Forex signals can help you make more money in the forex markets. If you can hook up with a trusted source of accurate signals that tell you when to buy or sell certain currency pairs, profiting from currency trading may become so easy it's positively boring.
However, you must be careful to avoid forex signals that are incorrect or unreliable--especially when you are paying for these precious buy or sell calls. Most forex signals do cost money. Would you give your secrets away for free, if your secrets were very valuable?
The trick is to only pay for the forex signals that actually make you money, as opposed to the currency trading signals that are questionable and/or complete hogwash.
Accurate Forex Signals Are at Least Partially Understandable By Humans
Beginners to the forex invest markets may find themselves overwhelmed by all the esoteric terminology, flashing numbers, and fast-paced global currency trading action. That is natural and in fact this confusion is the primary reason why forex signals are so widely desired.
As human beings, we seek guidance when we are in a foreign land. And certainly the forex markets can seem like a foreign land to the currency trading beginner.
Nevertheless, you must be wary of putting too much trust in any "unknowable" person or formula. Never expect anyone else to be responsible for your trading decisions.
Accurate forex signals are at least partially understandable by humans, and you should absolutely seek to find out how the forex signals you're following and/or purchasing are derived.
The majority of forex signals are based upon evaluating buying and selling demand for particular currency pairs. For example, the popular "buying sentiment" indicator at FXCM.com purports to measure buying and selling demand based upon the action on FXCM's broker board.
Other forex trading signal systems are triggered by the recognition of certain chart patterns. Variations on the "doji" symbol from Japanese candlestick charting are of this breed of signal.
Whatever the system is, it's wise to understand the basics before buying in wholeheartedly.
No, you will not be granted complete access to the "magic formula" that an experienced forex web trader will use to generate their buy and sell calls, but neither should you be held in the dark about how FX trading signals are produced.
An ignorant consumer, in this case, is a consumer waiting to be scammed.
Profitable Forex Trading Signals Not as Plentiful as You Might Imagine
There are a great abundance of forex trading signals out there, but very few currency trading signal systems are profitable over the long term. The forex markets--and the traders who work them--are simply too dynamic and aggressive to permit any signal to be right all the time.
But perhaps you have heard of the "No Loss Forex Robot" or something similar?
That brings us to our second point: it's important to distinguish between not losing and winning.
That is to say, many forex trading signal systems rely upon grabbing the low-hanging fruit and only the low-hanging fruit. Don't expect a lot of trades to be happening anytime soon if you buy a forex signals system that never or rarely loses a trade.
For the active forex trader, the individual who truly enjoys making trades, this never lose brand of currency trading signal programs may be more boring than watching paint dry. This does not mean that these conservative programs are wrong, only that they're wrong for some people.
Because profitable forex signals are so rare, position-sizing is usually a key element of profitably trading from signals. If you put a lot of money up on a sure thing, you can be a big winner.
If, on the other hand, you put only a little money up on a sure thing, and then you don't see another sure thing for six months, your account won't be making history anytime soon.
Trading From Signals vs. Looking at Signals
One issue that cannot be avoided, when the subject is forex trading signals, is whether you should be trading from signals or looking at signals. In other words, whether you should let the signal trade for you automatically, or merely "take advice" from a forex signal provider.
There are costs and benefits associated with both of these approaches.
Automated forex trading is a fantastic and amazing phenomenon. If you have not signed up for an account at ZuluTrade.com, for instance, you are missing out. The idea that you can receive signals from other traders and then automatically trade off those is utterly revolutionary, possibly one of the coolest things you can do on the Internet (and that's saying a lot).
There is also something to be said, though, for being the captain of your own destiny. Evaluating other people's advice but then making the decision based on your own perceptions. If you are a disciplined person or can become one, this more involved style may suit you to a T.
Whatever you choose--and many forex traders choose some combination of the two--you definitely want to distinguish between trading from signals versus looking at signals.
It's the difference between being the passenger in a vehicle or the driver.
Where to Find the Best Forex Signals
Now that really is the million dollar question, isn't it? Unfortunately, it's impossible for us (or anyone else) to provide you with a hard and fast permanent answer to that question.
The reality is that the best forex signal providers are changing all the time. One trader or group of traders may draw a bead on the USD/JPY for a full year, generating buy and sell signals that are money time and again, unbelievably reliable--but then the trail goes cold, the line goes dead.
When enough people find out that a system is working, that system tends to stop working. Traders start to game that system, to use it as a trap. The tool becomes a burden.
We research and test every forex signal provider we can find, and we have never yet encountered any forex trading signal system that works for every currency pair, every time, for all time.
If you do know of such a system, please alert us immediately and let us give you money.
In the meantime, look for accurate forex signals like a starving dog looks for food, no doubt, but be careful not to mistake today's delicious meal for a lifetime of opulent, worry-free dining.
Important Forex Information
The most important step in currency trading is finding the right broker; our forex experts can help. See our
reviews of forex brokers for more information.
Of all the forex signal providers we’ve tested, we’d have to say that one of the best and most likely to be around for a long time is ZuluTrade.com. Read the ZuluTrade Review
Accurate forex signals that tell you when to buy and when to sell certain currency pairs are out there. Learn where to find them: accurate forex signals.
Custom-designed, automated trading "black box" systems may give you the most potential for big gains, but they're not easy to set up. Learn about automated forex trading.