Many novice traders dream about successful trading on currency exchanges, mistakenly believing that this can be achieved without any knowledge, but only based on their intuition. In fact, to get as much profit as possible, a trader will need to master a lot of different techniques and principles of applying special strategies and tactics in certain situations.
You also need to understand how all financial instruments work in order to start using them to achieve your goals. It should be noted that successful trading on the Forex market should be studied gradually, analyzing each strategy and position. Theoretical knowledge must be implemented in practice, regardless of the risks, because only in this way you can become an experienced and successful trader.
Here, to help newcomers, there are many tools to assist them to navigate more quickly in trading on the exchange. For example, there are live signals that can be used to achieve the efficiency of trading.
What Are Live Forex Trading Signals?
In the Forex market, the use of live signals is an integral part of trading. They represent nothing but hints or recommendations for the actions created by experienced traders to carry out trades. Trading signals are formed on the basis of an in-depth analysis of many factors and strategic developments. These messages are especially relevant for beginners, as they give them an opportunity to use the forecasts of specialists.
Forex offers two types of trading, which are long-term and short-term. In case of participation in the first one, signals are used mostly by beginner traders, as there may be various specific things to take into account.
All trading signals can be divided into two categories:
- Signals for manual market entry
They can be sent by e-mail, Skype, SMS, or other similar means by the provider for manual market entry. The main disadvantage of this type of signal is that a long time may pass between their arrival and the opening of an order, and the price will have time to move far away from the "signal" entry point. It is especially inconvenient when trading with the market, not with pending orders. On the other hand, "manual" signals are good because you can skip them when you do not agree with the provider's forecast.
Signals for automatically opening positions
Automated signals are the most popular and convenient. Subscriber once adjusts some parameters, such as the volume of orders, and then everything happens in a fully automatic mode: signals provider opens an order and the same order is opened in subscriber's account. The disadvantage of this type of signals is the need to have a high-quality (without connection interruptions) Internet and a constant, without power outages. Otherwise, the signals will be skipped, which will undoubtedly affect the trading results. This disadvantage is eliminated by using a VPS-server.
- AS for the fees, signals can be either paid or free.
Paid trading signals are considered to be more accurate, but errors are also found.
But most often novices prefer trading with signals that are free of charge since it`s available and doesn`t require too much attention.
The collection of analytical information is carried out with the help of tools, which display the whole process of trading at the exchange for a specified period of time. Traders can receive some kind of guides to action by means of SMS-notifications, to an e-mail address or on the site itself with the help of the application. And for reliability, you can use all three options of notification. Today, free trading signals, which have been published every day for several years, are quite popular among traders.
Why Use Live Forex Signals?
The biggest difficulty arising in the trading is to correctly predict the development of the situation on the market, to determine the future quotation of the asset. The time has already passed when a trader analyzed only the appearance of price charts and applied ancient methods of studying curve forms - channels, flags, and triangles. The next method was to observe the pivot points. Today, trading with signals is extremely easy, since they are constantly broadcasted online on many sites. Now trading signals are generated by over 2 dozen of technical indicators.
The main task that the trading signals should perform is to give a signal to the trader about the preferred actions in the near future using statistical data taken from the past. They tell him the moment when it is necessary to sell or buy, and sometimes just wait for a favorable moment. Trading signals provided by technical indicators, using only mathematical methods of statistical analysis, describe the current situation, and try to suggest a possible future. We draw your attention to this "POSSIBLE" because the market is unpredictable and its expanses are also subject to the laws of combinatorial analysis.
A lot of traders still do not succeed to get profits even trading with signals provided by the best professionals. Time goes by, the subscription is being paid, but something is not going the way it should. Of course, it happens to the best of us. To help you to avoid that and to fully take advantage of Forex trade signals. Here are 5 things for you to consider:
- Know Your Risk Threshold
Most market participants are sure that the only way to become a prosperous trader is to work by "do or die" rule, which is totally wrong. Everyone has a different risk appetite and some traders have made fortune with 'slowly but surely approach, being quite conservative in trading.
At the same time, all the Forex trade signals are different, consequently, you should select the ones that will be a perfect match with your risk appetite. Pay attention that there is no way you will be able to make the most out of live signals if you do not agree with that approach or they just don`t appeal to your personal style. Of course, looking for that "the one" is pretty exhausting and time-consuming, but it`s worth it.
- Trade in Your Market
If we speak about the beginner traders, that is the number one mistake made by novices. As for veteran traders, they have already gone through this and do not repeat the same slips.
That`s why it is a must to work only with the market you know. In case you are familiar and comfortable with the driving force of the market and know how it behaves, your trading will be much more successful.
Experienced traders are devoted to what they are good at. Therefore, once we apply the signals to the market we understand, we’ll make the most out of live signals and boost our trading results.
- Test Signals First
Some signal providers give trial periods or allow clients to test drive the signals on demo accounts. Make sure to so so prior to paying for the service. Testing the service on a demo account helps you to get the whole idea of this very provider and to understand if it meets your expectations and needs.
The test drive is really important since you need to check if the service if understandable enough or to compare it to the current one you are using (if any) and choose the one that suits you more. With the help of demo trading, you can check if the provider is as good as advertised. Moreover, you will have a chance to verify the accuracy of the trade signals and decide how it can benefit (or jeopardize) your portfolio.
- Make Use of the Charts and Live Trading Rooms
Probably right now you think that we are nuts and that applying charts is not something you want to do. Nevertheless, making the most of the charts provided by the service will be of great help.
Veteran traders make use of the charts very often for a reason. For those who are totally new to Forex trading should take it seriously and as a point of departure. With the help of charts, you have an opportunity to get more information regarding the trading results as per these very signals.
One more essential means disregarded and almost not used bt traders is trading rooms. Most of them comment on the positions explaining the current market situation. If you want to understand the market better as well as enhance your trading skills, this is the best solution for you.
- Use the Automated Trading Systems
Most likely you, being a novice trader, have never come across this system prior to reading this article.
So, now you know that some providers implement automated systems allowing you to increase your account balance doing nothing.
The point here is that the orders presented by the signal provider are placed automatically on your trading account without you taking part. We draw your attention to the following - such a system is not created for each and every trader, do not forget about the risk tolerance we have mentioned above.
But, in case you are satisfied with the trading approach, go ahead and get this automated trading system from the signal provider.
Conclusion. Can Using Live Trading Signals Benefit You?
Wrapping up all the aspects we have gone through in this article, the answer is obvious - yes. Trading with signals will benefit your Forex trading account like nothing else. To do it in a proper way keep in mind the key points we have just discussed.
To take advantage of Forex trade signals correctly is a pledge of successful trading on the market, so the choice of a source of information should be considered prudently.
Despite all the advantages of trading signals, bear in mind that it is not a panacea. To use this information, one should understand the principles of its formation. It would be extremely wrong to apply Forex signals to trading blindly, without background information. You can succeed in trading only after you have received the necessary skills and knowledge.
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