Trading on the foreign exchange market presents the opportunity to create a substantial stream of revenue. In fact, there are many investors who earn their living by trading on the FOREX. However, the FOREX is a complex and dynamic market that requires a substantial amount of knowledge to produce effective trading strategies. The necessary knowledge required to be successful on the FOREX can create a sharp learning curve, requiring and exorbitant amount time to master, unfortunately, not all investors and traders have the time to invest in increasing their knowledge of market indicators.
The flexibility in the manner in which traders can enter into trades allows them to set pre-specified entry criteria and automatic stops for exiting the trade. One of the best programs available for helping to identify trade signals for entering and exiting trades is forex trading signals.
How Does It Work?
Forex trading signals are distinct buy and sell indicators that alert traders of the most optimal entry and exit points. Generally, these trading signals are generated by Forex trading signals – your trading advisor, and they are subsequently sent to traders via email, smart phone and other devices, allowing these traders to focus on other pressing issues. When a trader receives a message with a signal that alerts them to enter or exit a trade, they simply take action.
Identifying the Primary Indicators Used by Forex Trading Signals
The vast majority of trading indicators are generated on the basis of information that is produced through technical analysis of the FOREX market. These analytical programs use several primary indicators to help recognize certain market trends. A signal service provider will use this analysis to determine the most advantageous point of entry and exit.
Some of the most common indicators are:
Simple Moving Average: The simple moving average of a currency is determined through the use of analytical charts. The signals that are indicative of a time to buy are triggered as the price of a specific currency advances above the average line, and subsequently, the signal to sell is triggered when the price of a particular currency falls below the average line.
Moving Average Convergence Divergence: This is an average that is reflective of the relationship between two dynamic price averages, being calculated by subtracting the 26-day exponential moving average from the 12-day EMA. It is a nine-day EMA, which is known as the signal line that is plotted out on the top of the MACD. The signal line that is plotted out is what triggers the buying and selling signals.
Volume: This is an indicator that is reflective of the market’s interest in a particular currency pair. Market volume is highly indicative of the development of a new trend.
For the trader who wishes to take advantage of the benefits of trading on the FOREX, but lacking the time to invest in learning all of the analytical skills to be consistently successful, the best alternative is to use forex trading signals – your trading advisor to help them determine when they should exit and enter trades.