Published: 22 July 2020 by Andrew
What are Trading Signals? They are indications of market situations that may suggest winning operations to traders. There are various types of signals. To give a trivial example, for those who do technical analysis the achievement of a maximum or a minimum can be the signal for short selling or buying.
Most beginner traders are unable to do technical analysis themselves and therefore need someone to provide them with the right trading signals at the right time.
Working with trading signals is a great idea, at least in theory. In practice, most of the trading signal services available on the market are not reliable at all and therefore could cause you to lose money. In addition, in many cases these signal services are paid and therefore to the damage of losing money with trading is also added to bad luck!
Free and Reliable Trading Signals
Let’s start our practical guide immediately by talking about one of the best trading signals services, the one offered by the ForexTB broker to all its members.
It is a service that has shown, over time, a really high level of reliability. Usually services with such accurate predictions have a high cost but ForexTB offers the signals for free to all its subscribers.You can request ForexTB signals for free by clicking here
ForexTB is one of the best European CFD trading brokers. It is a safe, reliable and very simple trading platform to use, even for beginners.
It is characterized by its truly exceptional phone assistance: all members have the right to be assisted on the phone by a real trading expert who provides valuable advice and indications.
ForexTB signals are highly valued for their reliability. Beginner traders also greatly appreciate the possibility of downloading a great ebook for free which explains, step by step, all the secrets of online trading.
This ebook has had a resounding success in Europe (hundreds of thousands of copies already downloaded) because it is very easy to study, even for those who don’t know anything about trading. It is also practically oriented (it explains how to make money with trading) and does not waste time with theory: you can download the ForexTB ebook for free by clicking here.
ForexTB is a free and commission free broker. It also provides an unlimited and unrestricted demo account for all members. If you want to know more about this broker, you can read our full review on ForexTB here.You can sign up for free on ForexTB by clicking here.
What does the word “Reliable” mean?
It is very important to make a clarification: the reliable signals are not those that guarantee 100% of transactions that close in profit. Unfortunately, there is no such service in the world, it is impossible.
Financial markets are unpredictable and nobody is able to make correct predictions in 100% of cases. Even the best trading signal service, therefore, could give wrong signals. It is not a problem: the important thing is that the number of good signals (which lead to operations that close in profit) is greater than the number of those that lead to operations that close without profit.
Scam Trading Signals
Be very careful: many scammers offer trading signals services (usually for a fee) promising reliability in 100% of the transactions. In practice, these characters are selling (at a high price) a method of making easy money.
When looking for trading signals on the internet you must always be careful, very careful. The promise of easy earnings can lead some naive beginners to fall into the trap of these scammers.
We can define them as fake gurus who promise 100% reliable trading signals in exchange for a payment.
These overwhelming gurus are not trading experts (in fact, they probably never traded in their entire life) but they are very good at marketing, in the worst sense. Very often they also falsify the historian of their signal service in order to show high gains in the past (which in reality have never been there).
Falling into the trap is dangerous: not only because you spend money to buy something that does not work, but also because those who follow these trading signals do it ends up losing money. Paradoxically, it is positive that many of these services never send even a signal to their subscribers: in this way at least they do not make you lose money with completely wrong market operations.
It is therefore advisable to analyze carefully the reviews of a trading signals service before starting to use it. For example, the ForexTB signals enjoy an extremely positive reputation (and what’s more, they are also free).
Telegram Trading Signals
In recent times has spread the method to look for trading signals on Telegram. In this case only the medium in which the signals are distributed changes, not the substance. Most paid signs hide scams and don’t work.
The use of Telegram serves above all to protect the privacy of those who sell the signals and therefore to protect them from any actions of the judiciary and regulatory bodies.
Traders, on the contrary, should prefer signal providers that operate transparently, following the regulations that serve above all to protect their money rather than venture into the no-man’s land represented by Telegram.
YouTube Trading Signals
Youtube is apparently the opposite of Telegram, given that the videos are published online and are therefore publicly available. The videos published on Youtube, in any case, contain rather vague trading signals and of no practical use.
Usually the owners of these Youtube channels use publicly available videos to capture attention and then offer paid services, with more precise signals.
In practice in this case Youtube is not the method for distributing the signals but it is only a form of marketing. In fact, the quality of the distributed signals can also be very low in this case.
CFD Trading Signals
The best signals currently available are those distributed by the ForexTB broker. It is one of the best CFD brokers in Europe.
Why is it convenient to trade with CFDs? CFD stands for contracts for difference, these are financial contracts that offer various advantages to traders:
- Easy to use
- Commission FREE
- Can be used with leverage
- Start trading with small investments
All these advantages make CFDs the best tool to invest in the financial markets, especially when you have a small capital available.
The fact of directly offering CFD signals therefore represents an additional strength for the service offered by the ForexTB broker.
Trading Signals or Automated Trading?
Trading signals should not be confused with automated trading. In the case of automated trading, in fact, the trader does not have to do absolutely anything and the operations on the market are performed directly by the broker through various mechanisms.
There is the possibility of using trading robots, i.e. algorithms developed in a specific programming language, for example MQL4 for Metatrader 4.
Or there is the possibility of using Copytrading systems such as the one developed by the eToro broker that allows you to automatically copy the best traders. In this case all the trader has to do is select the best traders, the Copytrading software will take care of replicating, in real time, all the operations done by these traders.
Indeed the eToro system is one of the few automatic trading systems that really work, even for beginners. You can sign up for eToro by clicking here.
The difference between automated trading and trading signals is clear: in the case of signals, the trader receives an indication of a market situation. He has the responsibility to decide whether to follow the indication or not, by placing an order on a broker. In the case of automated trading, the system automatically carries out the operations, without the need for constant intervention by the trader.
In any case, even when trading automatically, the trader is responsible for the operations performed. In the case of eToro, for example, it must still choose the traders to copy and must check, day after day, that these traders are producing profits.
Learn Online Trading
Very often the use of trading signals is misunderstood as a way to make easy money when you have a still low level of experience and knowledge. They can actually lead to some profit (if you have the intelligence to choose reliable trading signals) but it is probably not the best way to use the signals.
We must never forget that following a good trading signals service is an excellent trading school: a way to learn online trading by observing concrete situations in detail.
We can say the same thing about eToro automatic trading: many beginner traders use it for educational purposes, to learn online trading by observing live what the best traders in the world are doing.
Technical Trading Signals
As we said from the beginning, it is possible to obtain trading signals also manually and this is made possible thanks to the tools of technical analysis.
Of course this is not a simple discipline easy for everyone. In reality, although anyone who can learn to do technical analysis it is undeniable that this takes some time to be assimilated in the best way and exploited properly.
Some trading experts claim that it takes as long as 5 years to master this which is considered by many to be a real art. In our opinion this is not exactly the case. Let’s explain it better.
It is true that technical analysis is a very vast field, but it is also true that it is not necessary to learn all the technical analysis to be able to trade successfully obtaining valid and effective trading signals from time to time on the markets.
In most cases it is enough to learn some basic indicators, even just 2 or 3 to be able to obtain results by using them extensively for your market operations.
But how exactly does technical analysis work?
Trading Signals with Technical Analysis
The technical analysis allows you to make forecasts on Forex or other financial markets thanks to the study of past data relating to the price.
In practice, we go to study the past to have the opportunity to understand the present and to predict, at least in part, what will happen in the future, on a certain financial market, be it that of a cryptocurrency or that of a pair of Forex currencies
Of course, one should not delude oneself that in the field of trading it is really possible to “predict the future”. All that can be obtained is an excellent approximation of the direction that the price could take.
The important thing is that your forecasts are true in most cases, so in the long run your investment portfolio should certainly have a positive trend.
Where do the signals come from?
Here, as we said, the technical analysis is useful as it is capable of generating trading signals in favor of the trader, or is able to indicate the exact moment in which it is convenient to enter the market and with what type of position it is necessary to do so.
Not only that, because technical analysis through its technical indicators can also say much more. For example, it is able to suggest when a certain market is running out of trend and showing signs of reversal.
Such data also helps to understand when it is necessary to exit the market, in case a position has been opened on the previous current trend. But there are many other data available thanks to technical analysis such as:
- Market volatility
- Convergence and divergence of prices
- Market contraction and expansion
- Participation volumes
- Price trend
In short, you can get a lot of information that ultimately contribute to improving your investment results. Learning technical analysis, therefore, is very very useful, but if you want to start earning immediately, it is better to rely on the solutions proposed above.
Example of signals with Moving Average
Here, now let’s go into more detail to talk about technical trading signals that can derive from the simplest indicator ever, namely the moving average.
Briefly explaining the moving average, we can say that it is a curved line that can be viewed directly on your price graph.
Its form depends on the past of the asset price you are analyzing and it follows the market trend by purifying it from the so-called “background” noise, which prevents traders from understanding exactly what is going on.
Let’s see an image of the moving average to understand what it consists of and an example of its many technical trading signals.
In this image you can see 3 clear bearish signals that were generated by the price and the moving average directly. All clearly legible and easily interpretable.
The image is taken from the graph of Eur / Usd (euro / dollar) Forex exchange, the famous currency pair where it is convenient to invest due to its volatility.
Here, the trading signals present here are even 3. The moving average is represented here in green, while the price is in the form of red and green candles, or the classic Japanese candles.
Whenever the price exceeds the moving average from top to bottom with its red candle, the bearish signal is generated and in fact, as you can see, the signal occurs.
The price actually drops for a certain period of time decreeing the strengthening of the euro over the dollar. But when does such an operation make money?
When a Short, (sell) operation was opened, when one of the 3 signals was generated, then a capital gain would have occurred.
Let’s say you’re on the euro dollar chart and follow the moving average. The first valid trading signal (and also the best in the image analyzed here) occurs when another red candle is formed immediately after the first that has exceeded the moving average.
Here, this is the classic trading signal confirmed by the birth of a new bearish trend that in reality never stops. Similar signals can also be obtained with other indicators such as hichimoku.
In fact, on this graph it is also possible to draw a bearish trend line, that is a trend line that clarifies how a downward trend has actually been triggered to be exploited with an investment of “sale” with CFDs.
Here is a case study that features 2 trading indicators together which confirm the bearish signal: the price rebounds on the bearish trend line 3 times confirming that the trend is very strong, and could last also because the trend line is not very steep.
This is a clear case in which when doing market analysis with very simple technical analysis tools it is possible to obtain reliable trading signals. The experience then does its part by indicating to the trader when it really is appropriate to enter the market.
Learning to use moving averages and trend lines in any case is not very difficult and with a little practice it is possible to make many successful traders using these tools to obtain confirmed and reliable trading signals.
Trading signals can be a great way to make positive transactions on the market, but you must be very careful not to fall into the traps of unscrupulous scammers who sell signals that do not work.
The best trading signals service available today is the one offered by ForexTB (click here to request free signals).
An excellent alternative to trading signals is represented by eToro Copytrading: in this case it is possible to select the best traders and automatically copy all their trades.
Both the trading signals and Copytrading, in any case, can be used profitably for educational purposes, to improve the knowledge of trading.
It depends on the supplier. The Signals offered by ForexTB, for example, have an excellent 75% success. At the moment, they are the best in Europe and are free.
The general operation is to receive a real-time notification of when and how to enter the market. A sort of real-time assistant to operate at its best.
It depends on the company that offers them. Some are paid (even thousands of euros per month), others are totally free like those ofForexTB.
There will never be certainty of profit, the important thing is to choose suppliers with a high percentage of realization. For example, ForexTB has an excellent 75% (according to the latest data) of signals then gone to Target.