FOREX trading has some shortcomings; one is the fact that you have to spend a great deal of time scrutinizing the market. Indeed, you may have to spend many hours at your PC, keeping your eyes peeled for entrance and exit situations that will be helpful in your overall investment strategy.
It is possible to utilize automated orders. Limits and stops prevent eye strain by letting you have some time away from your monitor, secure that any potential for loss is minimal. However, you can also lose out on prospective gains, if such orders, in your absence, take effect sooner than you'd like.
To minimize the risk of automated orders, and yet still get away from your desk, a FOREX signal service may be helpful. Someone else does the market watching and analyzing for you, and the results are sent to you directly, by email, cell phone, pager, etc. Such services aren't free; usually a monthly or annual subscription is required. However, some brokerages have integrated such services into Forex trading software which sends signals to you by screen "pop-up" messages, or by the other direct methods already mentioned.
FOREX signals are usually only to be had in a restricted quantity of currency pairings. Most frequently, one of the following will be offered: EUR/USD, USD/JPY, GBP/USD, or USD/CHF. However, other such duos may be offered by certain specialty services.
A high level of technical market analysis is generally required for FOREX signal creation. Most services utilize a mix of indicators to recognize primary trends and entrance/exit signifiers. Subscribers are then given the option of exercising or foregoing a trade based on the results; some companies may even give you the ability to place trade orders that can be exercised by an analyst without consultation with you, to give you even more freedom from having to monitor the markets - or even the signals - yourself.
A variety of signals are possible as the results of the analysis of currency charts. A Simple Moving Average (SMA) signals to buy if the price for the specified currency moves higher than the line indicating the average price, or to sell if the price goes below the line.
A Moving Average Convergence Divergence (MACD) study also has a signal line where "buy" is indicated if the price goes above, or "sell" if the price goes below, the line.
Market interest may be found using indicators of volume. Especially near the market low, high volume tends to signal that a new trend is beginning. Conversely, low volume may signal that investors are unsure of the wisdom of purchase at this time. The possibility of market change may be signaled by a variety of different indicators.
The utility of such signals can be reinforced with a mixture of additional indicators from a variety of sources. Such a combination provides insight into market behavior that can be fairly dependable. Of course, nothing is 100% certain - if such signals were absolutely reliable, we'd all be rich. No respectable service will ever guarantee absolute success. However, a particular service's result history can be a good indicator of whether or not you can rely on their currency trading advice being useful to you in the future.
Subscription services that provide such data typically cost between $50 and $200 per month. You may find that the cost outweighs the benefits, or you might find that your profits make the information worth the price. Such data can never take the place of true knowledge, however; signals are simply a form of guidance. If you lack the basic tools to use the information provided, such a service will probably be useless to you until you can obtain some additional training.
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