The Best Forex Signals for Trading [in 2021]
All products and services featured are independently selected by WikiJob. When you make a purchase through links on this page, we may earn a commission.
Forex signals are recommendations (either made by human analytics, automated software or a trading robot) that provide information about a currency pair.
This information will allow you to make an informed decision as to whether you want to proceed with a specific trade.
In this article, we will explain how you can find the best forex signals for trading.
What Information Do Forex Signals Give?
Forex signals will analyse the currency market to determine entry and exit points for pairs of currencies. For a trader, this is important because it allows you to decide whether to trade that particular currency and the likelihood of making a profit.
The moment that the analyst determines it is the right time to buy/sell that currency, the trader will receive a signal. This may be via social media, such as a tweet or a WhatsApp message, or it could be via an email, live messaging or an RSS feed.
When you choose your preferred forex signal provider, you’ll have the opportunity to select your communication method.
It’s important to note that because forex operates across four major time zones (London, New York, Sydney and Tokyo), all signals are sent in real time. This means that the forex market trades 24 hours per day.
Why Are Forex Signals so Important?
The purpose of a forex signal is to give traders accurate information so they can earn as much money as possible via forex currency trading.
Because they are based across the four distinct trading zones, any small fluctuations can cause a big difference in profit price. The signals consider real-time data such as information from banks, the world news agenda (for example, Brexit) and market directions.
Are Forex Signals Legal?
As with various elements of the stock exchange, there are legal and scam forex signals. Strictly speaking, because the signals are imparting financial advice (for example, when to buy or sell currency) the forex signal provider should be a certified financial provider.
According to MyTradingSkills, many forex signal providers will use the disclaimer ‘Views are not investment advice and should be used only for educational purposes’.
There are some scam forex signal providers out there; particularly ones which are free of charge. This is because the providers are more concerned with subscriber numbers than the accuracy of data.
When it comes to choosing which signal provider will give you the most accurate advice, you should always do your due diligence first.
Later in this article, we’ll explore more about the types of forex signal providers and how to do your research.
Types of Forex Signals
There are two primary types of forex signals:
The legitimacy and accuracy of both of these types can differ, and each will have its pros and cons.
If we break down the signals further, they can be created via manual analytics or robotic software. Some forex signal providers will use technical analysis to determine their data, whilst others may use complicated algorithms to decipher the most appropriate trading moments.
- Manual signals are established by human analytics. A team of dedicated analysts will take an overview of the entire foreign exchange and will be able to make decisions as to the current trading conditions. They’ll be able to develop individual strategies with their own finesse and tweak it in accordance with the global market conditions.
- In contrast, automated signals are based on algorithms and computer software which will do the hard work on behalf of traders. It will be set up to view technical conditions, allowing it to focus upon 24-hour trading. However, because of their set rules, they can be inflexible and can lack the ability to respond to world-wide fluctuations caused by the news agenda.
Fundamental vs Technical Analysis – What’s the Difference?
When it comes to analysing the foreign exchange and learning how to interpret the available data, many forex signal providers choose to use either fundamental or technical analysis.
- Fundamental analysis looks at economic, social and political forces. It takes a holistic look at the forex to determine expected currency supply and demand. It takes a look at various economies to see if there are any factors which may strengthen or weaken currencies and determine a predicted outcome. For example, countries with high levels of unemployment may have weakened currencies.
- Technical analysis allows traders to study the price movement of currencies. The idea is that if you understand the historical context of the market, you can make accurate predictions about how the market will fluctuate. It’s based on an inherent belief that history will ultimately repeat itself, and will use that past information to inform you of future decisions. Technical data allows analysts to predict and spot trends and patterns.
How to Find the Best Forex Signals
Now you know a little more about what forex signals are, it’s time to determine how to find the best forex signals for you.
First, you need to decide whether you want to make use of free signal providers or invest in a paid-for subscription. As discussed earlier in this article, each has its pros and cons, and your choice may be influenced by how seriously you are taking your forex trading.
- If you’re only investing small sums, you may decide that free signals are better for you.
- If you are looking to invest heavily, it stands to reason that you may want to yield better results.
If you are choosing to invest in a paid-for model, then investigate the capabilities of free trials.
Many forex signal providers will give you access to free trials that will allow you to decide if it’s the right signal provider for you. These free trials will allow you to set up demo accounts to make trading decisions using their data without the risk of losing any real money.
Demo accounts should be used as a way to not just determine the signal accuracy but also to see how well you respond to that specific signal system. Each will have its individual strengths and weaknesses, so you will need to find a solution which works with you and your lifestyle.
If you know that you only want to be trading during set hours, you may prefer a provider which uses manual signals to determine market fluctuations. The signals will be much more responsive to your active hours and you’ll be able to determine how you receive your signals.
Your free trial will give you the option to try different providers and see what works for you.
Choosing one which suits your trading style is important; if you prefer to receive your signals by personal message then a signal provider which automates its signals via social media may not be relevant.
When you’re doing your due diligence, you should decide what’s more important to you:
- Fundamental vs technical analysis
- Manual vs automated signals
- Communication style
Once you’re happy with what you want to look for, you can start to compare your providers. Look at what each one offers and research reviews to see what other traders are saying about their accuracy and reliability.
Practical Considerations When Choosing Your Forex Signal Provider
When it comes to choosing your ideal forex signal provider, make sure you pay attention to the following:
- Number of positions. Because the forex is such a volatile market open to so many variables, you should take a look at a minimum of 100 positions. This will allow you to gain a strong understanding of their service and capabilities across a wide range of market conditions.
- You should also consider if the signal provider has a positive ratio. As with the stock market, there’s no guarantee of return on income so you should view the risk to reward profile – this will show the likelihood of taking a risk and receiving a reward based on that risk.
- Success rate. To really judge its ongoing accuracy, you should be looking for a system which wins regularly and therefore has a success rate of more than 70%. This will show that it has ongoing reliability and trust factor rather than being a forex service provider which has merely had a lucky win. In addition, you should also pay attention to the frequency of consecutive losing trades. If there’s a clear pattern of unreliability you may want to start thinking about whether it's accurate enough to allow you to succeed in forex trading.
What Do the Best Signals Include?
Because forex signal systems should be an accurate predictor of profit, your specified signal provider must give you the most relevant data. As we said earlier in this article, forex signals can’t give you a definitive answer to what you should do, but they can provide you with relevant data to allow you to make an informed decision.
When you receive your signal (via whatever means of communication you choose) you should be looking to receive as much data as possible:
- Make sure that the signal is relevant to you. Double-check that it is referring to the currency pair that you are trading. It will not only tell you what the asset price is, but it should directly clarify whether you should buy or sell. It should also tell you whether the signal is ‘active’, ‘get ready’ or ‘closed’. This will determine how quickly you can respond to the signal. We’ve already mentioned that signals operate in real time so it may have come through from a different time zone or it may be something you can and should act immediately.
- Your signal should make clear the entry price. This is how much it recommends that you invest in the trade. Forex signals are designed to make you as much profit as possible and will be used to help you make the most of your trade. Therefore, the entry price will be the minimum amount required to make a good profit.
- Signal providers should also include automatic closing points (ACL). This is where stop loss (also known as SL) features will be automatically implemented if the market starts to turn against you. Signal providers will highly recommend that you set a pre-determined SL limit because it’s a key part of damage control. It maintains your long term profitability and ensures that you haven’t been adversely affected by the notoriously volatile FX.
- Within the automatic closing points, you should also be able to specify a take profit (or TP) limit. This is where your trade will automatically cease when you’ve reached your desired profit. As with the SL, it’s a damage control mechanism and it is based upon enabling you to take your profits at the right time.
As you become more experienced as a forex trader you will start to learn more about what you can and cannot do with signal providers and the data that they can provide.
The Best Forex Signal Providers
There are numerous forex signal providers available and we would always recommend that you conduct thorough research and due diligence before making your own personal choice.
Although we have listed several signal providers below, it should be noted that this is through online research, not personal experience. At WikiJob, we are not financial advisors and any information provided throughout this article is for educational purposes only.
With that being said, here are some popular forex signal providers:
On joining 1000pip Builder, you’ll receive manual signals based on both fundamental and technical analysis, overseen by experienced trader Bob James.
Signals are sent via email (or SMS for an additional fee), range from two to seven per day, and cover all four Forex sessions, aiming to be beneficial for traders worldwide.
There are three membership options available: $97 for a single month, $227 for three months and $697 for 12 months.
1000pip Builder’s performance is independently verified by MyFXBook, giving users additional assurance in the reliability of its signals.
FX Childs Play Signals is a manual signal service based on a copy-trade strategy designed and implemented by a trader known as Farhan.
It differs from other signal services in that Farhan’s own trades are automatically duplicated in your account, though there is a signals only option allowing you to control your own trades.
Farhan uses both defensive and aggressive trading styles and promises solid returns. You’ll need to operate an MT4 account to use the service.
The monthly subscription currently stands at $99, however, this is marketed as a promotional rate and prices may vary.
For a monthly fee of $97, you’ll receive on average four to 10 manual forex signals per day, predominantly for major currency pairs and crosses.
These are based on both fundamental and technical analysis, include entry price, stop loss and take profit levels, and are sent in real-time by both email and SMS.
Zero to Hero is based in the UK, but signals cover both London and New York sessions, with occasional signals for the Asian market.
As part of the service, you’ll receive signals based on a series of algorithms from an experienced trader who goes by the name of Franco.
BOTS claims win rates of 85%, achieved through a variety of trading styles based on both technical and up to date fundamental analysis.
As a bonus, you can interact personally with Franco through the BOTS platform, as well as sharing trading tips with other community members.
This is a unique forex trading tool in that it focuses on market sentiment analysis, alerting you to the open positions of other traders.
Based on the contrarian trading strategy, it allows you to take advantage of contrasting positions, sending alerts by email, SMS or push notification when a profitable extreme arises.
It’s designed for MT4 users and is available for the one-off cost of $97, with lifetime updates at no extra cost and a 60-day money-back guarantee.
6. Zero to Pro
Zero to Pro offers a good resource for traders looking not just for forex signals, but details on the strategies behind them.
Email notifications sent in real-time include entry, stop loss and take profit levels based on manual trades, as well as detailed reasoning on why each trade is entered into.
You can choose to pay for your subscription on a one, three, six or 12-month basis, with prices ranging from $97 to $497.
finviz is a free scanning tool that allows you to monitor market movement via candlestick charts, performance tables and quotes on currency pairs.
However, to unlock the full toolkit, including signals, you’ll need to subscribe to finviz Elite for $39.50 per month or $299.50 per year.
As part of your subscription, you’ll receive real-time email alerts based on personalized trigger events including price movement, news and your current portfolio.
This is an automated signal provider and uses its algorithm to test technical analysis. The website claims to have a 98% success rate and collated five years’ results before being made payable to the public.
Unlike other providers, there is no monthly subscription – just a $149 one-off payment. In exchange for the payment, users can access a user-friendly system that doesn’t just offer 24-hour automated signals but also provides users with high levels of customer service.
9. Tim’s Alerts
For a monthly fee of $74.95, subscribers to Tim’s Alerts will receive real-time day trading signals from penny stock trader and self-made millionaire, Tim Sykes.
Tim’s trading signals are rooted in an analysis based on his own successful trading style and can be sent via email or SMS.
You can also opt to receive signals by push notification with the app, which is available on both iOS and Android.
In addition to signal alerts, you’ll also receive a daily stock watchlist and have access to the Tim Sykes’ chatroom.
Fees are paid on a month-by-month basis, and you can cancel your subscription at any time.
10. Daily Forex
As a free email alert, this site will give you daily tips and advice on how to enter the forex trading market and what to expect.
Its vision is to show that free signals can be just as effective as paid-for subscription models. However, because it’s a free service, there are only a few updates a week rather than multiple daily signals.
We hope that this article has given you more of an insight into forex signals and what you should consider when selecting your signal provider.
We’ve deliberately written this article in a ‘top-line’ fashion – it’s designed to be a starting point for your research; before you start investing any of your hard-earned money into forex, we highly recommend doing as much research as you can.
WikiJob does not provide tax, investment or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.