Art and Science of Trading with Signals- How Important it is?


The term ‘trading signals’ covers a broad spectrum covering both stock market and Forex. Every investor wants to pick the best trading signals to reap profits. But before anything, let us explore what benefits traders gain using trading signals.

Trading signal benefits

Better trade results in shorter time are one of the greatest benefits of trading signals. While trading online people use standard trading sources as well as analytical programmes with help of technical indicators. Thus you can catch more prospective trades and grow your success.  

Electronic or digital trading platforms are powerful indicators that make your task of monitoring the market easier. These trading platforms send you signals over your phone, computer and tablet so that you can take the necessary actions immediately.

In other words Forex signals have a definite life time beyond which they lose their value.

An introduction to trading signals

A trading signal is just an alert that comes in your phone, mailbox or any other application. The signals tell you that is is time to either long or short a market. The signal is never executed automatically. Therefore, your option to analyse the market yourself still remains open.

Trading signals gives a well-defined edge

The signals alert you to unusual activities, volumes and options. Finding the real run from a genuine trader often turns out to be a challenging task. Rapidity of the decision is certainly one of the most significant advantages of a stock trading signal. Many traders get stuck with analysis and cannot decide when the best time to invest in a stock is.

Stock trading signals erase not only your hesitations but also emotions caused by trading stocks.

 Asymmetric information stands at the base of this signalling. It is a deviation from the perfect information.

Powerful signals send out the by the market

Forex signals provide you or any other trader with everything that a robot performs other than execution of trade entries. There are also professional traders generating trading signals to help clients. Basically these are unified information obtained from technical analysis tools like currency pairs. In short these signals are meant to help you make the correct decision and perform successful trade at the right nick of time.

But here is an important fact to take note of. Trading signals do not guarantee that you will make profit from your trade. The focus is to boost your chances of trade and that is exactly what you should expect from them.

However, innovation has no limits and thus you are free to mix other procedures of both technical and fundamental analysis with those signals to ensure best returns. If you doubt whether the signals then you must know they do. As it has already been mentioned above, these signals are basically alerts that are based on technical indicators to tell you whether the time is ripe to buy or sell a particular asset. If your signal provider feels the price of that specific asset will go higher or lower, he will get in touch with you over text message, e-mail or any other software application. You are at your liberty to follow or dump the signals of your provider.

Trade signals usually come in varying shapes including bear or bull pennants, wedges, triangles, rectangles and even head-to-shoulder cart patterns.

Trading signals catch attention

You get a signal when the system decides every rule for a new purchase signal is fitted and traders can place buy orders. Stock signals are also based on technical analysis.

In other words technical analysis means research on price action. Let us pick up an example now.

Suppose a company received a new buy signal sometime in April 2019. The signal was based on the fact that purchase recommendation signal for that particular stock appeared very profitable. With potential profit in a few months toughing 150% and above, it is certain that traders will follow this signal.

What you have to do to follow a signal? Ofcourse you have to buy the recommendations and buy or sell stocks.

Now let us explore another example. Suppose you get a signal that stock price of a certain company is likely to decrease in the next 6 months. Is it wise to hold that stock till the D-day? Ofcourse not and you have to sell those stocks as fast as you can to reduce the potential chances of a loss.

Analysts working at the Forex Trading Signals say this is how the trading market operates itself. It is important to pint here that you receive the trading signal only when all the criteria are fulfilled. In a volatile market the signals prove helpful pointing out opportunities. Moreover they also signal you in case the opportunities are likely to disappear.  

Many types of signal systems exist. It is possible to define the type of an FX signal by:

  • The functions it has and
  • The way it operates

Forex market permanently offers both manual and automated signals.