One of the most important thing traders need to understand is a Forex signal. These are basically patterns or situations that alert traders to the specific trajectory of the market. By knowing exactly what would happen next, Forex traders will be able to position themselves to benefit from any profitable transaction that might happen to come by.
There are basically two types of Forex signals being used today.
Human or Manual Style
The manual style involves laying out charts like the line, candlestick and bar charts. During this old school process, practiced traders will be watching out for any signals present in the chart. Once these signals start to appear, the trader can make their move in the market. In some cases, the trader is also connected with several subscribers that rely on the original trader for their signals. Once them message has been sent to the subscribers, they can also position their holdings to ensure profit in the near future. One of the reasons why traders still use this method is because it allows them to have a more thorough analysis of the signals, therefore reducing the amount of risks for their part.
Forex Robot Style
Robots are getting incredibly popular nowadays, as more and more traders seem to rely on them for signals. Basically, these robots are applications directly installed to the computer of the trader. It uses complicated algorithm to identify patterns and consequently inform the trader of the situation. Again, the trader’s role is to react according to the Forex signal provided by the robot. What’s great about the robot is that there is no room for emotional ties or bias. The robot makes a computation and provides real data based on those numbers. Hence, the chances of risks are fairly low. In some cases, the robot doesn’t just provide signal alerts but can automatically initiate a trade when the signal occurs.
Manual versus Robot Forex signal
Both methods of ascertaining Foreign Exchange signals are equally effective, especially when handled by someone who is well versed in the trade. New traders however are advised to first understand the manual system before moving on to Forex robots if they so choose. This will allow them to thoroughly understand the process and eventually find out exactly how to manipulate the robot for profit. Typically, robots are best for individuals who are investing in Forex part-time while the manual-style is best for full-time traders.
When handled correctly, signals could help traders determine when the best entry point is and exit point for specific currencies. It would also show them when is stop loss point for any currency investments that is losing its value in the market.
Right now, obtaining a Forex signal is not as hard as it used to be. Many Forex-related industries are providing signal services for traders. Aside from simply installing a program, these signal providers can also send the data through a number of ways such as Tweets, SMS messages, emails and others. Note however that the method of data delivery is only second concern to the accuracy of the data sent.