Forex signals are best described as detailed trade recommendations or ideas.The sources of the best forex signals are usually experienced investors.Many online services and websites provide forex trading signals, for a fee, or even for free.But how can you find the best?Read on for a list of the top forex signals in 2023.
Introduction To Forex Signals
Because a forex signal is essentially a small bundle of text-based information, it can be transmitted through a variety of channels.
Forex signal providers deliver their recommendations through live messaging, email, Skype, YouTube, Twitter, Reddit, Instagram, Facebook, trading forums, dedicated apps or even on WhatsApp groups with a straightforward sign-up link.There are even forex signal Telegram groups.
The FX signal ecosystem has created fully-featured, dedicated trading environments as well.These signal-based investing solutions allow providers to use interactive charts, stream videos and monetize their activities.
Importantly, profitable trading is the Holy Grail of many investors and the most straightforward path to returns is arguably through forex signals.
If you are looking for a dedicated, specialist service, see our list of forex signal providers below.
How Forex Signals Work
Forex signal systems are one the most important tools in the arsenals of many profitable traders.
Beginners, as well as advanced and experienced investors, use forex trading signals. In fact, there is an entire industry built around trading signals and investment recommendations.
Quality forex signals do not just tell you when to jump into a certain trade and the direction of said trade. They also include detailed information on the configuration of your Stop Losses and Take Profits.
The best way to make certain that you are dealing with quality trading signals is to test them on a demo account. This way, you will not lose real money if it turns out your forex signals are subpar.
You should also pay attention to time frames. Due to their transmission nature, forex trading signals do not work well for strategies like scalping. By the time you receive the signal, the scalping opportunity has probably already come and gone. That said, there are scalpers out there who still use this type of service.
Every FX signal system is a reflection of the personal methods and preferences of the signal provider. Therefore, each system is different.
With that said, there are two key categories into which most forex trading signals fit:
- Technical analysis (TA) based
- Fundamental analysis-focused
TA-based forex signal systems derive their trade ideas from past price movements coupled with various mathematical formulas and trend recognition techniques.
Signal providers analyzing current events and deriving investment opportunities from the impact of these events are in the second category.
Finding The Best Forex Signals
The quality of your forex trading signals can make or break your profitability.
Since there is not much skill involved in applying them, the only variable in the equation is the selection process.
Go through this checklist:
- Time Zone – Before you start, take a look at the time zone of the provider. You want your forex trading signals to trickle in while you are awake.
- Free Trial – Sign up for a free trial period. This will clue you in on the quality of the service, without requiring you to pay “tuition” in the form of losses incurred on bad signals.
- Compare – Continue looking and comparing the FX signal services that suit your trading style and risk appetite. In the end, pick out the best one.
- Track Record – Look at the track record of your provider. This should tell you everything you need to know about the setup performance-wise. Only track records verified by a 3rd party should be considered. Also look for the best forex signals reviews online.
- Full Analysis – Go for the total package. Low-effort providers, such as those only giving you the entry price and the SL/TP, should be ignored. You need to know why it is supposed to work. To that end, you need your FX signal provider to provide supporting charts and market analysis.
- Focus On You – Make sure the style of the forex signals fits your trading needs. There are short- and long-term signals focused on intraday breakouts and reversals etc.
Profitability should always be your top priority, along with how the trade idea is delivered, be it via WhatsApp, social media, or email.
- Extras – If possible, choose a provider that offers additional services. These can be educational or social trading-oriented. Provided you are dealing with quality trading signals, such perks can add a great deal of value to the setup.
Note, finding MT4 forex signals is a different story. In the Terminal window, select the Signals tab. This section features scores of forex signal providers with handy graphs of their trading performance.
Comparing Forex Signal Providers
Run a search on forex signal rankings. There are scores of websites out there comparing signal services. Pick a few off the top and read the reviews. Alternatively, see our detailed rankings.
Sign up for any trials they offer and use the checklist above to determine how well they stack up. Take into account the communication channels the providers use. Do they deliver their trade recommendations through Skype, email, SMS or Telegram? Do they use specialized platforms?
How To Use Signals
Opening a position based on a forex trading signal is simple:
- Your first step is to log into the provider’s channel
- Grab the data delivered and copy it to your account
- Wait for the trade to close and pick up the proceeds
What Is Included In The Best Signals?
More precisely, a forex trading signal should tell you the following:
- Comments, charts and explanations concerning the recommended trade setup.
- The instrument/currency pair you will be trading (EUR/USD, BTC/USD etc).
- The direction of your trade.
- Next to the actual asset price, a BUY or SELL action should be indicated.
- The entry price is self-explanatory. It is the price level at which the provider recommends that you should jump into the trade.
- The take profit (TP) is the price level at which your trade is automatically closed if it goes your way. Taking your profits at the right time is as important as protecting yourself through a stop loss.
- The stop loss (SL) is where your position will automatically close if the market turns against you. This is a damage control feature and as such, it is important for long-term profitability.
- The status: forex signals can be Active, Get Ready, and Closed. Active signals can be put to use immediately as they are. Get Ready signals are not yet active, but they may become shortly. They may also disappear. Keep your eyes on them, but do not act unless they become Active. Closed signals are expired.
Trades can be closed in three different ways. Besides the automatic closure triggered by the SL or the TP, the provider can close it manually as well. In such cases, an explanation is provided in the comments section, together with the closing price.
Under certain circumstances, the signal provider may even recommend the extension of the TP, to increase the profit margin.
How To Use Different Types Of Forex Signals
To maximize the potential of your trading signals, you may want to tweak some of the variables.
Take Profit And Stop Loss
Moving your take profit is an obvious way to expand profit potential.
Most services use a fixed pip amount when setting the take profit level as well as the stop loss. They rarely jump in to tweak these variables as the trade unfolds.
If you deem the potential of the trade better than what the profit level allows, you can move it. In some cases, completely removing the take profit may be justified. Just remember not to hold the signal service liable if your bold move backfires.
Moving your stop loss may in some cases save an otherwise doomed trade. Like the profits, the stop loss is normally set to a fixed pip limit. Furthermore, it sometimes lands just below a moving average or a resistance level. In such cases, moving it above the critical level may be a good idea.
The entry price is not set in stone either. In this instance too, many services prefer to err on the safe side. As the price evolves, a better entry price may develop as well.
Manually closing a trade may be the right course of action when the asset price is rattled by a sudden real-world event. There is no way for the forex signal provider to predict such events. If one does come about, the bets are obviously off.
Tinkering with the lot size is another signal-optimization avenue.
Some of the FX signals provided by a service will offer a higher probability of profits than others. As you rack up experience, you will be able to tell which investments are which.
Increasing your traded lot size on high probability signals makes good sense.
The same is true for decreasing your traded amount on low probability signals.
Keep an eye on correlated FX pairs. If you get a signal for the AUD/USD for instance, the same signal can probably be applied to the NZD/USD pair. Sometimes the trade “derived” through this method will turn out to be more profitable than the original recommendation suggested.
Investors sometimes forget to take the spread into account when setting their stop losses and take profits. Adjust your automatic closing points accordingly. Keep in mind that the spread is different from one FX pair to another.
Free Forex Signals
Signal service providers generally use free forex signals for promotional purposes. They will make them available while looking to sell some sort of service or product further down the line.
As a promotional vehicle, a free forex signal cannot afford to be of inferior quality. Sometimes, however, that is exactly what transpires.
A premium forex signal service needs to deliver from the very beginning. Since premium forex signals represent the bread and butter of the service provider’s offer, they are usually high quality.
Let’s not lose sight of the fact, however, that no forex signal provider can ever guarantee winners.
Live / Daily Signals
Live/daily trading signals are in essence run-of-the-mill forex signals, which are delivered with higher frequency.
Such signals are appropriate for intra-day trading.
- 1000PipBuilder.com – Rated 5 stars based on user feedback across multiple platforms. Regular trade advice and full, ratified results
- Forexsignals.com – Live streaming and promo cash giveaways, forexsignals.com offers signals and education in equal measure
Copying Trades & Social Investing
Social trading or copy trading is about using the forex signals provided by successful investors. As mentioned, MT4 offers a Signals section, where it displays the trades and statistics of those who decide to share this information with the community.
The system rewards investors for their “signal-providing service” through fees paid by their subscribers. The Signals page displays the most successful forex signal providers at the top. This way, it more or less takes care of the selection process for users.
There are quite a few similar (and even better) trade copier services out there. eToro is a good example in this regard.
Forex Signals For Technical Analysis Traders
TA is generally suitable for investing over the short-term across supply/demand inefficiency-induced price swings.
Fundamentals, on the other hand, typically lend themselves to longer time-frame positions. The best forex signals often take fundamental factors into account as well.
Forex signal providers churn out most of their hot tips based on price patterns, which mostly consist of support and resistance levels. Other technical indicators and price structures/patterns can be used as well. This is ultimately the very definition of TA-based forex signal generation.
Forex Signals For Scalping
While longer-term trading signals aim for hundreds and even thousands of pips in profits, some FX signal providers will settle for a few pips at a time. Short-term forex trading signals lend themselves well to scalping.
Note that despite their short-term nature, scalping signals are not based exclusively on technical analysis. They can incorporate a fair share of fundamentals too. This way, they combine indicators such as trend lines, support and resistance levels and stochastic oscillators with economic news, data releases and announcements.
The pseudo-science behind the forex signals industry is by no means an exact one. Therefore, it is conducive to scamming. Crooked operators have plenty of room to manoeuvre in this vertical. While we have already filtered out scam-suspicious services, you should be able to spot a forex signal scam yourself:
- Services with unrealistically good (and unverified) track records are almost guaranteed to be scams
- FX signal providers offering to trade in your stead, with your money, are most definitely scams as well.
- Auto-trading on a hijacked account is not considered as signal-based trading anymore.
- It is important to be cautious of forex signal providers who use pushy and unethical marketing tactics to sell their signals for binary options.
If you have doubts about your forex signal provider, it is best to move on to another one.
The Bottom Line on Forex Signals
There are numerous forex trading signal services available, but the best one for you will depend on your financial goals, investment style, and risk tolerance. Before subscribing, make sure to read online reviews and have a selection process in place to ensure that the service provider is of high quality. A good signal service can greatly impact your profitability. Check out our list of the best specialist forex signal providers or our ranking of online brokers that offer forex trading signals.
Are Forex Signals Available Worldwide?
Yes, forex signal services are available internationally in countries such as Canada, Australia, Malaysia, South Africa, and many others. However, the best forex signals for you will depend on your goals and trading style, as well as producing high profits.
What Is Forex Signal 30?
Forex Signal 30 Gold Edition is a service that provides price movement indications for FX pairs, indicating when an investor should open or close a position. It does not repaint the signals.