Are Free Forex Signals Reliable?
A very popular topic concerning the foreign currency exchange market is that of forex trading signals.
Today, we want to specifically talk about forex trading signal systems, their application in the forex trading market and where traders can get them for free.
We will also talk about whether or not traders should use forex signals.
Let’s get it started!
Forex trading is not a scheme to get rich overnight; it’s not an easy thing to do and you definitely shouldn’t take it lightly if you want to succeed.
To become an efficient forex trader, you have to dedicate time and effort to learn how to be one. A forex trading education is an absolute must if you want to succeed in the challenging, yet highly rewarding world of forex trading.
It’s only natural to want to be able to achieve great trading results with as little effort as possible. In the world of forex trading this way of thinking might bring you financial losses. However, there are ways that can certainly assist you in making decisions, such as when and what currency pair to buy/sell. One of those ways is through forex trading signals.
In fact, one of the first things beginner traders google when they complete their initial forex trading education and open an account is “free forex trading signals daily”.
Everyone wants to achieve huge profits as quickly and as effortlessly as possible, relying on someone else’s thoughts and opinions. That’s why forex trading signals have become so widely used among traders.
The majority of novice traders are a bit reluctant to pay for premium signals and secretly hope to win a lot of money without any expenditure. It’s important to understand though that just like with every other service, good and 100% free services are hard to come by.
Let’s talk more in detail about free trading signals and where to get them for free.
What are forex trading signals?
A forex signal is basically a short suggestion message, containing information that can help you make better trading decisions. Such information can contain a suggestion for entering a trade on a currency pair with specific time and price.
The trading signals are usually sent via emails, SMS, tweet or another type of immediate communication, depending on what the trader chooses.
The main reason why many traders use forex trading signals is to save time. Sitting in front of the computer for hours and analysing the market before deciding to enter a trade can be a bit time-consuming. Therefore, for the busier traders, especially those who already have a full-time job, using trading signals might be a good solution.
Another reason why trading signals are popular among the trading community is diversification. Traders can pick from a variety of signals providers and expand their portfolio with various methods, instruments and timeframes.
Types of signals:
The signals are usually generated either by an expert trader analyst or they can come from an automated forex “robot” if subscribed to an online forex trading signal service.
Forex trading signals that come from expert analysts are based on their assessment of the market in a way that computer software cannot analyse. Experts possess a certain level of skill, experience, emotional intelligence, etc. and are not just limited to codes and pre-programmed settings, like automated systems. Expert traders have experience and they can get a feeling of whether certain trades will bring profits or not.
The automated forex trading signals have a lot of benefits as well. In addition to saving time (you don’t need to spend days building your own trading strategy and monitoring different markets), forex trading signals can “expand” your risks. What we mean by that is you can select several forex strategy providers so that your outcome doesn’t rely on one strategy in particular. You also maintain full control over your account, meaning that you don’t have to give power of attorney to anyone. The human psychological stress involved in the process of trading is completely excluded; the software draws meaningful conclusions and performs based on the way it has been programmed.
What does a forex trading signal look like?
Well, as we said it’s a very short message that contains only the most essential components and it looks like this:
- BUY EUR/USD @ 1.1230
- SL @ 1.1210, TP @ 1.1260
The signals usually begin with the direction of the order. It can be either buy (long) or sell (short). Then, traders will see the trading instrument which will either take the form of the currency symbol (in our case EUR/USD) or sometimes it might be the currency nickname, such as Aussie for example. All this is followed by the price quotation, which is shown in five or four digits after the dot.
In some cases, forex trading signals can also include a type of order, which can either be a market order (MO), a pending order (PO) or a limit order (LO). Depending on the broker’s platform or the person/company that is providing you with the forex signals.
What are some of the typical features offered by (free) forex trading signal providers?
- Showcase the exact (or approximate) entry/exit/stop loss figures for one or more currency pairs.
- Supporting graphs or additional analysis for the provided signals.
- Trading history: pips profit/loss per month, risk/reward ratio, actual trades.
- Interaction with the signal provider and one-to-one coaching if requested.
- Educational materials.
- A free and usually one month trial period.
Are free forex signals reliable?
Let’s get to the point - Are forex signals truly reliable and should traders use them?
Ultimately, forex trading signals operate on a mathematical formula and when certain parameters are met, a trader will receive an email or an SMS on their phone. It’s entirely up to the trader to decide whether or not to take the signal.
One quick search on the Internet will show you that there are indeed a lot of mixed reviews of free forex trading signals and providers. Some traders have had bad experiences and some are satisfied with the results. However, that’s not news when it comes to service providers.
You can’t expect good results from everyone. That’s why you have to do your own research before you subscribe to a free trading service provider or to an independent forex signals provider. There’s plenty of information online to help you make your final decision. Review sites and social media portray a pretty good picture of what’s going on.
Don’t be afraid to ask for additional information from the free forex signals provider or ask more experienced traders for advice. Nowadays, due to the constant flow of information, it’s quite easy to discover if a provider is untruthful or useless and naturally, avoid it.
Spend a significant amount of time to do your own research and try out different service providers.
How to know if a free forex signals provider is a scam?
Here are just a few red flags to watch out for:
- No trial period. All forex signals providers should offer at least one month trial period before committing.
- Anonymity. An anonymous company requiring a wire transfer is basically a big “no.” Check if they keep their information public or not.
- Hiding their trading history or if their trading signal is not matching the trading history on the website.
- Inadequate customer service. A forex signals provider (whether it’s free or not) should be able to assist traders with all kinds of information at any time.
Ultimately, most of the systems work. Sometimes, it’s the individual trader that fails to follow the system.
Yes, you are not the one who decides when it’s the best time to buy or sell, your emotions can still get in the way.
If you can weed out losing signals, you can identify the overall trade. If you are able to identify the overall trend and weed out some of the losing signals, you can indeed be successful. Don’t let emotions get in the way and losing streaks kill your motivation. Test the different software and see which ones work for you and which ones don't.
There are reliable forex signals providers but one thing you have to always keep in mind is that forex trading is an art. You should keep learning and mastering it. It takes hard work and dedication. Even if you subscribe to the best free forex trading signals service, you have to keep learning how to trade and not just sit back, relax and wait for the money to start pouring.
Over the short-term, forex trading signals can be a good solution. Your long-term success, however, can be a bit questionable.
Novice traders prefer using forex trading signals because that gives them extra time and trading capital to invest in their education.
Here are some important things to keep in mind about free forex trading signals and their reliability:
- There’s nothing wrong with using free forex signal providers. Many traders use them on a daily basis due to lack of time.
- When seeking out a reliable free forex trading signals source, make sure they have a proven track record.
- Don’t trust professional traders or companies that promise you great results without proof. Your free signals provider should not be afraid to show their history.
- Some systems offer a trial period, allowing you to test it before committing. Consider it before paying for the full service.
- If you are looking for paid options, the prices of forex trading signals range from $15 to $500 per month, depending on the quality of the signals you will get.
- Most novice traders prefer to find a professional forex trader or a small company that provide free forex trading signals because managing a small group of people might be more beneficial to them.
- Take some time to learn how the forex market operates and reacts to news, events and other factors that might affect your trading profits.
- It’s not advisable to rely solely on them as your main source for your trading information and guidance.
- Many traders employ signals in their trading strategy and use them as a secondary tool to enhance their chances of success.
- It’s quite possible to find good forex trading signals for free, however, you should approach them with caution. Not every signal provider, whether automated or not, is out there to help you succeed and make money.
Are free forex signals reliable?
Yes, they are. There are profitable ones and there are companies out there who don’t want to scam you and are sincerely devoted to creating a service that will assist future traders.
Spend some time to sort out the 80% of the scammers and spammers, to check out their performance histories, platforms, reviews, customer service, etc. and you will find profitable free forex signal providers.