Forex signals are quickly emerging as one of the fastest-growing sub-sectors of the forex market. This is primarily because the industry continues to grow exponentially, thus attracting more novice traders. According to the Bank of International Settlements (BIS), the forex market peaked with a daily turnover of $7.5 trillion in April 2022.
This level of activity is mainly driven by large banks, institutional investors, corporations, and dealing desk brokers. However, while retail investors contribute the least volume, they are the majority in terms of representation.
However, a big percentage of them cannot consider themselves elite traders, which is why they opt to use forex signal services to speed up their learning curve.
What Are Forex Signals?
They are suggestions, prompts, indicators, or notifications about active forex trades in real time. Essentially, they tell you when to execute a trade or sell. They also give suggestions about stopping losses and taking profit and other trading essentials.
Expert human traders or robots provide these signals. And the providers value them at specific prices, while others are free. Usually, the signal provider charges a certain percentage of the beneficiary’s profit.
Forex signal notifications are usually delivered to subscribers through SMS, email, or social media platforms –social trading.
The 3 Main Forex Signals Types
When you are searching the market for forex signals, you should structure your search into three main groups.
You can have a group that classifies the different types of signal types depending on whether they are free or paid. You can also have another group that classifies forex signal types depending on whether they are manual or automated or even a group that classifies signals depending on whether they are long-term or short-term.
Free And Paid Forex Signals
Free forex signals are trading signals provided at no cost to traders. These signals are often offered on a trial basis to entice traders to purchase or subscribe to a paid package. It is the best way to introduce a new forex signal service to a community.
On the other hand, with paid forex signal services, traders make a monthly payment or make a one-off (lifetime) payment. These signals often have a verifiable track record, demonstrating their success rate, and often have no free trial option.
One major advantage of free forex signals compared to paid forex signals is that traders can use the service for free, so if it turns out to be not as successful as advertised, then there is no service loss to the trader.
On the other hand, paid signal services often have a track record from which a trader can judge before deciding to use the service. Therefore, in this case, you are using a tried-and-tested service with evidence to back the advertised performance.
Manual And Automated Forex Signals
This grouping of different types of forex signals is based on whether the signals are generated manually, or using an automated system.
Manual forex signals are derived by an expert trader or a group of analysts who coordinate to analyze the market and come up with actionable trading opportunities. Analysts look at upcoming market events, recent economic data, and market trends to generate forex signals.
Because the signals are generated manually, they are often limited in number. In addition, due to the decision-making process that at times involves a big team of analysts, it can take longer to come up with an actionable trading signal.
On the flip side, this implies that the signals are also likely to have a higher degree of accuracy due to the care and due diligence taken to generate them.
Automated forex signals rely on a computer algorithm designed to detect trends in the market using technical tools and indicators like moving averages, Bollinger bands, and pivot points among others.
Because these signals are automated, traders can expect to receive multiple signals depending on their preferences. Most automated signal services have filtering options, allowing traders to choose specific currencies or indicator types, as well as time frames.
Failing to use the filtering tool can result in you receiving multiple forex trading signals, some of them potentially high-risk.
Long-Term And Short-Term Forex Signals
Long-term forex signals are often provided during trending markets. If a given currency pair is on a long bullish run, the signal service provider can send a signal instructing the trader when to enter a new position. Subsequently, given prevailing market circumstances and the time frame of a bull run, the signal service can send instructions to the trader on when to exit the position.
One thing to note with long-term forex signals is that providers can only offer one signal at a time, an entry, or an exit.
On the contrary, short-term forex signals come with both entry and exit instructions. These types of signals are perfect for day traders, who open and close positions on the same day.
Therefore, traders tend to receive a lot more short-term forex signals compared to long-term forex trading signals.
Telegram.Forex – Handy Tool For Getting Prompt Forex Signals
Telegram.forex is one of the readily available copy trading applications that assist traders with automatic access to trading results of professionals via their telegram channel. It is the perfect system for automating your trading and getting prompt FX signals through social trading. As a medium for social trading, it connects all your telegram channels and automatically replicates trading signals. The trading signals are easily understandable.
Forex trading signals provide traders with a shortcut to making money in forex. Rather than trying to juggle the technical aspects of the markets yourself, you can subscribe to a signal service like Telegram.Forex to receive trading alerts from top forex signal providers.