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How to Succeed in Trading Spreads

Published on 20 June 2021

A forex signa is a system that is set of analysis that forex trader uses to entering a trade on a currency pair. The signal is generated either by automated robot or human (experts) to clients (subscribers) of the service.

There are two type of forex signals, one is free and another one is paid. And also, traders can build their own signals to use freedomly as their need.

As a forex trader, whichever you choose it’s doesn’t matter. You have to choose a reliable one to understand what goes on in the background.

Indicators of Trading Signals Forex

Most trading signals in forex are generated with the help of technical analysis, which reviews several economic indicators to identify and analyze market trends. Forex trading signals are typically generated with the following indicators:

Simple Moving Average (SMA)

SMAs of a currency are derived directly from the currency charts. Buy signals are created when a currency price moves above the average line, while sell signals are generated when the price dips below the average.

Moving Average Convergence Divergence (MACD)

The MACD reflects the correlation between two moving price averages. MACD is calculated by deducting the 26-day exponential moving average (EMA) from the 12-day EMA. After that, a nine-day EMA is plotted above the MACD. This ‘signal line’ triggers the forex trading signal.

Volume

This indicator shows the market’s interest in a specific currency pair. An increase in the volumes reflects the commencement of a new trend, and signals are sent accordingly.

Bollinger Band

These bands reflect changes in market trends. When a band’s width tightens for a specific currency pair, its exchange price tends to change immediately, resulting in the generation of new trading signals.

Finally, bear in mind that the success of your forex trade is highly dependent on the quality of trading signals in the forex you receive. Therefore, it is important to search for a high-quality forex signal service provider. Note that not all forex trading signal providers generate immediate alerts. Some send it over the week. The former is undoubtedly superior. However, the latter tends to be more affordable. So, do a thorough cost-benefit analysis before choosing a provider.

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