How to Find and Use Free Forex Signals
Forex trading signals can be a useful tool to help both beginners and experienced traders identify opportunities within the Foreign Exchange market. But what are they? And where can they be found?
In this article, we will take a look at the concept of free Forex signals in detail, analyse their advantages and disadvantages, and look at where to find them.
The information in this article is provided for educational purposes only and does not constitute financial advice. Consult a financial advisor before making investment decisions.
What Are Forex Signals?
Forex signals identify and alert traders to potential trading opportunities within the Forex market when certain criteria are met. These signals will typically suggest for traders to either buy or sell a currency pair and may also provide a price target and a stop loss level.
Upon receiving the signals, traders can decide whether or not to act on their suggestions. Rather than simply following them, traders may also use them as a prompt to conduct their own research or to help decide what to do with any open positions they may have.
Free Forex signals, as the name suggests, can be obtained by traders without payment, unlike paid services which will typically require either a one-off payment or a regular subscription.
Advantages and Disadvantages of Trading Signals
Whilst these signals can be a helpful resource for traders, they are also associated with a number of risks. Here is a summary of some of their advantages and disadvantages.
Advantages
- Time Efficiency: Forex signals allow traders to receive alerts about trading opportunities without having to constantly monitor the markets which, given the round the clock nature of the Forex market, is not feasible.
- Educational: They can help beginner traders learn more about different methods of analysis and how to use this analysis to make trading decisions. They might also help beginner traders to get hands-on trading experience whilst learning.
- Reduce Emotional Trading: Forex signals are typically generated based on predetermined criteria. Consequently, basing trades on these signals can help remove emotion from the decision-making process.
Disadvantages
- Risk: Trading is inherently risky and using Forex signals does not make it any less so.
- Reliability: The main potential drawback of using trading signals is that they won’t always be reliable. Even the most well-reasoned analysis by highly experienced traders won’t yield results every time.
- Over Reliance: Becoming over reliant on trading signals may impede beginner traders from learning and developing their own skills in trading and analysis.
- Trustworthiness: Signal providers may exaggerate their past success rate when advertising their services
Where to Find Free Forex Signals
For those who are interested in using Forex signals, there are many different options and providers to choose from. In the following sections, we’ll highlight a couple of options available to traders.
Free MT5 Signals
The MetaTrader 5 trading platform used to allow users to create and share free Forex signals, which could be subscribed to by other traders.
However, they recently changed how this service works. It is no longer possible for traders to create free Forex signals in MT5; only users which have achieved official seller status can share signals through the platform.
It is also no longer possible to access Forex signals using a demo trading account; only live MT5 account users can access the Signals section in the trading platform.
For live MT5 account holders who wish to access paid Forex signals, you can do so via the Signals tab in the Toolbox window at the bottom of the trading screen.
Free Trading Signals in the Research Terminal
However, there remain options for obtaining free trading signals for Forex as well as other asset classes. One option is using the Research Terminal, an add-on for both MT4 and MT5 which is available for clients of Admiral Markets.
Let’s take a look at how to access free Forex signals using the Research Terminal.
Technical Insight
Within the Research Terminal, the Technical Insight section highlights both bullish and bearish technical events which have taken place across a wide variety of financial instruments.
Traders can navigate to the Screener section and choose Forex to focus specifically on currency pairs, as highlighted in the image below.
Here, traders will be presented with different currency pairs, a summary of the technical event which has been detected and whether this event is bullish or bearish.
The events presented here can be filtered according to individual preferences by the following criteria:
- Bullish or Bearish
- Daily or Weekly – for shorter-term or longer-term signals
- Event Type – choose from signals generated by chart patterns, candlestick patterns or technical indicators.
By clicking on an individual event, traders can open a price chart displaying more detailed information about what has happened.
By default, the chart will show a description of the event which was selected from the previous menu; however, it is also possible to view all events which have taken place recently on the asset’s price chart.
The top of the screen also highlights the short-term, intermediate-term and long-term prospects of the asset in question based on the number of bullish and bearish events which have recently taken place.
Featured Ideas
Whilst the Technical Insight section highlights different bullish and bearish technical events which have taken place on an asset’s price chart, the Featured Ideas section takes things one step further.
Here, traders can find real-time bullish and bearish trading and investing ideas based on both technical and fundamental analysis.
Some of these ideas will also suggest possible levels for price targets and stop losses, as highlighted in the image below:
By selecting an idea from the top of the screen, traders can find out when the Forex signal was generated, what it is based on and, if relevant, a possible target range and stop loss level.
Final Thoughts
Forex trading signals can help traders identify opportunities within the Forex market. As well as providing actionable suggestions, they may also be useful for beginner traders as a learning resource.
However, they should be used with caution. Rather than just following the signal provided, traders may want to use them as a basis to conduct their own research.
Trading signals may not always be reliable meaning that they will sometimes lead to losses. Furthermore, trading is inherently risky; before you start, you should make sure you are aware of these risks and take steps to help mitigate them.
For beginner traders, whether using signals or not, it’s a good idea to practise trading on a demo account before transitioning to the live markets.
Frequently Asked Questions
Do Forex signals really work?
Naturally this depends on the signals in question. However, it’s important to note that even the most successful Forex signal providers will share losing trades from time to time. Therefore, it’s crucial for traders to always exercise proper risk management.
How can I get Forex signals?
There are a wide variety of Forex signal providers online. However, it is important to research providers before using their services and to try and avoid those which make false or exaggerated claims.
It’s also important to bear in mind that trading is inherently risky and using Forex signals doesn’t change that fact. Therefore, always be sure to exercise proper risk management when trading.
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