Trading Signals Meaning
What is the trading signals’ meaning? A trading signal refers to a tool or suggestion that informs a trader on when to make an important decision regarding the securities within their portfolio. Like the name suggests, it is an indicator that shows when it is appropriate to either sell or purchase. It mainly helps the trader to leverage on profit-making opportunities and also enables them to stop further losses in cash.
Trading signals rely on technical and fundamental analysis conducted either automatically or by human professionals. The former is based on the activities in the market and focuses on vital economic indicators. Traders should be cognizant of the fact that the trading signals do not constitute investment advice. This is based on the fact that implementing them is risky; the trader could lose real money.
Various types of trading signals exist. Some are available for free while others require the trader to pay a subscription fee to use the services. It is worth noting that most trading signals are usually in the forex market.
Types of Trading Signals
- Manual Trading Signals
Manual trading signals involve a time-consuming process where an actual trader sits behind a computer and looks for all the signals sent by a service provider. Upon analyzing what has been sent, the trader then makes a final decision on whether to purchase or sell a currency or asset. In this case, the decision made is subject to the trader’s interpretation of all the available signals. However, this type of trading signals is beneficial since a human being can evaluate the market in a way a program cannot since the analysis made by the latter is inflexible and is based on a pre-written algorithm. A human trader, therefore, possesses additional skills.
- Automated Trading Signal
An automated trading signal is generated by software. The software is programmed to analyze the different market forces and events and consequently recommend the appropriate trade. However, the accuracy of automated trading signals relies on the experience of the developer of the software. The developer should already be a seasoned trader and an expert in the particular market for which the trading signal is meant. Additionally, the software may malfunction leading to losses during the downtime.
Who is Signal Provider?
Top list of Trading Signal Providers
Autochartist is an online platform founded in 2004. It provides automated technical analysis. It is beneficial since it examines multiple markets, analyses the information across various time periods, and avails vital information that will aid in trading. IG, a renowned broker, has integrated Autochartist into its service, further showing the signal provider’s reliability.
- Signal Centre
The trading signal provider was initially known as PIA first but it rebranded in 2018. It is based in the UK. It provides an analysis of various markets including equities, commodities, and forex. IG has also incorporated it on its platform.
More specialized trading signal providers exist. For instance, ForexSignals.com and DDMarkets only provide FX trading signals. Due to the research work required, it is rare to find reliable service providers that provide free trading signals.
The online platform was founded in 2012 and charges a monthly fee. It provides its users 24 hours access to trading rooms where the visitors view seasoned traders make trades and explain the reasons behind their actions in real-time.
- Digital Derivatives Markets (DDMarkets)
The platform was founded in 2014 and is famed for its transparency and reliability.
Conclusion: the importance of trading signals
If you want to make money now as a trader, you could rely on trading signals to make informed decisions on what to invest in. The trading signals act as triggers and are based on in-depth analyses conducted by software or seasoned experts. Nonetheless, a reputable and reliable signal provider is an important prerequisite.
Trading signals are often given following research and analysis by professionals or well-designed software. A lot of background work goes into providing them. Therefore, they are important since they substitute the need for traders to carry out research on their own as this is time-consuming. This convenience makes trading easy. It necessitates the utilisation of trading signals for people who do not have a vast knowledge of how the market works. Alternatively, they are also useful for traders who hold other jobs and look at the financial markets as a source of extra income. They could be too busy to carry out research. Trading signals come in handy.
A forex signal is an alert, based on market trends, that informs the trader when it is appropriate to either purchase or sell currency. Essentially, the alerts are expert advice. It is important to note that forex signals work in the same way as trading bots. The only difference is that the latter completes the action recommended (either buying or selling on behalf of a customer) while in the case of the former, it is the trader who selects the option whether to buy or sell.
The crypto tools available on either the brokers’ or exchanges’ platforms include: Charts; Crypto wallet; Crypto news summary tab; Market watcher
Trading And Investment Tools
Importance of Trading and Investment Tools The potential for losses and the need to make informed decisions when trading in forex, crypto