Forex signals are currency prices at which an entry and exit point is specified as well as the appropriate stop loss and limit stops. These signals are generated by a number of sources as well as by traders themselves.
Sources of forex signals are:
Most forex brokers offer forex signal alert services either themselves or through third party arrangements. If you have trade either with a demo account or a real account the forex signal service is free. However, if you are not a trading client or the signal service is from a third party you will have to pay a monthly fee for the service. Monthly fees average around $200. You can choose to have the signal e-mailed or text to your mobile phone or you can simply go to the broker’s web-site to get the signal. Because these signals are generated by professional traders they are in the main more accurate than the automated forex signal software. However, as with anything to do with the foreign exchange markets nothing is ever 100% correct.
There is also a lot of software around which are essentially forex robots. Their developers claim to be able to identify entry and exit points automatically for all the major currency pairs. They often display in their advertisements copies of trading blotters showing hundreds of pips gained over so many days or weeks. The software packages are fairly cheap and ranges from around $100 to $200 per package. All are downloadable and all of the packages offer a money back guarantee of anything from 30 to 90 days. These packages are supposed to be like the fly by wire airplane concept where you load them on your computer set them going and sit back and let the money roll in. Somehow they don’t seem to live up to those expectations.
Successful traders generally do not rely on others or software to generate the signals that they trade upon. Successful traders have spent hours upon hours honing their technical analysis skills using price charts and the many analytical tools such as bar and candlestick charts, momentum indicators, relative strength indicators, moving averages, waves and retracement levels. Using their tools in conjunction with fundamental analysis these traders are able to identify profitable entry and exit price points which are in fact their own home grown forex signals.
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