How Forex Signals Can Turn a Newbie Trader Into a Seasoned Investor Overnight
Whether it’s forex, stocks, indices, or commodities – making money as a full-time trader is no easy feat. In truth, it takes years to learn the ins and outs of technical analysis and thus – be able to read charts effectively.
If you can’t do this, then it is going to be extremely difficult to make consistent gains. In fact, you are likely to lose your bankroll in its entirety.
On top of the technicals, you also need to have a firm grasp of how fundamental news can impact the real-world value of a currency. Again, this isn’t something that you can learn overnight.
However, if you’re keen to give forex trading a go right now and you don’t have the required skills or knowledge in place, there is one saving grace – forex signals.
In a nutshell, forex signals alert you when a potential trading opportunity has been discovered by an automated algorithm. The underlying system scans the markets on a 24/7 basis and provides subscribers with the required entry and exit prices to place an instant trade.
As such, newbie traders can benefit from advanced forex research tools without needing to have any prior experience.
How do Trading Signals Spot Opportunities?
In order to scan dozens of forex pairs at any given time, the underlying technology will utilize traditional technical indicators. These indicators will look at historical market trends, with a specific focus on metrics like trading volumes, liquidity, support and resistance lines, and market depth.
Collectively, the algorithm will then compare these key metrics with current prices, with the view of identifying a potential trading opportunity. With that said, building an advanced algorithm that is able to outperform the market is something that requires expert precision. Learn 2 Trade – a UK-based education and forex signal service, explains that it took the platform a number of years to perfect their automated system.
Not only this, but the system requires ongoing maintenance to ensure the algorithm is using strategies that still work. This is why free trade signals are not worth the paper they are written on. After all, it wouldn’t make sense for a software developer to spend years building a proven forex signal system, to then simply give it away for free. Instead, companies like Learn 2 Trade will install a subscription-based model.
What do Trade Signals Look Like?
Although the algorithmic process that goes on behind the scenes is extremely technical, those that sign up for a forex signal service are not required to have any knowledge of trading principles. On the contrary, as long as the user knows how to open a trading account, deposit funds, and set up an order – the rest is taking care of.
For example, let’s say that the algorithm is analyzing historical data on GBP/USD, and notices that a key support line is about to be broken. This means that there is a high probability that the price of GBP/USD will go down very quickly if the support line is breached, as it often acts as a last line of defense.
As such, learn to trade notes that their forex signal alert might look like the following:
Indicator: High probability of 1.3100 support line being breached
Order: Sell Order
Entry Price: 1.3050
Stop-Loss Order Price: 1.3130
Take-Profit Price: 1.2980
As you can see from the above, not only does the subscriber have the required information to place the trade, but they are also provided with stop-loss and take-profit suggestions. This ensures that the newbie trader can mitigate their risks in the event the signal doesn’t pay off. After all, the algorithm won’t get it right 100% of the time, so it’s important to have a risk management strategy in place.
How can Newbies Test a Forex Signal Service?
When it comes to finding a forex signal service, there are now hundreds of providers operating in the online space. This makes it extremely challenging to know which platform to go with. Learn 2 Trade suggests that newbie traders should only sign up with a trading signal service if the provider offers a trial.
This then allows you to verify the success rate of the signal service without risking large amounts of money. It also allows you to avoid getting locked into lengthy subscription plans, or paying a hefty one-off fee. Learn 2 Trade itself offers all new subscribers a 30-day moneyback guarantee.
As a result, you can keep a tally throughout the month of each signal that comes through and then make an informed decision. If you ended the month in profit, it’s well worth keeping your subscription. If not, you can simply walk away. Ultimately, if the forex signal provider does not offer a trial of some sort, ask yourself why.