Forex Signals – What They Are And How Traders Use Them By Foreign Exchange Traders

Monday, July 25, 2011

You may be aware of the phrase “forex signals”, and you want to know more about what they are. Before we go into that specifically, let’s first talk about about the forex market in general.

What is the Forex Market?

Imagine if we all lived in a world where there was only one currency? What would that be like? Well it would probably mean that we were all part of one global country. But more specifically, it would mean that there would be no Foreign Exchange Market. This is because there would be no foreign exchange rates, because we would all be using the same currency, so there would be no need for currency trading of any kind.

So, in a world with multiple currencies, we have exchange rates. These are the differences between the currencies when exchanging from one to the other. Currency traders are specifically interested in the differences in exchange rates when buying or selling between particular currencies.

Although the market has been around for many years, it has indeed changed a lot in that time. The main difference these days is the fundamental part that technology plays in the act of trading between the currencies. It is this use of technology which allow traders to trade more accurately and therefore stand a better chance of return a profit from their trades.

All About Forex Signals

Forex signals are indicators which tell traders what to do at certain times. For example, it tells them when to buy a currency, when to sell it, and when to stay clear of any trading with that particular currency.

There are a variety of different ways in which these alerts can occur. For example, it may present an audio alert in the form of a special computer beep, which is useful for people who do not want to sit at their computers all day. Alternatively, a visual alert may appear in the form of a pop-up message on the screen. Other alternatives include e-mail and text message alerts.

Different Forex Signals

We’ve already spoken a bit about the types of signals, which are mainly buy and sell. However, there are a number of other alerts which a trader may want to make use of. For example: OB/OS, which means when a currency has gone past a certain level and has either been overbought or oversold; Volatility, which refers to how uncertain a particular currency pair is; Partial Buy/Sell, which advises you to only buy or sell some of the currency pair, in order to minimize the risk; SL/TP, Stop-loss or take-profit, which means you should either stop losing on a downward trend or stop selling on an upward trend.

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1 comments:

Phani Kumar said...

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