INTRODUCTION TO FOREX SIGNAL TRADING || 10% to TFC community account

Source

This refers to the method of trading (I.e entering and closing a trade) in which a trader follows the command of a Master trader (professional) or an Automated trading bot. In signal trading, the master trader/bot does the technical analysis while the trader completely depends on their command. Communication between Bot/Professioal and trader usually take place either on social media, through Short Message Service (SMS), Mail and website etc. Although bot sends command to a trader through sms on a specially programmed chat, majority of master traders prefer using social network. Today, the most used social network is telegrams and their channel can be located through a Facebook promoted post. MQL5 community is another place to locate a master traders.

Types of services rendered

Although an automated trading bot signal provider only offers the service of sending entry and close commands at a specific time for a certain paid duration, master traders (trade professionals) always provide both free and subscription service, basic trading ideas, account management, related articles etc.

Types of trading signal

There are 3 major of types of signals.
They are;

• Automated signal trading
• Paid/free signal trading

Automated Signal trading:
Aforesaid, this refers to the used of specially programmed bot hired by a trader. The bot analyze the trade through the help of it coded algorithm. This type of signal trading helps the trader to avoid emotions has every risk is shield by the bot. However, bot signal does not allow the receiver to grow his/her trading skills. This can be seen as a major demerit.


Paid/free signal trading:
As it name implies, this is a method of signal trading that a trader receive instructions from a professional. The professional tells pip to enter and exit. It can be either paid services or free. This method is used by upcoming traders to gain experience and earn passive incomes as well. A trader that uses this method can easily learn build their emotions and skills by following the skills applied by the professionals. The demerit is that most traders do become victims of scam when they are ask to pay for a VIP service. Another demerit is that any loss made by the master trader, the receiver become a victim too.

Component of a signal

A signal is not complicated to understand but it is proper to have a basic understanding of trading before decoding it.
A signal always consist of the following;

• Entry point
• Exit point
  Most free/paid signal trading, most master trader always give a maximum of three exit point.
  
  

screenshot taken from a private Telegram channel

Looking at the screenshot above, the master trader gave an instruction.

• XAUUSD: This means Gold vs USD
• SL: It means Stop loss.
  This instruction is given should in case the trend retrace.
• TP: It means Take profit. After the trend have hit targeted pip, this instruct the receiver to exit the trade with profit. The first Take Profit (TP1) is alway considered as low risk while the second Take Profit (TP2) is considered a high risk.

Is signal trading a proper decision?

Signal trading method is a nice decision but it is advisable for a trader to have a primary knowledge of trading. Today, there are hundreds of legit free/paid service signal providers on telegram and WhatsApp. Base on personal experience, I prefer signal channel on telegram or WhatsApp over bot because of the learning privilege. When choosing a signal channel, ensure that you test it on a demo account become venturing into real trade.

Below is a signal crypto currency signal that I received on a private WhatsApp group couple of days ago and the profitable result.

Conclusion

I’ve never attempt a real trade yet due to capital but most of my signals are trustworthy. Despite the trust, It’s not advisable to trade without personal experience on demo.

Receiving a legit signal should not trigger a trader lack consideration of risk management. Alway use a little lot size. Lastly, never subscribe to a random channel as there are lot of scammers

Ref;

investopedia.com
wikipedia.org
thinkmarkets.com

Thanks for reading through
Let’s interact on comment box