What are Forex Signals?

🔔 Forex Trade Signals

Forex signals are trading suggestions to buy or sell a Forex currency pair at a specific price and time. A Forex signal can be generated manually or through advanced forecasting systems. These signals may be executed manually by the trader or automatically using Expert Advisors (Forex robots).

 

How Are Forex Signals Delivered to Traders?

Forex signals can be provided for free or as part of a paid subscription service. The most common delivery methods include:

  1. Through registration on a signaling website

  2. Via email

  3. Via SMS

  4. Via Twitter

  5. Through an automated system known as a Forex robot (or Expert Advisor)

 

What Information Is Included in a Forex Signal?

A Forex signal typically includes:

  1. A target or take-profit price

  2. A stop-loss price

Here’s a simple example:

Let’s suppose the signal is for EUR/USD, currently trading at 1.2000, and the signal provider predicts an upcoming appreciation of the Euro:

  • Take-Profit (Target Price): 1.2042

  • Stop-Loss: 1.1980

 

 

Profit-to-Loss Ratio and Why It Matters

This ratio is crucial in evaluating the effectiveness of a trading signal. Based on the example above:

  • Profit Potential: 1.2042 – 1.2000 = 42 pips

  • Loss Potential: 1.2000 – 1.1980 = 20 pips

That means the Profit-to-Loss Ratio is: Profit / Loss = 42 / 20 = 2.1

  • Generally, a ratio above 2.0 is considered favorable for traders.
  • Note: While there are exceptions to this rule, the very existence of exceptions only confirms the importance of the rule.

 

Free and Paid Forex Signals & Providers

Forex brokers often offer free signals to encourage account openings or maintain client activity. For more advanced signal services, you can subscribe to a paid provider. Subscription costs vary, typically ranging from $30 to $300 per month, or even more.

Generally, if a Forex signal service has an accuracy rate above 0.60, it may be considered effective. An accuracy of 0.60 means that 6 out of 10 trades are winners. If the Profit-to-Loss Ratio is greater than 2:1 and the signal accuracy exceeds 0.60, there is a strong potential for profitability. However, these figures are assumptions, and it is advisable to evaluate any signal provider using historical performance data.

 

Visit Forex Signal Providers

Here are some popular Forex signal services and their pricing: 🔗 » Forex trade signal services

 

Compare Forex Signal Providers

At ForexAutomatic.com, you can find a wide range of reviews on various Forex signal providers. 🔗 » Find Forex signals service comparisons

 

🔗 COMPARE: » Forex Brokers Online | » Forex Bonus

🔗 Read More: » What is a Forex Account

 

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