Have you ever wondered how professional forex traders stay on top of the markets?
The truth is that they have access to a variety of tools that help them make smart trades. One of these tools is called a forex signal.
Forex signals are generated by a trading platform or a software program.
Signals can be based on technical indicators, other traders’ trades, news events, or any number of other factors.
Many forex traders combine signals with other tools, such as charting or fundamental analysis, to help them make strategic trades. In this post, we’ll review the top five forex signal providers and how to get forex signals.
What is a Forex Signal?
A Forex Signal is a trading suggestion released by a signal operator to traders, who, in turn, use it as a barometer to place buy or sell trades without doing their own market research. They don’t do their research because the signal operator has already done that on their behalf. Forex signals are basically research results broadcasted to multiple people via one or more communication channels. Common modes of broadcasting signals include
- Text
- Social Media Messaging (Whatsapp)
The signal provider only broadcasts to subscribers interested in using results from their service to execute trades, and there are two types of signals, namely automated signals and manual signals.
Types of Forex Signals
Automated signals are trade research performed by automated algorithms. The use of computers to generate data has been ongoing for a very long time, so some signal service providers use algorithms to analyze trading data. The results of their finding are what is then broadcasted to subscribers.
The Second type of Forex Signal is the manual type. Unlike automated signals, manual signals are analyzed by humans, not computers. Under this method, the signal provider, who may be an individual or group of experienced traders, analyzes the market using technical and fundamental analysis. Then, they broadcast their findings to their subscribers.
What do Signals look like?
Forex signals, whether they are automated or manual, look like this
Pair: EUR/USD
Entry: 0.7560
Order: Buy Order
Stop Loss: 0.7580
Take Profit: 0.7150
This is what an average signal looks like once you receive it. Everything is laid bare for you, and all you have to do is execute the trade on your live account by infusing the parameters in exactly the same way without any change whatsoever.
Signal Metrics explained
Pair
The Pair in the above example is EUR/USD, which is a buy order. Not all forex signals will use the currency pair like this one, but on average, most of the pairs are major and minor pairs to ensure more liquidity and less volatility. Major and minor pairs also allow traders to trade using tighter spreads.
Entry
The Entry-level indicates at which point you are to enter the market. This part is what many beginners find very confusing, even after analyzing a trade accurately. To help traders avoid entering the market at the wrong point, the provider will provide you with the entry price or point.
Stop Loss
Stop Loss is a risk management data that helps you limit potential losses should the signal go wrong. Even the best providers understand that their signals can go wrong sometimes. So, as a safety mechanism, a stop loss is added to the signal to help users exit the market automatically if the market goes against the signal.
Take Profit
Take Profit is the reverse of Stop Loss, and it is also a risk management tool. Take Profit allows traders to lock in profits automatically, and the reason for this is simple. Suppose you open a trade, and the market is reacting just as you projected; the possibility of a price reversal is always imminent. So to prevent all your gains from being lost, the Take Profit simply locks in the trade and prevents you from losing what has already been earned.
Best Forex signal providers
To get a forex signal or to get signals consistently, you will need to subscribe to a signal service. Once you do that, you will receive signals every day as long as the market is open (Monday-Friday). Signal services are either paid or free, and we will address them in a subsequent section, but for now, let us review the best forex signal providers that many have come to trust.
Forex.com
Forex.com is one of the best forex online brokers in the world, and many traders use their trading platform to trade forex. Operating from the US, this service provider has an advanced platform loaded with all the advanced and high-tech features that traders find useful and great for seamless trades. Beyond that, the platform broadcasts signals to subscribers, which they use to execute trades.
One of Forex.com’s effective tools is its Autocharist tool. This tool scans the market for profitable trading opportunities by identifying chart patterns and trigger points. It also has a special analysis tool called Recognia which traders can use to plan trades. Forex.com signals are easy to understand and use because they give a clear and visual representation of charts and offer clear reasons why a trade may be profitable based on current market conditions.
Learn 2 Trade
Another very good forex signal service provider is Learn 2 Trade. This provider offers educational resources to traders to help them improve their trading skills, and one of the highlights of their service is the forex signal service. Learn 2 Trade broadcasts signals using a special Telegram group, and the analytical method is automated. Their pre-setted algorithm scans major and minor currency pairs for trade opportunities, and once one has been identified, it is broadcasted to subscribers in the Telegram group.
Learn 2 Trade has a free service and a premium subscription plan. The free service offers an incomplete analysis of the market daily. To get complete signals, you will need to subscribe to the premium service.
ForexSignals.com
ForexSignals.com is a full-service forex website that provides several support services and various trading tools. There are mentors on the platform to guide you and help you become a better trader, and there are live streams and webinars featuring successful traders and professionals in the field who teach and provide feedback on every trading move made. The signal service offered by this provider is one of the best in the industry. You don’t just receive signals from ForexSignals.com; you also receive the analysis behind the signal.
1000pip Builder
One of the best in the game is 1000pip Builder, and they have been for a very long time. The track record of this provider has become somewhat legendary. That is why many traders subscribe to their platform. One of the reasons for their growth in recent years is because their signals have proven mostly accurate in challenging markets with high volatility. 1000pip Builder is one of the few signal providers who can prove their results with verifiable data. They have a very good customer support system, and their signals help users lock in profitable trades more often than not.
MQL5
MQL5 may not be as popular as 1000pip Builder or Forex.com, but it is a very good forex signal service provider. If you use MetaTrader platforms, you will enjoy using the signals provided by MQL5. What this platform does is that it offers you a roster of different signal providers, so the choice is yours to decide which ones to copy trade. The only downside to this provider is that it allows anyone to broadcast a signal, and there is very little chance of you knowing the competence of the entity broadcasting the signal.
However, you are free to avoid using any of the signals you receive if you cannot validate the provider’s skills. For what it’s worth, though, MQL5 offers you the opportunity to assess signals by different providers, which can be a good thing if used properly.
ForexGDP
As an extra, here is another very good signal service you just might want to try. ForexGDP is a low-cost signal service provider that offers a free service. Subscribers receive up to 4 signals every month, and the calls generated can be 90 pips to as much as 150 pips. Subscribers receive signals via their WhatsApp group. However, if you want to trade for higher profits, their paid plans will serve your interests.
Their paid plans can go for as high as $74 monthly to trading pips as high as 700 pips, and paid subscribers can get between 8-12 signals every day. However, their more expensive plans offer more. If you plan to use this service, make sure you do a detailed search before subscribing to their service.
Should I go for a Free or Paid Forex Signal Service?
All the signal service providers we reviewed in the previous section have one form of free signal service or the other. However, there are also providers who offer mainly free or paid service, which only leads to confusion if you are new to forex trading. Should I go for a Free or a paid forex signals service?
In this section, we will attempt to answer the question so that you can make an informed decision.
Free Forex Signals
A free signal service is unpaid for. Traders only have to subscribe to the service, and they will get regular signal broadcasts detailing trading suggestions. However, with a free service, you don’t get everything even though it is free. Most free service providers cover key information, and without the information, the signal is as good as useless unless you are an experienced trader who can do your own analysis to fill in the missing data. For example, a free signal update to subscribers may look like this.
Pair: USD/EUR
Order: Sell
Entry: 1.xxxx
Stop Loss: 1.xxxxx
Take Profit: 1.2678
From the above, you will see that the subscriber received the signal alright, but certain key information is hidden. And as you already know, without the blacked-out data, this signal is as good as useless since you will not know at which price to enter the market and where to place your stop loss. Free Forex signals are only meant to entice you to subscribe to their platform. So regardless of the name, a free signal is not free at all because to access the key data to use it, you will have to pay for access.
While you, like many, may consider this a dishonest method of marketing, many will argue that wanting a free service to make a profit from a platform whose owner may have spent a year building it is selfish. With that being said, some providers offer the complete package for a short while before they start performing blackouts.
A platform like Learn2Trade, for example, offers new subscribers a free plan with the complete package. Free subscribers get the same quality signals as paid subscribers but only for a short time. As a free subscriber, you get about 3 signals per week. This model is simply meant to help new subscribers test the quality of the signals before they go for the premium plan that is paid for.
Paid Forex Signal
As for Paid forex signals, the explanation is relatively simple. To enjoy this service, you have to pay for it. The subscription fee varies depending on the provider, but you can cancel the service at any time. Some paid signal providers charge a one-off fee for an extended period, while many others charge a monthly fee. Paid signal providers give you the full package and do not blackout any data, so you have the full access you pay for. However, when choosing a payment plan, we recommend the monthly plan because of investment security. A one-time payment for an extended period may be the cheaper model, but it places you at risk because a service provider who has taken your money for a period has no interest in keeping you satisfied.
So which is better?
Well, the answer to the question is as clear as day. If you are serious about making headway as a forex trader and want to use a signal service, we recommend a paid service over a free service. For starters, a free service gives you incomplete information. Secondly, no provider will be motivated to do a detailed analysis of trades when there are no financial benefits to be enjoyed at the end of the day. Finally, even if the free service offers you a complete set of data, you should be wary as a trader.
As for the paid service that we recommend, we advise a monthly service at least in the beginning to help you gauge the provider’s expertise and the accuracy of their signals. The last thing you want is to pay for a 6 months service only to get inaccurate signals daily. In such a scenario, you end up losing both ways. Your invested capital and the subscription fee.
What to look out for when choosing a Forex Signal Provider?
These days, there are so many signal providers online, and they all claim to offer traders accurate signals to help them place successful trades. Unfortunately, the claims of many of these platforms are hard to verify, but there are clever ways to find out if a provider is as good as they claim. Here are some ways to rate a signal service.
Success Rate
What is the success rate of past signals? Also called the win rate, the success rate is one of the best ways to tell if a service is worth your investment. Many providers publish their success rates on their websites and multiple social media platforms, but that is not the catch. The catch is that these results can be verified by you. Some of the best providers boast 60-70% success rates for all trades placed. Avoid services that do not publish their success rates as they may not be truthful about their claims.
Number of daily signals
How many signals should you expect to receive daily for your investment? This is another very important piece of information to ask for before you subscribe to any service. If you want to become a full-time trader, a signal service that sends signals regularly is the one you should go for. However, you need to understand that some signals are only viable for a very short time, and you may not have the time to use all the signals you get. So, if you do not want your subscription fee to go to waste, you need a regular signal service. However, do note that the quality of the signals is more important than the number of signals you receive.
Delivery
The delivery mode is just as important as the quality of the signals. Like we pointed out before, forex signals are only viable within a very short window. A few seconds delay may render the signal outdated and useless to you. This means that you need to use the information as quickly as possible, so you don’t lose money. So how you receive the signal is important. We recommend a provider who sends signals via multiple channels or, more importantly, via a channel you can quickly receive the information and act accordingly.
Instant messaging apps are best for signals, unlike emails that many don’t use often. Telegram is one of the best instant messaging apps for sending and receiving signal broadcasts. While other apps like Whatsapp may work, Telegram is one of the best.
Experience
Experienced market analysts are like old wines that get better with time. Manual and automated services are better rated if they have been active for a very long time ago and have a track record of broadcasting successful signals. Three years of experience or more is a sign that the forex provider can be trusted. Why did we reach this conclusion?
You see, forex is a result-based enterprise. If a signal service broadcasts bad data that cause subscribers to lose more money than they earn, they will lose subscribers and go out of business. So the longer a provider has been in business, the more likely are the positive results to show. For example, all the signal providers reviewed in this article have been in operation for five years and more. Just ensure that you do your own research before you make a final decision.
Reviews
Another very effective way to identify a signal provider you can trust is by reading reviews posted by customers who currently use their service. While the average provider will never sell their platform short, their customers will not be shy of expressing their views about the quality of service that they receive. If you find a service whose customers post more positive feedback than negative ones, the service might just be a very good one. If the reviews are 50% positive and 50% negative, then it is not a good service. A higher percentage of negative reviews is even worse. While researching reviews may take more time, it is still an effective way to gauge the profile of a service provider.
Social Media Groups
Not all providers have a Social Media group like Facebook Groups, Telegram Groups, or Reddit Forums. The ones that do are often the best. This is because such groups contain people who are customers and non-customers of the service. Via these groups, you can review the quality of their signals daily. Group members react in real-time to signal updates and how they fare in the market. If the results are very good, you will be able to tell by just reading the comments in the groups.
Currency Pair
The best signal services broadcast signals for major currency pairs or a mix of major and minor currency pairs. Major pairs are quite popular on most online platforms. Also, a mix of major and minor currencies is not a bad thing; however, a platform that broadcasts minor pairs only is suspect, and their analysis is suspect. So to be on the safe side, go for services that either broadcast major pairs only or a mix of major and minor pairs.
Subscription fee
How much is the subscription fee? Is it something you can afford? Before you commit to using any service, make sure that they offer a wide range of subscription fees to broaden your options. A single pricing plan may not be a negative sign and enough reason to reject the service; however, multiple plans make it easy for you to pick the one you can afford. Another feature you may want to pay close attention to is the grace period. The best service providers don’t expect you to pay immediately for their service but give you a short window to test their signals before you subscribe.
So, in a nutshell, a flexible subscription plan and a grace period are two important pricing policies to keep a close eye on.
NB: There are different ways to review the quality of a signal service. Combining two or more methods is advisable.
Do Forex Signals work?
Do Forex signals really work? That’s the most important question an average observer will ask before deciding whether to subscribe to a service or not. The simple answer to this question is yes; forex signals do work, and the most successful traders use signals partially or completely to enter and exit trades. But to use them properly and not to suffer losses, they have to be used according to instructions and within the timeframe given. For example, delays by a few minutes may render the signal invalid and lead to losses. But there is a caveat.
Signals are best for traders who have at least an average knowledge of the market. Market awareness is very vital when trading with signals. Using signals without understanding what the market is saying or the market implications of the signal is a recipe for disaster. In addition, always use stop loss when trading signals to manage your risks.
Pros and Cons of trading with signals
To conclude this article, here are some of the pros and cons of trading with signals.
Pros
You don’t have to watch the market 24/7
You don’t have to watch the market 24/7 when you trade with signals. Focusing on the market for several hours each day will rob you of the productive time you may spend on other endeavors, but with a reliable signal service, you only enter the market when you get a signal to do so.
Improve confidence
Signal services improve the confidence of traders, especially when they trade with a signal service that they trust with a track record of success. A signal service will open you up to several trading opportunities that you will exploit with full confidence.
Deepen your knowledge
One advantage of trading signals many websites do not cite is that it deepens your knowledge of the market. You also learn the most important aspects of trading within a very short time.
Low fees
If you use an affordable service, you only pay a fraction of your earnings as a subscription every month. At the end of a trading period, all you need is 6 or 7 successful trades out of 10 to break even, and there are signal services that can guarantee you that.
Alleviate personal risk
When you trade with signals, you leverage the experience and expertise of other forex experts who are more experienced than you. The service they offer alleviates the risks you would have borne on your own.
Cons
Scams
The major con with signal services is that there are more scams than legit providers. That a signal service looks authentic does not make it so as looks can be deceiving. For this reason, many people have fallen prey to dishonest platforms, and they suffer dual losses. The loss of the fees they pay and trading losses at the same time. This is why it is important to do your due diligence before subscribing to a service.
Cost
Another major drawback is the cost of the service. Market analysis takes a lot of time, so no analyst worth his onions will share his signal at a give-away price. So if you don’t make enough profit to cover up the fees you pay, you may run at a loss monthly.
Laziness
Traders who are fortunate to use reliable signal services lack the motivation to improve their skills since they have access to winning trade information. In the advent that the service fails, they lose money and are unable to reverse their fortunes.
Conclusion
Trading with forex signals have their pros and cons, but if used properly, your fortunes as a trader may change for the better. Before you choose to use a forex signal service, make sure you research their record to ensure they deliver winning signals consistently before you subscribe to their platform.