How Does Forex Signals Affect The Outcome Of A Trade?

Forex trading signals are trading recommendations offered by third-party signals service providers, market analysts, and Forex trading companies, and have been an integral part of the Forex markets ever since it was deregulated for public speculation. Forex signals are designed to offer in-depth information about the potential future movement of a currency pair a group of currency pairs, which allows traders to open and close their orders for the best possible results. There are different types of FX signals in the market that suits individual trader requirements, but a trader should only choose a signals service if it suits their risk appetite and trading personality.
Forex signals help a trader, regardless of their experience or market exposure, to carefully analyze the dynamics of a market and tweak their trading style to conform to the existing market conditions. The currency markets are highly volatile, with almost all the main news events from across the globe having a significant impact on the direction of all currency pairs in the FX basket. Although there are several technical indicators and fundamental factors that can help a trader to make an accurate analysis of the underlying trend in a currency pair, it does help to confirm and reassure your findings through professional trading signals that are known to offer reliable and high-quality signals on a consistent basis.
Leveraged products are always risky, especially due to the incredibly high amount of leverage and the volatility experienced by currencies during major news events. If a trader is not careful, there is a good chance that he will lose his entire account equity in one big swing. It is also common among traders to face a string of consecutive losses, but it is the ability of a trader to weather out their losses that determine their success in the market. Losses are an inevitable part of the FX markets, but profitability depends on how well a trader can let his profits run without succumbing to his emotions. Trading signals can offer a sense of stability to a trader to be firm on his position, regardless of the market fluctuations that might force him into closing a potentially profitable trade.
Trading signals also offer the opportunity for traders to get out of losing positions at the best possible exit point, without losing too much of their trading capital. The primary concern among amateur traders is the fact that they are unable to determine the exact entry and exit points, even if they manage to read the market direction accurately. Therefore, by subscribing to trading signals, traders can utilize a set of reference points, where they can actively manage their trades for increasing their profits and minimizing their losses.

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Is It Possible To Find The Best Forex Signals In The Market For Consistent Performance?

If a trading signals service provider promises you a 100% profit record, you are most likely dealing with a scam. There isn’t a single industry in the world that offers a 100% guarantee for consistent profits without any risks, more so in Forex, where the market witnesses a staggering 90% in attrition rate. Only close to 5% of retail Forex traders actually enjoy profitable trading, with more than 90% of traders quitting their FX ventures within a few years of starting in the industry. Trading psychology is a huge factor in determining the success of a trader, and the market dynamics always stipulate that there is an equal probability of profits and losses. Even institutional investors face massive drawdowns, but most leading institutions have access to advanced trading strategies, top market experts, and automated trading bots that are excellent in maintaining a positive performance year-on-year.
Smaller retail traders can indeed enjoy profitable trading through some of the best FX signals that offer reliable performance without promising extravagant gains. The top Forex signal providers are transparent in their approach by offering you all the nascent details of their trading signals, and by providing you with vital information that can help you in your trading ventures. These companies also help you to position your orders according to your trading capital, and by advising you the best leverage option that is suitable for their trading signals.
Finding a top signal service provider can be a cumbersome process, especially due to a large number of scam vendors in the market. Traders have the option of choosing between paid and free trading signals, which have their own distinct benefits and weaknesses. Paid FX trading signals are usually provided by leading market experts and analytical software that offer a subscription-based model for a fixed or variable monthly fee. Regular paid Forex signal subscriptions can cost anywhere between $5 and $1000 per month, according to the number of signals, currency pairs, signal access options, and other features. Traders might also come across more expensive signal options, but it might not make sense from an ROI perspective, especially if you are working with a small amount of trading capital.
Free signals can be a great alternative to paid signals for traders working with a minuscule amount of trading capital. Free signals may have some drawbacks such as inconsistency in results, scheduling conflicts, and sometimes free signals service may even wind up their services overnight without any warnings. However, free trading signals do prevent traders from having to spending a significant sum of money for subscribing to a trading service, the cost of which can be transferred to a live trading account. Free signals also come with additional benefits such as free access to technical analysis, news updates. Live trading, and even an opportunity to install EAs or bots for automated trading.

Being Proactive With Your Forex Trading Signals

Trading signals can be a great way of improving your trading performance and is an excellent strategy to gain an edge in the Forex market. However, one should not entirely rely on FX signals for their trading requirements, as there are obvious drawbacks to trading through external assistance. For instance, trading signals may not be reliable and are susceptible to human errors or platform manipulations. Even paid signals can send you erroneous trading calls that are bound to lead you to considerable losses.
Therefore, it is usually a good idea to reinforce your trading strategy with a mix of trading signals, technical analysis, and market research. To become a complete Forex trader, you should be willing to dedicate a significant amount of your time and resources into learning the fundamentals of the industry, which will, in turn, hold you in good stead for enjoying a profitable FX trading career.
Learning the rules of Forex trading has its own advantages. If you depend on trading signals alone for your trading account, you are essentially following someone else’s strategy on blind faith. Trading signals are tremendously beneficial during a period of consistent profits, but periods of drawdowns can have substantial negative impacts on your account equity and emotional well-being. If a trading signal provider is not as efficient in their trading strategies, you should have the sufficient knowledge to get out of losing trades and refrain from entering the markets when your trading call says one thing and the market says the other.
Forex trading is not designed for investors who are looking to get insanely wealthy through get rich quick schemes. Forex trading should be treated as a regular investment opportunity and a business that requires careful financial planning and implementation. Forex trading can only be profitable if you treat it like any other business, which is why it is important to use all of the tools available in the market to your advantage. Trading signals should only be considered as an added feature that complements your other trading strategies to help you to make the best investment decisions for your trading capital.

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Forex Brokers and Sites
Broker Rating License Leverage Spreads Live Chat Trade Now
Read Review
6/6Rating 6/6
MiFID 1:400 from 0.9 pips yes Trade with AvaTrade
Read Review
3/6Rating 3/6
CySEC 1:300 typical 2 pips no Trade with Plus500
Read Review
6/6Rating 6/6
CySEC 1:300 typical 2 pips no Trade with 24option
Read Review
6/6Rating 6/6
FCA 1:500 from 1.5 pips yes Trade with HYCM
Read Review
5/6Rating 5/6
CySec & FCA 1:200 from 2 pips no Trade with eToro

Does Spending Money On Paid Forex Signals Guarantee Profitability?

Some traders are easily swayed by the popular misconception that paying for Forex trading signals can in some ways guarantee profitability. In reality, there are countless paid signals in the market that have a significantly lower trading performance record than some of the popular free-to-use trading signals offered by brokers and third-party service providers. In fact, numerous paid Forex signals are devised with the sole intention of generating quick revenue from unsuspecting users, especially from investors that are desperate for finding a profitable edge in the market. These dubious trading strategies may have consistently negative results, which will do more harm than good in the long run.
Paying for a service does not guarantee results. Trading signal providers often have disclaimers that are designed to protect them from lawsuits or other legal hassles. Traders are required to sign disclaimer forms and other legal papers before they are granted access to a signals service, which is done to enjoy complete indemnity from consumer complaints. Several clauses specifically mention that all trading signals should only be used on demo accounts and any real-life losses are not to be held accountable with the signals service provider. Therefore, even if you are paying for a signals service, you are essentially paying for information that cannot be used on a live trading account.
There are other factors that determine the profitability of a paid Forex signal service. Paid signals vary according to the cost of subscription and the mode of signal delivery. The cost of a trading signal is a significant factor in the profitability of a trader, particularly when considering the cost implications of choosing a $500 subscription package for a $500 trading account. In such a scenario, the trader will be unable to recover the cost of signal subscription through his trading alone, which might force him to risk more money in the markets by using higher leverage and face a margin call. Therefore, the signal subscription cost should be a small percentage of your trading capital, minus all the fees of trading and your expected profits. For a trading signal services that offer 10% return per month for a $1000 account, you should realistically aim to pay around $10-$50 as subscription fees.
The type of signal delivery or the mode of receiving your trading calls can have a huge effect on timing your trades according to market conditions. A signal service provider might be able to offer you all the right calls, but if they are unable to send them to you in a timely manner, you will not be able to use this information to your advantage. Even a delay of 1 second can make all the difference in trading, especially during news hours where currency pairs can fluctuate up to 250 to 500 pips on pairs such as EUR/USD and USD/JPY within the matter of a few seconds. Therefore, signal services providers should offer you a wide range of signal delivery options such as email, SMS, VOIP chat, or through dedicated online signals interfaces. For better reliability, avoid signal services that concentrate on news trading, as such signals can result in massive losses during highly volatile trading sessions.

How To Combine Forex Trading Signals With Social Trading Strategies

Some Forex signal companies provide EAs and programs for traders that prefer automated trading. These programs are designed to open, manage, and close trades using all signal parameters, and without any manual intervention. Other signals service providers may also offer their services as managed accounts that typically require a trader to invest money into a PAMM or MAMM account. Social traders can enjoy remarkable profits by combining the concept of trading signals with other social trading strategies that are guaranteed to remove the manual aspect of trading, which help in eliminating the emotional facet from trading. Here are a few tips to help you to enjoy the best results while using FX trading signals along with social trading strategies:

  • Use your trading signals to understand the range of the currency pairs, and use other tools to verify the signal for its accuracy. Social trading platforms allow traders to understand the direction of an asset and other open trades in the market, which should give you a fair idea about the general market consensus and trader sentiment.
  • Always utilize stop loss levels for your open orders and monitor your trades continuously, even if you are employing a professional and profitable trader for your managing your account. You are the only person responsible for the safety of your trading funds.
  • Never pay for a service without using it on a demo account, immaterial of the amount of reputation or customer testimonials. Choose a signal subscription service only if you are thoroughly satisfied with its performance and reliability.
  • It would be better to have a fair amount of market knowledge, which will help you to understand why a program behaves in a certain manner during different market conditions. Expert traders often use signals and automated trading strategies in conjunction with their own market analysis, so as to eliminate a fair amount of risk while investing in the market.
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Online Resources That Provide The Best Forex Signals For Free

We have reviewed some of the best Forex brokers that offer excellent trading signals for no additional costs. Traders will have to open a live account, verify their identity, and make a minimum deposit in order to receive these free trading signals. On the other hand, there are independent service providers and affiliate websites that also provide free Forex signals without any extra costs. You can also receive trade recommendations from FX news portals and other similar online resources that offer far more reliable signals according to the prevailing market conditions. If you would like to get more features and personalized recommendations, you may consider paying for a signals service subscription. Paid services are free from advertisements and other drawbacks associated with free services, which may make sense from a usage perspective.