Forex signals: Can they be trusted for trading currencies?
Michael Stark
Financial Content Leader at Exness
This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.
Share:
Even if you’re not familiar with CFDs, it’s likely that at some point you stumbled across videos and other online content about forex signals. Some self-proclaimed experienced forex traders might offer you these signals, either for a monthly fee or sometimes as “free signals” if you sign up for something using their affiliate link. But can you trust them?
You can also find forex trading signals on the MetaTrader platform or from forex signals providers on Telegram and other messaging services. This article outlines what signals are, some of the popular sources for them and why they should be used with caution, if at all. You don’t need forex signal services to trade forex or any other instrument, but in some cases they can be useful. Here, we also discuss alternative options to signals for forex pairs (EURUSD, GBPUSD, USDJPY, EURGBP, etc.) so that you can try and answer some of retail traders’ most common questions about them.
Advantages and challenges of trading currencies with signals
Just like any other tool, using a signal service or provider comes with advantages and disadvantages. It’s wise to be cautious when using forex signals. They’re not always 100% reliable. Therefore, perform technical analysis as well as fundamental analysis before making major trading decisions.
Advantages of forex signals
Trading currency pairs with signals can save you a lot of time. They can make it easier to find potential market opportunities, assess risk, and monitor trades – all of which can take many hours out of your week, especially if you’re a high-frequency trader.
Overall, signals are more reliable than randomly trading. They can also help reduce the emotional part of trading. If you strictly follow somebody else’s plan, there’s potentially less room for greed or other negative emotions to affect your trading performance.
Challenges of using signals
On the other hand, a plan offered by forex signal providers might not suit your risk tolerance. This is especially true of any forex signal, or other type of signal, that dictates the volume to be traded.
When forex signals fail, which they all will at some point, at least temporarily, you won’t understand why. Signals don’t explain why a certain position is being recommended, so you can’t analyze or correct any potential errors.
Doing your own research
Exness doesn’t offer signals because we believe that you should be responsible for your decisions. We encourage you to gain the knowledge needed to make the best choices for your circumstances. Using forex signals without question is like buying a car just because someone online suggested it; most people would do at least some research before making such a decision.
If you had any background in investing before you became interested in trading, it’s common sense not to blindly follow someone else’s advice. If you do decide to trade with signals, it’s always a good idea to understand why a position is recommended, whether it’s suitable for you, and what you could do if it doesn’t go as planned.
Alternatives to forex signals
Using signals in combination with your own research and analysis can be an effective trading strategy for you as a trader. However, you might also benefit from the alternatives to signals offered by Exness.
These alternatives might not be as easy and straightforward to apply for beginners. However, if you invest some time and effort into learning about trading, the alternatives might be a better fit for you. These alternatives explain the reasons behind trade ideas and actively track performance.
Exness’ weekly market outlook
Exness’ weekly market outlook is a video that comes out usually every Wednesday. This weekly YouTube video explains a possible idea for a specific trade, the fundamental rationale behind it, and what to watch out for if you decide to take that position. These videos are not forex signals but trade ideas which provide context.
The weekly market outlook provides a simple idea for forex trading, as well as for other markets, and offers the reasoning behind it.
Each week the presenter starts by analyzing the technical aspects and possible direction for an instrument. Then they explain why they think an idea is valid and highlight the key upcoming data and events that might change the situation.
We also provide a weekly review video of the previous week’s performance. You can use Exness’ market outlook for free and we encourage you to leave comments on our YouTube or Instagram videos.
Frequently asked questions
The simple answer is that it depends on the method used to generate a particular forex signal or group of signals. However, even when a certain provider has been consistently profitable in the past, it’s generally a terrible idea to rely blindly on signals. It’s important to do your own research and manage risk.
Remember, no signals are reliably accurate all the time. Another part of the problem with many signals is that they don’t consider your individual circumstances, including your balance, risk tolerance, or other factors.
For example, an active trader with a $200 balance might risk $10 on gold around the American job report for a potential profit of $30. However, if you’re a conservative trader with a $200,000 balance, you definitely wouldn’t risk $10,000 for a potential $30,000 gain under the same circumstances.
At Exness, we believe that the best signal for reaching your investment objectives is a knowledgeable, patient and calm trader with realistic expectations. You can become this kind of trader by being willing to learn, practicing frequently, and carefully evaluating your results. While you build your knowledge and experience, you can use automated or other forex signals with caution.
Generally, the best forex signals for currency pairs aren’t very specific. A trading signal that requires a certain volume is probably only suitable for a small number of forex traders. Every trader, including you, is different from other traders. The differences include psychology and personal financial situation as well as trading knowledge, trading strategies, balance, instruments traded, and different trading styles.
Yes, there are various options for free forex signals. You can use the preferences from Trading Central if you have a trading account with Exness. These are very close to the ‘traditional’ experience of using trading signals but also give you the option to trade either way based on your analysis of the news.
Exness also offers a number of alternatives to signals as described above: the weekly market outlook, the weekly report and the quarterly outlook. These have the potential advantage of being more detailed than typical trading signals with potentially more trading opportunities to evaluate and choose.
Using forex signals with caution
Like anything else in trading, there is no such thing as “best” forex signals. No trading signal should be trusted blindly without reference to anything else. Even if you’re using stereotypical ‘do this now’-type signals and they’ve been successful in the past, you should still check their validity.
If you’re a new trader, you can test the difference between using trading signals and using Exness’ alternatives on a demo trading account or Standard Cent account. Exness’ market outlook could be a great way for you to learn about correlations between financial markets, what drives currency pair prices and various other important factors, even if you don’t end up acting on the ideas.
You can find all the key information in one place with Exness’ market outlook and see which instrument might be most likely to move. Watch the outlook every week to see how its ideas perform and consider whether the latest idea is worth trying out.
Share:
Start trading
This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.