Trading signals

Before the arrival of forex trading robots common in the forex markets today, forex signals have been playing an elegant role in the forex market. The forex traders never had any option then than to invest their funds merely to get signal generators that will give them accurate information for forex trading success. The use of trading signals has helped forex traders have an excellent knowledge of what should be done on their trade to win. Trading signals served as a great tool that helps them to decide if they will make significant profits or none at all.

Take note that if you have successfully mastered the market on your own and you understand the logic of how, why and when the market fluctuates or why it has decided to move towards a particular direction, you may not necessarily need to opt for a trading robot or signal. But have it at the back of your mind that without trading signals or robots you cannot be a successful trader.

What is trade signal?

Trade signal is a sign used by technical indicators to indicate a good time to buy or sell a particular security. Trading signals are available in a variety of forms, which include triangles and wedges, rectangles, bull or bear pennants and so on. Trade signals are also capable of calling your attention to abnormal market volumes, options activity, and short interest.

The combination of a trade signal alongside fundamental analysis becomes an excellent weapon to investors helping them add to their stock trading arsenals.

How to Find a Useful Forex Signal Trade

Having understood the basics of what forex trade/signal is all about, there are many schools of thought that can give you a proper trading signal business. For example, in order to get an essential trade, one way is to use a simple 14-period exponential moving average or EMA – on a one minute chart. While trading and you realize that the market closes above EMA, this is an indication that you should buy and when it closes below EMA, you sell.

Obviously, for most people, that trick is too simple to believe, that is why we shall add another component to our trade so we can be more assured of the direction of the market. Because of that, let’s add another element to our business to make it more convincing. Let us add five-period EMA which will make us move to a 5 or 15 minutes chart because that is the best place it works perfectly.  So the basic rule of this is that, once you notice the crossing of 5 periods EMA above the 14 periods EMA, we buy and when it crosses below we sell.

Now we need to add more components to our trade so we can have higher trading probabilities that can help us enhance the business direction. Now we shall now add a 62 period simple moving average of EMA to our trade. In this case, the moving up of the 62-period trade shows we can take a long buy trade and then pass on the sell trades at the same time once the 62-period SMA is pointing down, then we take sell trades. The reason for our decisions is just for us to understand the market trends. With this method at hand, we will be able to net more pips with fewer stop outs. Similarly, just as you can have in every other trading signal, always make sure you have a stop in place and don’t get out of positive trade until there is a signal indicating why you should quit the market.

However, before embarking on any trading signals at all, do not hesitate to use the signal for a demo trade before you eventually run a live account with it.

Conclusion

Just as we can see, making money from forex is not something that a newbie can jump into without doing proper research or passed through a tutorial class. It is advisable to demo trade for six months so that you can understand the basics of the forex market before you can eventually think of making money it. More so, while trading and you realized that you had missed a trade, do not give up as many more valuable deals are still coming your way. Finally, if you want to be a professional trader do not be an aggressive trader as it can make you lose all your hard earn money. Meanwhile, you can look for a good company that provides accurate trading signals that will make you good profit.


Categories: Stock Market

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July 20, 2017 Trading signals