no relation to emotion-be it Forex daytrading or daytrading. Signals follow certain patterns according to market trends and forces of demand and supply of currencies.

Of course, this need not be a generalized opinion, as there are genuine signal providers in Forex markets. They arrive at signals after detailed study of markets and technical analysis of operating forces.

If you don’t have the time to watch your computer monitor and still wish to achieve as much profit as possible, consider signing up for a FOREX signal service. These services monitor and analyze the market for you and send their findings directly to your computer desktop, email, or SMS on your cell phone or pager. Companies that offer FOREX signals do so on a paid basis, so you have to sign up and pay a monthly or yearly fee. Some brokers may offer this service as an extra which integrates into their trading software. You can receive signals as a popup on your screen or by any of the other methods described above.

There are usually a limited number of currency pairs that are available for FOREX signals. Most services offer signals on EUR/USD, USD/JPY, GBP/USD, USD/CHF, but specialized services may offer other currency pairs.

FOREX signals are primarily based on technical analysis of market conditions.

Using a variety of technical studies, various types of signals can be derived from currency charts. The SMA (Simple Moving Average) indicates buy signals when currency prices rise above the average line. Sell signals occur when the price falls below the moving average line.

MACD (Moving Average Convergence Divergence) studies have a signal line that is used to generate a buy signal (above the line) or a sell signal (below the line).

Volume indicators are used to determine market interest. High volume (especially near the bottom of the market) can indicate the start of a new trend while low volume indicates investor uncertainty.

Bollinger Bands indicate potential changes in the market. Sharp price changes tend to occur when the bands tighten while prices that touch one band tend to go all the way to the other band.

Other indicators like volatility and momentum can be used to reinforce signals provided by other sources. Taken together they form a relatively reliable source of information about how the market is behaving.

Are signals a sure thing? Of course not, otherwise we would all be millionaires. Signals can give you good advice about which currencies to trade, but no signal service will guarantee their information is 100% accurate. Reputable services will show you their track record, however, and let you see for yourself how they have done in the past.

FOREX signals cost anywhere from $50 to $200 a month. It’s up to the individual trader to decide if the cost is worth it. Don’t think that signals can take the place of trader education: they are advice, and if you don’t have the knowledge to analyze the advice, you should go back to the books before using a signal service.

Trading signals’ interpretation

If you have received the message:
“Expectation sell eurusd”
It is not a signal! This is the prevention of a possible signal.

If have received:
“Sell eurusd time 17.00 If closing 1.1 S/L1.2 T/P 1.0″
It means, that if at 17.00, closing will be less than 1.1 bid, then it is necessary to open a position with the specified orders.

If closing does not happen, a position is not opened below the specified size! If the conditions of signal’s approach don’t realize, its action is prolonged for the next specified hours until it will not be executed or changes will not act.

If have received such message:
“Sell eurusd S/L1.2 T/P 1.0″ It means, that opening should be carried out without additional conditions, right after receptions.

If the following messages:
“Expectation eurusd time 17.00 S/L ” - change of order S/L is possible after 17.00;
“eurusd S/L 1.2″-change the order, to the specified size;
“Expectation eurusd time 17.00 closing or S/L1.15 ” - closing or change S/L 1.15 is possible;
“Expectation eurusd date 22.02 closing or S/L ” - closing or change S/L on February, 22nd is possible;
“eurusd closed “-close a position.
“eurusd no signal ” - a cancelling of a signal on euro