Why use Live Signals?
Using a signal service allows you to piggy-back on the back of professional seasoned traders who have been involved I the markets for decades. Malcolm Gladwell says it takes 10,000 hours (ref to NY times) to master a craft, a signal service provides much more than simple Buy & Sell signals it provides an opportunity to learn from very best forex traders in the world in a live market environment, room or forum. Improve your technical market read through the eyes of a professional or use an automated system to make your entries and exits more systematic. Mechanical systems take the emotional & fear out of day trading the market or allow you to hold swing trades for days at a time.
This page serves as a guide to the types of currency trading signals that are available, the profitable and accurate forex signal services one’s we recommend and a list of resources for further reading.
What constitutes a signal, system or alert?
It is useful to not the difference between a signal and a trigger; a signal can be a piece of information – many of which combine to trigger a trade trigger which tells you to enter the trade. Some systems may produce signals but still require this trigger to execute the entry at a particular price whilst for other systems which only provide alerts, the signal is the trigger.
The best systems which provide alerts and triggers may be based on fundamental or technical price patterns, most of these trade the market on an intraday basis and as such the traders are day trading the FX markets, most commonly the pairs GBP/USD (Pound – Dollar), AUS/USD (Aussie – Dollar), EUR/USD (Euro – Dollar).
Alternatively completely automated systems may take advantage of their speed in decision to scalp the market, taking only one or two pips profit every few minutes. Over a long enough timeframe this adds up to significant profits, especially with a high enough win rate – these systems need no alerts as they fully automate the process.
The strategy you choose depends no your own preference as a trader and you dedication to learning this skill – perhaps you wish to put an automated MT4 strategy on autopilot and allow the technical advisor to do the work for you, or perhaps you prefer a more hands on discretionary approach.
How Do Copiers Work?
By connecting your account to that of a professional trader when they execute trades those executions are automatically executed in your own account, this allows you to keep control of your own funds and maintain security and protection against fraud since your capital never leaves your account. The trader does not have the ability to make withdrawals from your account; the trade copier is just a 24hr digital bridge between your account and the professionals you still have the ability to review all the trades made in your account and the account is held in your name.
Top 5 Best Online Providers
Using a paid signal provider will undoubtedly provide you with the best results and give you the skills you need to sustain a career in trading as I outlined in the opening paragraph. Using a trading room or an automated copier based on a platform such as MetaTrader 4 the following online providers can provide profitable live forex trading signals. Read more about the Currency markets on Bloomberg.
Best Free Signals
The only way to generate signals for free would be to use a technical indicator, these are indicators which run on trading platforms and perform calculations on the current price to indicate the likely next price movement. Or to use a free service, find out more about these on our review page.
For technical traders, we recommend TradeStation for its incredible suite of trading indicators.
Our Review of the Top 10 Profitable Automated Forex Strategies
Imagine if you could capitalise on decades of market experience to make your trading decisions:
- Knowing the exact probability of each possible scenario
- Trade for long term profitability
- Consistently make the same decision in the same scenarios which repeat in the market over and over
- View market data objectively
- Make more money
- Take more winning trades
- Trade with support from some of the best professionals in the world
- Trade a system with a proven historical record of profitability
- Not let your emotions impact your trade execution
Well, these are just a handful of the benefits of trading a mechanical or automated system. It’s no wonder that the greatest investment fund in the world as of the time of writing with 0 losing days and $million I profits is the *fund name*. s documented by *author name* in his bestselling book Flashboys *link* it’s no surprise that automated or high-frequency systems are such a hot button issue:
- Automated signals are the most profitable
- Bestselling books are written about blackbox systems
- The best paid coders are those working in trading & financial modelling
Here I want to breakdown how the retail trade can take advantage of this, review the best systems to find the most profitable. Lets start with a simple question:
What is forex trading?
Everyday the price of currencies such as the US Dollar (USD) or the British Pound (GBP) fluctuate in value due to a huge series of factors such as:
- Government and central bank policies such as changing interest rates affecting the EUR
- Large buyers and sellers such as hedge funds stocking up on currencies
- World events causing instability and the value of non fiat currencies *< bloomberg link* such as Gold to rise
- Speculation from short term trades seeking to make a profit on market swings
Forex trading is the skills of buying a currency pair (such as GBP/USD) either hoping it will increase in value which we can sell at a higher price to another buyer to shorting *< wiki link* a currency pair if we expect it to decrease in value. Short term speculators such as retail traders play a key role in the liquidity of the market place, we provide the transactional volume for larger buyers and seller’s to execute their orders and in return we can benefit from short term price movements.
The smallest incremental change in the price of a currency such as USD/EUR is a called a pip.
What is a trading system?
A system can be thought of as an algorithm, it is a mathematical idea which includes a series of rules which when given a particular circumstances are executed mechanically – note that it is incredibly important that given the same circumstances the same decision is made every time. This is why so many retail traders are unprofitable, by relying on themselves they make at least one of these crucial mistakes:
- Inability to monitor and analyse all relevant information
- Inability to make objective decisions
- Unable to execute their trade ideas even when their analysis is correct
If you make inconsistent decisions you will get inconsistent results. The human brain is not a perfect information processing machine, it is creative, imaginative it can build a perfect system but it can not execute it. Literally the more systematic your trading process is the more profitable it is.
How are forex strategies built?
Successful strategies to trade instruments such as USD/JPY (Yen) or USD/CHF (Swiss Franc) combine many of the following elements of traditional technical and fundamental analysis of the market to accurately predict short term price movements:
- Price action such as candlestick analysis
- Daily open & close prices for the different time zones (Europe, Asia, America)
How do you trade a system?
Systems can send you signals via email, SMS, twitte an iPhone or Android App or even autoamtically execute every signal for, guaranteeing a fill no the order for you. Every trade should have an entry price, a stop-loss (SL), and a take-profit target (TP) – this is the safe way to trade, since it limits losses to a fixed amount on a per trade basis.
When talking about profitability we need to look at systems holistically, of course this includes profit but we must also measure:
- Absolute return since inception
- Max account drawdowns
- Largest ever loss
- Risk per trade
- Frequency of trades
- Kelly Criterion
- P ration (? – what is that thing that measures risk adjusted)
- Are Losses limited or infinite?
Whilst we may find a system which has a high annualised rate of return (RoR) that system may take on a very high level of risk to accomplish those returns. Not only do we want the most profitable forex system but the strategy with the greatest risk adjusted returns – in other words:
The great fund managers make the best returns on the smallest risk
This preserves capital which maintains the health of our account but also maximises returns since a low drawdown means we can continue to earn compound interest on our profits which exponentially increases our rate of return – I believe Albert Einstein himself referred to Compound Interest as “the eight wonder of the world”.
Lets look at two signal services, both make a 10% return but one draws down 25% whilst the other only draws down 10%
$20,000 Starting Capital
$18k in year 10
$23500 in year 10
We increased performance & profitability just by decreasing account drawdown/losses.
The Truth About Signal Services & Profitability
Given the number of snake oil salesmen spamming your inbox with “the latest and greatest system with a 100% success rate” you may question whether such a system actually exists. Lets get some things straight:
- No system has a 100% success rate
- The profitability of a system depends on the sum of ALL it’s trades over a period of time, no single trade should make or break the account.
You should review profitability on a month to month basis to ensure the signal is profitable over time and avoids the short term variance of returns in the market.
So where can you find the best?
Systems created by individual traders are rarely profitable, to develop an accurate system you need access to:
- Huge amounts of detailed historical data
- Sophisticated price modelling algorithms
- A wealth of experience far greater than the experience of a single trader
- Large amounts of starting capital to invest in coding and testing the system
Given that it takes at least a few million dollars in capital, time and talent who has access to these resources? The answer is financial institutions such as Banks & Brokers. Forex brokers have invested in this technology and some of the very bets provide it exclusively to their clients? This is the perfect business relationship. The brokerage only stays in business as long as their clients are profitable, so the brokerage invests in developing a profitable alerts service to it’s clients since the survival of the brokerage is dependent on the survival of the trader since brokerages take a flat fee per trade executed.
As you can see there is no sense in paying for a separate system developed by an individual when brokers offer excusive access to their own profitable system with you have a brokerage account with them.
Name of profitable system & broker
Start detailing results of system
Illustrated guide on placing a trade, talk about platform, SMS alerts
Illustrated guide on opening an account > link to brokerage page
Top 5 Signal Provider Reviews
These signals are not only affordable but our ratings system means we believe they are the most profitable. Each strategy has been analysed, scams removed, ensured accounts are secure and easy to open. They provide advanced charting and graphs, real time quotes, economic news release calendars. Many providers also offer call and put binary option accounts if you would rather trade currencies on margin that way. Each offers a wide variety of instruments including EUR/JPY, GBP/CHF on their state of the art platform.
Metatrader 4 Expert Advisors
Expert Advisors are automated signals for the Metatrader program. Metatrader (MT4) is THE standard for forex trading within the industry, they offer simulated accounts where you can try out their Expert Advisors (EA’s) to monitor performance before funding an account.
This type of auto-trading can be incredibly profitable with a leveraged account, you must of course monitor your liability and exposure to the markets.
Why Forex & not Stocks, Options or Futures?
Due to pattern day trading rules trading stocks requires a minimum deposit of $25,000, leverage is limited which limits how many shares you can trade, shorting stocks is also more difficult due to your broker needing to borrow those shares.
FX trading has very low minimum deposits allowing you to try out an account with very little risk, you are also able to leverage your capital as high as 100:1 once you are confident in your winning system allowing you to maximise profits.
Best Forex Indicators
Simply using an indicator would allow you to generate free signals, Metatrader allows the use of indicators such as moving averages to indicate trending markets.
The truth about profitability and win rate