The (Foreign Exchange) Forex Trading Market Explained.


FOREX Signals

How traders use FOREX trading signals to maximize profits

One of the disadvantages of FOREX trading is the time investment needed to monitor the markets for advantageous entry and exit points.  It's possible to sit in front of a computer monitor for hours watching the markets.

Of course, you can use automated orders such as limits and stops.  These allow you to walk away from your computer with the knowledge that your losses will be kept to a minimum, but by doing so, you may miss out on potential profits because your limit order kicks in too soon.

If you don't have the time to watch your computer monitor and still wish to achieve as much profit as possible, consider signing up for a FOREX signal service.  These services monitor and analyze the market for you and send their findings directly to your computer desktop, email, or SMS on your cell phone or pager.

Companies that offer FOREX signals do so on a paid basis, so you have to sign up and pay a monthly or yearly fee.  Some brokers may offer this service as an extra which integrates into their trading software.  You can receive signals as a popup on your screen or by any of the other methods described above.

There are usually a limited number of currency pairs that are available for FOREX signals.  Most services offer signals on EUR/USD, USD/JPY, GBP/USD, USD/CHF, but specialized services may offer other currency pairs.

FOREX signals are primarily based on technical analysis of market conditions.  Most companies use a combination of indicators to identify main trends and entry and exit points.  The results are sent to subscribers who have the option of acting on them or passing.  Some services will even execute the trade for you.

Using a variety of technical studies, various types of signals can be derived from currency charts.  The SMA (Simple Moving Average) indicates buy signals when currency prices rise above the average line.  Sell signals occur when the price falls below the moving average line.

MACD (Moving Average Convergence Divergence) studies have a signal line that is used to generate a buy signal (above the line) or a sell signal (below the line).

Volume indicators are used to determine market interest.  High volume (especially near the bottom of the market) can indicate the start of a new trend while low volume indicates investor uncertainty. 

Bollinger Bands indicate potential changes in the market.  Sharp price changes tend to occur when the bands tighten while prices that touch one band tend to go all the way to the other band.

Other indicators like volatility and momentum can be used to reinforce signals provided by other sources.  Taken together they form a relatively reliable source of information about how the market is behaving.

Are signals a sure thing?  Of course not, otherwise we would all be millionaires.  Signals can give you good advice about which currencies to trade, but no signal service will guarantee their information is 100% accurate.  Reputable services will show you their track record, however, and let you see for yourself how they have done in the past.

FOREX trading signals cost - are they worth it?

FOREX signals cost anywhere from $50 to $200 a month.  It's up to the individual trader to decide if the cost is worth it.  Don't think that signals can take the place of trader education – they are advice, and if you don't have the knowledge to analyze the advice, you should go back to the books before using a signal service.



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Introduction to Online Forex Trading
Current Forex Currency Rates
Forex Trading
How to Get Started In FOREX Trading
FOREX versus Futures Market
FOREX versus Stocks
FOREX Trading Philosophy
Fundamental Analysis In Forex Trading
Forex Technical Analysis - Part 1
Forex Technical Analysis - Part 2
FOREX Trading Strategies
Trading Currencies on Margin
Currency Option Marketplace
FOREX Signals
How to Read FOREX Quotes
Calculating FOREX Profits and Losses
Risks of FOREX Trading
FOREX Training
FOREX Trading Software
FOREX Brokers
FOREX Glossary
Forex Updates and Training
Crash Course in Forex Education
How to Recognize Patterns in Forex Trading Markets
Defining Exotic Currencies and Their Impact on Forex Markets
Defining Trading Trend and Ranges in Forex Trading
Mind Games – The Psychology of Forex Market Trading
Crossing Currency - What’s This Mean to Forex Traders
Money Management Basics for Forex Traders
Choosing Your Forex Broker
Expensive Beginner Forex Trader Mistakes
The Elliott Wave Theory for Forex Markets
Failsafe Facts to Guarantee Failure in Forex Trading
Five No Nonsense Strategies in Forex Trading
Global Expansion and It’s Reaches within the Forex Market
Hedging in the Forex Market
The Important Ways to Keep From Losing in the Forex Markets
An Overview of the Euro’s Performance in the Forex Markets
Six Trading Tips for the Forex Newbie
The Lowdown on Day Trading
Interpreting How Interest Rates Drive the Foreign Exchange Markets
The Basics of the Bollinger Band Technical Indicator in Forex Markets
Relative Strength Analysis in Forex Trading
The Basics on Understanding Forex Options
Forex Charts – What Are They and How Do You Read Them
Interpreting the Future of the Oil Marketplace and How It Affects Forex Trading
Top Five Economic Indicators that Drive Forex Trading
Rules for Trading in Forex Markets
How Does the Japanese Yen Stack Up Against the US Dollar in Forex Markets
Pivot Points in Forex
The Ins and Outs of Trying Out a Forex Demo Account
The Top Currencies to Watch in the Forex Trading Game
Defining Moments Regarding Trading Trends and Ranges with Forex
Top Ten Basic Terms in Forex Trading and Their Definitions
Forex Folklore Investment Myths in the Market
Five Economic Driving Forces that Influence Forex Trading
Day Trading All You Wish You Did Not Have to Know
Time line for Daily Forex Trading When are the Optimum Moments
Forex Relative Strength Analysis
How Forex Quotes Can Influence your Trading Tactics
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