Forex traders make decisions in a tremendous financial market whose fundamental forces are beyond any individual’s control. Nobody can affect the exchange rates, which are constantly in flux. What you can do is predict their direction using technical and fundamental analysis. Both systems require intense focus, knowledge, and sharp foresight. However, traders may also get clues. These suggestions are known as Forex trading signals, and they can be found for free.
This is another fascinating phenomenon, along with opportunities for trading without deposit. To put it simply, these Forex signals are tips that tell us when we should buy or sell our instruments. In theory, traders may use these suggestions instead of performing their own laborious research. But how reliable are they?
Accuracy May Vary
Some Forex trading signals are more accurate than others. This depends on the Forex signal provider you choose. The company assesses the market situation on your behalf using human or automated analysis.
In the first case, an experienced trader scrutinizes the market manually and presents their conclusions as Forex signals. For instance, they may deduce from technical analysis indicators that GBP/USD is overbought. They conclude that the market is about to turn bullish, and it is the best time for sellers to secure a high price.
Automated systems use a sophisticated algorithm. It scans countless scenarios every second across dozens of currency pairs. Once an opportunity is detected, the signal is forwarded to subscribers.
Components of Forex Signals
A Forex signal includes five essential metrics. It guarantees you have a sufficient range of data to act on with regard to personal risk tolerance. Here is how this may look:
- Pair: EUR/USD
- Order: Sell Order
- Entry: 1.2231
- Stop-Loss: 1.2271
- Take-Profit: 1.2131
Pair (Your Instrument)
This is the asset the signal pertains to (in this case, the Euro against the US dollar). Most free Forex signal providers limit their range to Major and Minor currency pairs, as these are the most liquid and therefore popular for trading. The combinations are fairly stable — unlikely to experience high volatility. Besides, most brokers provide tight spreads for these two categories.
Entry (When to Open)
This value is the recommended price for execution. Without it, any signal is useless. Some signal providers with free and premium subscription plans blackout the entry price. This is a trick designed to prompt traders to sign up.
Please note that users of Forex signals should only place limit orders. Market orders will not allow you to act on the suggestions, as they are executed instantly at the best available price. Limit orders can be executed at an exact price level recommended by the signal source.
Suppose the EUR/USD pair is currently valued at 1.2221, and the signal suggests setting entry at 1.2231. If you act on this clue, execution will be triggered once the price hits this target. Until then, the order has a pending status.
If the price is not reached, the order may be terminated. Cancellation is a common case, partly because not all sources of Forex trading signals are trustworthy. Reliable companies make sure entry conditions are favorable.
Stop-Loss (Protect Your Balance)
This element is vital for any risk-conscious trader, which means anyone who is serious about Forex trading. A feature of popular trading systems, it allows you to exit a trade automatically if the predetermined price is reached. It essentially cuts your losses.
Suppose you have set your entry at 1.2231 for EUR/USD based on the abovementioned signal. You have opened a short position, as you expect the price to drop. Unexpectedly, the market changes direction, and it begins to rise.
This is contrary to your prediction. Now, every pip a pair gains your potential profits. Meanwhile, if the stop-loss order is set at 1.2271, execution will inevitably be triggered when this price is reached.
Therefore, Stop Loss is your best protection against excessive risk. You will never lose more than you can accept. Remember that the market is beyond your control. It is driven by multiple factors, and present trends may reverse at any moment.
Take Profit (Secure Gains)
Like Stop Loss, setting Take Profit allows you to have the order executed automatically at a particular price. However, rather than hedging losses, it allows you to secure profits. The logic is the same — you set a desirable value and wait for the market to reach it.
Importantly, the Forex trading signal may contain not one, but two alternative Take-Profit suggestions. For instance, for EUR/USD, these may be:
- Take Profit 1: 1.2131
- Take Profit 2: 1.2101
As you can see, the difference between the two clues is 30 pips. Why is this necessary? Traders have an opportunity to define the target with regard to their risk-to-reward ratio. For sellers, the conservative Take Profit option is the first one. Their peers who are willing to take higher risks for the sake of large margins would opt for the second suggestion.
How Do Forex Signals Work?
You may wonder where signal providers get their data. It may come from humans or automated systems. The analysis is the hardest part of Forex for beginners, so many traders are interested in getting prompts. Signals are rarely generated by humans, this is labor-intensive and accuracy may suffer. A handful of companies have seasoned traders with a wealth of experience. You can read more about trading strategies in our article.
These experts research the markets manually using fundamental and technical analysis. Once they spot a promising opportunity, they share this knowledge with subscribers. Naturally, it is much easier for a company to task an algorithm with the same job.
Algorithms use technical indicators. The technology may be based on some kind of AI, machine learning, or both. Automated systems have an edge for several reasons listed below.
- An ability to analyze an unlimited number of Forex trading pairs concurrently.
- An ability to perform analysis 24/7 (mental fatigue or exhaustion are irrelevant).
- The rational analysis is made on predefined conditions only. Automated systems do not experience emotions, so their suggestions are more reliable than tips from humans.
- Responsible signal providers keep improving their signal generators all the time. This means their systems stay ahead of the curve in this colossal changeable market.
Free Forex Signals Vs. Paid Signals
Who wouldn’t like to get accurate Forex signals for free? Few companies share their insights free of charge — after all, their advice can help you make real money. In many cases, there is a free plan and a premium package.
TOP 10 Free Forex Signals Providers
Members who do not pay have access to a very limited number of free Forex signals per week. However, offers may vary. Here are the most noteworthy providers of free and low-cost services.
This US-based broker provides free access to the tools of the Advanced Trading Platform, including free Forex signals like Pivot Points for entry and exit. The company’s proprietary feature called Autochartist scans the market for trade opportunities that may serve as Forex signals and performs technical analysis to make a forecast. The brand’s Recognia technical analysis portal is also free. It facilitates planning.
This is a colossal community made up of thousands of traders. The famous platform is highly rated thanks to its attractive features. First, users may connect to mentors with decades of collective experience. Secondly, it gives access to hundreds of instructional videos and private one-on-ones with experts. Go to ForexSignals
This platform has a long history of providing high-quality free Forex signals. The clues are based on independently verified historical data. They have shown impressive performance in challenging conditions.
The company is highly rated by users and experts. It has strong confidence in the accuracy of its data, and the sentiment is shared by its following. Members may also improve their Forex trading skills thanks to one-to-one support from the company’s star, Bob James.
4. Daily Forex
This signal provider’s website is visited by over half a million traders every month. There, you can get fresh daily Forex signals for Bitcoin and all Majors. There is a dedicated page for every instrument. It features its risk score, recommended trading times, and Forex signals with instructions for bulls and bears, including optimal entry, exit, and Stop Loss.
5. Forex Signals Factory
Visit the site for signals that are accurate and absolutely free. The company boasts a wide social media following. It delivers 15 Forex signals daily in all Majors and other instruments. On average, it provides 66 signals with a 76% success rate monthly. Additionally, there are weekly and monthly Forex signals, along with forecasts (both technical and fundamental).
6. Forex Peace Army
This company is primarily known for its Forex reviews. However, it also provides some signals and services that are absolutely free. The website has a forum layout, and a fresh post with clues appears daily. It tells traders how to act on a particular piece of news. All tradeable news events are also summarized in a special weekly post.
First and foremost, this is an educational platform. It offers excellent signal service based on AI and machine learning. All Majors are covered, including the best entry, Stop Loss and Take Profit values.
The company takes pride in its transparency. Users can see how each signal was generated (e.g., using Fibonacci retracement, support, and resistance, etc.). The algorithm does a great research job. The free plan includes three signals weekly. Premium users receive as many as five daily signals via Telegram.
MQL5 is the name of the programming language used by MetaQuotes Software Corp. This company’s page is one of the primary sources of information for traders who use MetaTrader 4 or 5. It features a lengthy list of signal providers — other retail traders who may be copied via the terminals.
A downside is that signals can be suggested by almost anyone. However, the performance of every contributor is assessed and rated in terms of ROI. You can also check how often they trade and their highest drawdown (deepest fall after a peak before recovery).
Every registered customer of Forex GDP can get up to four signals monthly as part of a free subscription. The generated profits usually fall between the 90-150 pip range.
Free clues include recommended entry and exit. These are sent via WhatsApp. Additional features require a paid subscription that is reasonably priced ($49 – $84 per month). Premium members get between 8 and 12 signals with a profit of 300-700 pips.
Owned and run by Joel Kruger, a famous industry veteran, the platform is suitable for rookies and experts. Its conclusions are based on technical analysis, fundamental analysis, and four other related disciplines, including trader psychology. Each element is covered daily by means of video presentation or text.
The service is not free, but it is a bargain! The most advanced plan gives access to five reports (technical and fundamental) and one or more Market Movers Reports weekly, along with 10 Daily Bank Reports and three Trade Finder Dashboards. For 45$ a month, you get VIP customer service, personal journal history, and alerts for instant trades.
Semi-Automated or Fully-Automated?
Before committing to a signal provider, decide if you need fully automated or semi-automated suggestions. The latter ones are the most common. But why does this matter?
Semi-automated systems provide the clues, but you need to place the trades yourself, setting all the necessary parameters. In comparison, fully automated ones connect to your chosen Forex trading platform. They initiate positions on your behalf.
In general, it is preferable to maintain at least some degree of control, so go for the half-automated solutions. This way, you will still be able to personally evaluate every signal. You can decide whether to act on it or not. Make sure you are well-informed, stay tuned with updates posted by brokers, and check out TOP Youtube channels along with keeping track of Forex signals. Indonesian traders often use trading signals in Forex trading
Trading signals are suitable for all investors. Protect your trading account against excessive loss and leverage the power of algorithms to increase profit. Today, it is possible to find accurate signals that are also free!