One of the disadvantages of FOREX trading is the time investment needed to monitor the
markets for advantageous entry and exit points. It's possible to sit in front of a computer
monitor for hours watching the markets.
Of course, you can use automated orders such as limits and stops. These allow you to
walk away from your computer with the knowledge that your losses will be kept to a
minimum, but by doing so, you may miss out on potential profits because your limit order
kicks in too soon.
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. Most
companies use a combination of indicators to identify main trends and entry and exit
points. The results are sent to subscribers who have the option of acting on them or
passing. Some services will even execute the trade for you.
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
markets for advantageous entry and exit points. It's possible to sit in front of a computer
monitor for hours watching the markets.
Of course, you can use automated orders such as limits and stops. These allow you to
walk away from your computer with the knowledge that your losses will be kept to a
minimum, but by doing so, you may miss out on potential profits because your limit order
kicks in too soon.
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. Most
companies use a combination of indicators to identify main trends and entry and exit
points. The results are sent to subscribers who have the option of acting on them or
passing. Some services will even execute the trade for you.
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
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