What are Forex Trading Signals? What is Forex? Forex stands for Foreign Exchange and it is the exchange of currencies globally.
For example, an individual would like to exchange U.
S.
dollars for Euros or the British Pound for Japanese Yen.
The worth of the individual currency goes up and down with the level of exchanges made.
So when a trade is made, the currency you bought or sold will go up or down.
When you choose to buy or sell is the most important key to profitability in a trade.
Therefore, a Trading Signal is some measure or point when a currency reaches that should trigger a buy or sell.
Let's look at this in greater detail.
Let's say that you are trading the currency pair of EUR/USD.
You have noticed that there is an uptrend in the Euro from a low of 1.
3507 to a high of 1.
3590 today and it looks to you that the Euro may continue to go up.
What would be the Forex Trading Signal in this scenario if the price is currently at 1.
3580? Well, you could set the Signal for a Buy at 1.
3582 if you think the Euro will continue to go up in value and take a profit at 1.
3595, based on the assumption that the Euro will continue to strengthen against the dollar.
The historical fact that the Euro has gone up, can be diagrammed by what is called a Trendline.
The trendline is a moving average can forecast what the price could be in the near future.
Once the price passes a certain threshold a Trading Signal can be triggered for a Buy or Sell.
Forex Trading signals can be generated by computer software that tracks the currency pairs and makes Trendlines in order to aid in the trade decision and establish Trading Signal Triggers for when to buy or sell.
There are many different software providers and they all attempt to predict what will happen with a currency so that a trader can profit more than they lose.
Most software uses all sorts of different mathematical models with complex algorithms in a attempt to predict future behavior.
How effective is it? Well, judging by the profitability of individuals who use it, I'd say the best algorithms are marginal at best.
While Forex Trading Signals can be generated by computer programs, there is a human component that I don't think can be mathematically attained.
Therefore, while Trading Signals can help, I don't believe in basing any trading decision wholly on them.
For example, an individual would like to exchange U.
S.
dollars for Euros or the British Pound for Japanese Yen.
The worth of the individual currency goes up and down with the level of exchanges made.
So when a trade is made, the currency you bought or sold will go up or down.
When you choose to buy or sell is the most important key to profitability in a trade.
Therefore, a Trading Signal is some measure or point when a currency reaches that should trigger a buy or sell.
Let's look at this in greater detail.
Let's say that you are trading the currency pair of EUR/USD.
You have noticed that there is an uptrend in the Euro from a low of 1.
3507 to a high of 1.
3590 today and it looks to you that the Euro may continue to go up.
What would be the Forex Trading Signal in this scenario if the price is currently at 1.
3580? Well, you could set the Signal for a Buy at 1.
3582 if you think the Euro will continue to go up in value and take a profit at 1.
3595, based on the assumption that the Euro will continue to strengthen against the dollar.
The historical fact that the Euro has gone up, can be diagrammed by what is called a Trendline.
The trendline is a moving average can forecast what the price could be in the near future.
Once the price passes a certain threshold a Trading Signal can be triggered for a Buy or Sell.
Forex Trading signals can be generated by computer software that tracks the currency pairs and makes Trendlines in order to aid in the trade decision and establish Trading Signal Triggers for when to buy or sell.
There are many different software providers and they all attempt to predict what will happen with a currency so that a trader can profit more than they lose.
Most software uses all sorts of different mathematical models with complex algorithms in a attempt to predict future behavior.
How effective is it? Well, judging by the profitability of individuals who use it, I'd say the best algorithms are marginal at best.
While Forex Trading Signals can be generated by computer programs, there is a human component that I don't think can be mathematically attained.
Therefore, while Trading Signals can help, I don't believe in basing any trading decision wholly on them.