The Benefits Of Forex Trading Signals: The Complete Guide 2020

Last Updated on September 8, 2020 by Alphaex Capital


We agree that many people want to make their money work hard.

This can be achieved in numerous ways, savings accounts, investments, setting up a side business etc. You name it, Google it, and it can bring endless opportunities.

Here’s the thing:

The key problem with making (extra) money online is that simply searching for making money online could bring you to articles that promise of endless streams of money just by clicking a few buttons on your keyboard per day.

Internet marketing is very aggressive nowadays and very sophisticated, this leads to individuals with hopes to make an easy second very vulnerable.

Trust us, we have searched endlessly for our competitors and everyone’s marketing game is very exciting.

However:

It is not impossible to outperform the markets.

In fact, it is very possible.

On average, global markets have risen only 6% Year On Year. However, compounded that is an exceptional return!

If you had invested in a passive tracker on the S&P 500 you would have made 14118.67% in the last 67 years.

(Source: Yahoo Finance. Accurate as of 18/07/2017)

Of course – compounding is very important.

Here is the FUNDAMENTAL issue with trade:

If you are looking to take an income from trading, you will only harm yourself.

You need to be able to invest your profits and let them grow. Anyone telling you can make an income from trading is sadly not being 100% truthful.

This article is to serve you as a quick reference when you are looking into Forex Trading Signals.

Our aim here at Alphaex Capital is to provide a clean, honest, and professional service with n0 bullsh*t.

Did you know that real professional traders from investment banks only get it right 50-60% of the time? These are people who have been trained and work in some of the most intense arenas in the world.

You might be wondering:

What is the difference between you and them?

Nothing.

They are happy to let their winners run and their losers get cut. Simple, yes?

What Are Forex Trading Signals?

So… What are forex trading signals?

Trading signals come from a range of services. They can be asset-specific:

  • Stock Trading Signals
  • Forex Trading Signals
  • Gold Trading Signals
  • Binary Trading Signals (Avoid)
  • Bitcoin / Cryptocurrency Trading Signals

The list can go on…

They can cover different trading time frames, from intraday trading to monthly trades.

A trading signal is usually derived after certain price action or technical analysis has taken place or when there are abnormal volumes and short interests in stocks.

Now, here’s the deal:

A trading signal is not a recommendation or advice to buy or sell an asset.

It is, in fact, a simple order for you to copy and execute yourself.

At the end of the day, each trading signal that may be sent to you by your service provider it is entirely up to you to execute it yourself.

Unless your service provides an Expert Advisor or Copy Trading services.

The main issues that arise from Expert Advisor and Copy Trading solutions are that this could lead to overtrading, or churn and burn, as the Expert Advisor or Trader you have agreed to copy could make several transactions a day which would only cost you.

The best thing to do when you are looking for Forex Trading Signals, especially if you are do not understand what are forex trading signals, then it is time to grab a pen and paper and do some research.

Look into the way they market, if they have a free trial give it a go on a demo account. Do they harass you if you set up an account? What is the customer service like?

Be provocative, don’t just look at their social media following and images of flashy money and rented cars;

Or don’t go through a highly promising marketing campaign and expect 100% returns daily. Take your time to understand the provider and what they aim to deliver.

Look:

To be brutally honest, anyone saying they achieve a 90% or higher strike rate you should be skeptical about.  Our suggestion is to communicate with the provider your questions, put them on the spot and make sure you are happy with the product’s offering.

We have discussed what are forex trading signals, some pitfalls to look out for and what different types are available from service providers. It is important to look into the service in more detail and look at their offerings as well as understanding what are forex trading signals.

If anything, we hope that this helps you understand that trading signals are not a free-ride to riches. Sorry.

Why Use Forex Trading Signals In 2020?

So we have learned what are forex trading signals, so what are the benefits of forex trading signals in the first place?

Simple:

The benefits of using trading Signals is that they can help investors/traders find opportunities in the market where they may not be looking/researching.

It is important to understand that the reason why use trading signals are to help free up time or add additional trade ideas to your watch list. Trading signals can come in a range of ideas from intraday trading signals to monthly trading signals.

The beauty of using trading signals is that they can be generated at any time of day across a range of assets for you to view and either agree or disagree with based on your own research.

Just think of a trading signal as another string to your bow. Some people use trading signals as confirmation triggers with their own research. If you compile your research and a third-party provider has also confirmed your entry level then that adds confluence to your trading idea.

Others use trading signals as their only method of research, by choosing the right provider can be a suitable method. However, choosing the wrong provider can become costly. That is why it is important to do your research and be diligent in your searches.

Why should you use forex trading signals?

  1. Do you trade the markets and have some experience in doing so?
  2. Are you looking for a service to help filter out false positive trades?
  3. Are you looking to get support and help from professional traders who are providing the trading signals in real-time?

If you answered yes to any of the above then it would be a great idea to do some research to ensure you find and choose a reliable trading signals provider.

Why should you not use forex trading signals?

  1. Are you looking to get rich overnight?
  2. Are you looking for a second income that is guaranteed?
  3. Do you depend on the money you are investing to live on?
  4. Are you hoping that each trade wins 70% of the time or more?

If you answered yes to any of the above then we would suggest you look around or do more research and learn what are trading signals and how they can be used responsibly. You owe it to yourself and your hard earned money!

So to sum up, why use forex trading signals?

If you are looking to get a potential edge to the market, in addition to doing your own research, trading signal providers can add filters to your research.

Or

If you are looking for a professional service to generate trading signals in order to ascertain trading ideas in the marketplace. Just always be careful and ensure you do your own research on them. Your money will thank you later!

What Types of Forex Trading Signal Providers Are There In 2020?

There are different types of trading signal providers that are easily accessible through the internet.

The most common providers are forex trading signals who specialise in providing signals for different forex pairs such as EUR/USD, USD/JPY, GBP/USD.

Forex trading signal providers are usually short-term trade ideas aimed at ideas during the trading day, known as intraday trading.

The majority of the time these trading ideas are based off technical analysis and should only be taken as a short-term trade and avoided around key market announcements such as the non-farm payrolls which are a leading indicator on the labor markets in the US.

Look how volatile it is below:

Most respected trading signal providers will alert their traders to avoid opening positions around the NFP to avoid whipsaws in the market.

If you are looking for Forex trading signals to aid your trading then it is best to follow a provider that generates signals for the majors – where liquidity is high and a lot cheaper than exotic pairs.

You might be wondering:

What about binary options trading signals?

Binary Options Trading Signals are emerging in popularity due to the ease of access to these markets plus low initial investments.

That being said, you should only do so at your own risk (we do not recommend Binary Options).

Instead of investing in a global market with other participants, binary option traders are purely betting against a micro-market between other users at the same binary options broker.

Here’s the kicker:

In addition, the time frames are incredibly quick: 60 second, 5 minute, 15 minute binary options. IF you are interested in binary options then please make sure you do extensive research.

Next up:

Stock Trading Signal providers, or stock tip sheets, are limited due to the capacity of regulations.

You can find investment bank research that also offers a series of recommendation levels from a recommended sell to a recommended buy.

In addition, stock tip sheets are usually aimed at lower liquidity penny stocks, or “the next big thing” kind of stocks.

By no means does this suggest they are not out there, again these are very accessible through the internet. Stock trading signals are usually medium to long term, (3-12 months) due to the volatility of the markets and the average true range of the stocks.

Again, like forex trading signals – these should be used as either a confirmation or idea generating service and not be solely relied upon to invest in the markets.

Finally, there are some more specific types of trading signals that are based on strategies. One example is Pairs Trading Signals where the signal provider generates trading ideas based on standard deviations of two stocks in the same industry.

By reverting to the mean, would allow investors to trade the difference of a stock going back up towards their mean price and the other stock going back down towards their mean price.

Essentially, the stocks are overbought and oversold. This meant that the trade idea profited from 3 different outcomes and lose on one outcome:

Here’s the low-down:

Profit If:

If the long position outperformed short position

If the short position outperformed the long position

If the long position goes higher, the short position goes lower equally (perfect trade)

Loss if:

The long position continues to fall and the short position continues to rise.

Alphaex Capital Pairs Trading Example

This method of trading became popular by a group of computer scientists, mathematicians and physicists assembled by Wall Street’s Morgan Stanley & Co. in the early to mid-1980s.

So in conclusion, there are many different types of signal providers, it is important to understand what you want from your investing – whether it’s short-term trading using forex or longer term trading using stocks. You should do your own extra research and find what is comfortable for you.

If you are not happy about leveraging your money, then look at stock trading ideas where you will not leverage your position.

What are the benefits of forex trading signals?

Look:

Trading Signals are NOT guaranteed methods of making money only.

We cannot stress this enough!

Sadly, because the Forex Signal / Trading Idea sector is unregulated it is filled with 10,000s of internet marketers looking for the highest Cost Per Acquisition (Action) or Cost Per Lead and they entice their traffic into signing up promising guaranteed profit or a high percentage win rate from their Trading Signals that they give away for free.

Rule number one when it comes to investing in the markets, any assurances or words of certainty such as guarantee(d) etc. you should avoid. It is illegal to promote such assurances to the general public.

This isn’t limited to Trading Signal providers but on all times of investments (stockbrokers/institutions etc.).

Rule number two: you are not obliged to trade the trading signals. The main reason why trading signals and trading idea providers are not regulated is that the providers do not execute or manage client accounts.

You are the sole proprietor of your account and you are the only person who may execute the trades.

Now with that being said, here are the benefits of getting forex signals:

  1. They can be a cost-effective way of doing research. Most trading signal providers would like to educate their customers too by providing charts for visual representation.
  2. Treat them as your own micro-analysts so you can be your portfolio manager. In large institutions, a portfolio manager has several analysts under them to do all the leg work for new ideas.
  3. Monthly fees: these can vary from being free with an incentive (Freemium) or paid in cash via a subscription. The benefit of this is that you can subscribe for a small fee that would offset the costs of purchasing your own research tools and subscriptions to data outlets. E.g) Bloomberg Terminals cost circa $22,500 a year…
  4. Assets Traded: Trading Signal providers monitor a variety of assets from Forex to Commodities. This allows you to diversify across the board.
  5. Proven Trading Strategies: with a good track record, it is possible to piggyback off the trading signals provided in the prospect of making profitable trades. Although, past performance does not indicate future performance
  6. Actionable Trading Signals: You could receive daily, weekly, monthly trading signals that explain the trading signal from an analyst point of view – the entry-level – the exit level and the stop loss level.
  7. Similar to point 1 – you can have a conveyor belt of new trading ideas, so if you are out of ideas – the signal provider could invigorate you.
  8. Great for beginners to shadow a professional: people with very little experience can use their services to follow professional trading signals to pick up strategies and understand how the markets work.
  9. Risk: Reward is predetermined, encourages proper risk management. You receive all the info of the suspected trading signals to pull off the trade. However, you are in control of the execution and management of each trading signal on your account. If you move the stop loss or take profit levels, this is on your decision and you are effectively taking a gamble to avoid a loss or earn more from the trading signal.
  10. Solid strike rate: the average professional in the industry achieves a strike rate of 40% with the best reach of 50% strike rates.

Please remember my above rules for trading signals and also take note of this:

Trading Signals or Trading Ideas do not constitute investment advice and do not have regard to the specific needs of any person who may receive them. No warranty is given as to the accuracy or completeness of the information and any person acting on it does so entirely at their own risk.

Forex Trading Signal Software In 2020

Technology moves fast and so does trading signal software. We live in a world where software can be just as powerful using your browser as an executable file on your computer.

Many services provide an array of different ways clients can access their trading signals either online, through a mobile app or even through a third-party application such as MT4. We are going to investigate the different types of software and which is most suited to the average client.

Online Trading Signal Software In 2020

Online trading signal software can be a broad topic so let’s focus on the type that doesn’t require downloading. This type of software is out of the box and usually just means you can log in to your account online and access the trading signals. This type of software is the most versatile and ease of use.

Get this:

The beauty of this is that the software is always up to date and you can access the trading signals across all supported platforms. However, it can have some limitations such as providing notifications directly. This is usually compensated by the signal provider distributing alert e-mails to the clients. Now, with technology moving faster than ever, it is possible to distribute notifications via your online browser to update trading signals on demand.

Downloaded Trading Signal Software In 2020

Another form of trading signal software is by downloading it to your device. This can be achieved in three ways:

  • Smartphone App – downloading from an App store
  • Downloading the file onto your computer – from the signal provider’s website.
  • Via a Third-Party Download – trading signal software may be pre-bundled with the download such as MT4 software.

Alphaex Capital Metatrader 4 Devices

The advantages of downloading the trading signal software are that the signals are pushed directly to your device/computer which means you can react faster to the alert. That being said, a good signal provider should provide an optimal stop loss and take profit level for each signal which means that you can virtually set and forget each trade.

You should really only get 2 alerts: one to confirm entry, another to confirm the exit.

That being said, these downloaded applications will require updates and therefore require you to download them. Some software providers prevent signals from being accessed if the software is not up to date which could either cost you money or present an opportunity lost in the markets.

A majority of the trading signal providers provide an online trading signal service for this exact reason, to ensure all clients are on the same software and can access the signals easily.

Overall, it is the trading signal provider who dictates whether or not the trading signal software is either online-based or downloaded straight to your device. Both offer advantages.

Forex Trading Signals Scams In 2020

Now:

With everything in life, take services from signal providers with a pinch of salt.  Many signal providers will state that they have a 90% strike rate, which is exceedingly good.

So good that they consistently outperform the professionals. Did you know the average professional, industry recognised, traders at investment banks and institutions on average achieve a 50% strike rate?

Majority of the forex trader scams actually focus around bogus claims with maxing XXXX a day by trading Binary Options, don’t just take our word for it; check out this article from Forbes. It is also not just the binary trading signal providers that may scam you, even the platforms they trade on are known to mislead according to the U.S. Securities and Exchange Commission (SEC), you can read their account here Binary Options & Fraud article.

Essentially, the number one rule to finding or spotting a scam is if they are guaranteeing a return on your investment. It is possible to make money from the markets with trading signal providers but the most important thing to accept is that you will be risking your own capital at your own discretion. Trading signal providers will not force you to execute their trading ideas.

Another point to look out for is the lack of Risk Disclaimers. If there are no risk disclaimers or they are hidden away and hard to find this would suggest the signal provider is not aware of the law and their national regulators such as the Financial Conduct Authority (UK) or the Securities Exchange Commission (SEC).

The bottom line is that you have to ensure that you do your own thorough research and chat with the signal provider before handing over any money or agreeing to begin the service. As long as you, the individual, understand the risks and understand that trading signal providers only suggest trading ideas and do not enforce you, the individual, to execute them.

Hopefully, by reading this guide on the benefits of trading signals you will have a better understanding of how the benefits of trading signals can prove prosperous and how to find out which ones suit you. The most important factor for you (and us) is that you are 100% satisfied in the signal provider’s service, comfortable to use their service, and open to communicate your pre-sale or post-sale questions. Do not be afraid to ask questions.

If you are looking at trading signals and looking for a robust, affordable, professional service and that you are open-minded about using a trading signal service. Then we have collected a couple of partners that may be suitable for you.

SUMMARY

So:

We have gone over some of the most important benefits of trading signals and why using trading signals could potentially provide support to your trading toolbox. It is important that you do your own research and only focuses on what assets you want to trade.

If you want to focus on Forex Trading Signals, then don’t look for a provider who offers both Forex Trading Signals and Binary Options Trading Signals (Both are completely different, Forex = short to long-term trading.

Binary Options = ultra short-term trading (60 seconds to 1 day).

Make sure you practice a signal provider’s service on a demo account at first, this eliminates any chance of losing capital whilst trialling out the service.

This also allows you to validate yourself if the service is legitimate or a scam (especially if they barrage you with hard-sell e-mails after such as: “[insert name here] has made $12,298.86 in the last 3 days since joining” type of “case studies”.).

One of the most important disclaimers to look for is:

Trading spot foreign exchange and futures on margin carries a high level of risk and may not be suitable for all investors. You may lose all your capital. Loses can exceed deposits. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in spot foreign exchange or futures you should carefully consider your investment objectives, level of experience, and risk appetite. If you are in any doubt about investment or the mechanics of such products, you should seek independent financial advice.

The above disclaimer is ours, you can read our full risk warning, and it ensures it covers all the important regulatory points that each individual must understand. We have highlighted “Past performance is not indicative of future results” because this is important to understand too; a lot of signal providers will rely on false data or sketch past performances (only closing the winning trades and let the loses fall) to sell you their service.

By any means feel free to contact us if you have any inquiries regarding our services or trading signals in general – we will be happy to help. You may contact us here.

We hope you enjoyed this Benefits of Trading Signals: The Complete Guide 2019, feel free to write a comment below or discuss the article on social media with us. If you found this useful please share it on social media to help anyone else looking to learn more about trading signals before they take the plunge into a signal provider’s service.

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