Many traders rely on Forex signals to help make decisions about trading. Some traders find it very difficult to make trading decisions while others rely on the signals purely as an additional help to reinforce their own decision making process. After all, two heads are better than one!
Many Forex brokers and coaches offer this service, and it is important to know which one is more suitable to your style of trading. There are few software programs out there which can also provide some help.
In my experience, Forex signals are to be used as guidance, not something I would follow blindly. It helps me in my own trading, but I do my own due diligence first and then use the signals as an addition to my own trading decisions like a compass that enables me to steer my way around.
Nothing beats the learning process of recognising Forex signals. One of the simplest forms of signal is support and resistance levels. Price has a tendency to hit these levels. Most traders will either take it down to support; or bring the price up to the resistance levels and then make a new high or low depending which side the price is trending.
You have to find these key levels of support if the price is going down and key levels of resistance if the price is going up. Draw your lines around the candles where most of them are hitting a particular price level. If price moves again from that level and goes higher, then you could be in a ‘buy’ trending market. The price will then stop at the next key level, form another resistance point and move on up further. Every time, it creates a new price level, these would be your resistance levels.
The price can also use the same levels coming down and the resistance levels you marked going up would then become the support levels. These can be used for a ‘sell’ trade.
If the signals were good over the period of one month of trading, then you should trust them. You may not win every trade, but the success of your trading will improve dramatically against going alone without the understanding of the markets.