Forex signals provide a quick and easy way to copy trades of other forex traders without needing the knowledge or skills required to analyse the markets and trade by yourself. Whatever your level of trading experience, anyone can look for a forex signal provider.
However, with so many to choose from and many being scams, it is imperative that you do your research before-hand and that you are aware of the risks involved. Here we will take a look at some of the best forex signal providers and what to look for if you are considering using a signal service.
What Are Forex Signals?
Forex signals are buying or selling recommendations provided by a forex signal service. They can tell you the currency pair to trade, the direction to trade in, the entry price and the exit price. All of the market analysis is done by the signal provider who provides these signals for other traders (followers) to copy either manually or automatically to their own trading account.
Forex Signal Example
Bob has been analysing the market for years with some success. Bob decides to offer his trading signals to other traders and starts “Bobs Forex Signals”. He signs up with a forex broker who will publish his signals for other clients to follow and choose to copy if they like the performance.
Clients can either manually copy Bob’s trades when there is a signal alerts (via email or SMS) or have them automatically placed on their account with the lot size they choose. Manual trades will need to be managed yourself whereas automated trades can be managed on your behalf.
Some forex signals can include predefined stop loss and take profit levels which makes the risk to reward clear in advance and allows you to place these limits. Otherwise, if you were manually copying signals then you would need to manage the trade yourself or wait for a signal to close the trade.
What Are the Types of Forex Signals?
There are various ways in which you can receive forex signals. The option you choose will depend on your own individual needs, goals and experience level. Here we will take a brief look at the different types of forex signals to help you decide which you prefer.
Manual Forex Signals
These are the most basic and flexible type of forex signals. A signal provider will send out an alert to place a buy trade or sell trade. This is usually done via a broker’s platform, email, SMS or social media. The follower can then decide if they want to take the trade or not. Whilst this does add flexibility, not all signals include money management and may not be verified by a third-party signal service such as MQL or MyFxBook.
Automated Forex Signals
These forex signals are automatically placed on your trading account without any intervention need on your part. You simply choose the traders that you wish to follow and link their signals to your own account, specifying your lot size for each trade and maximum risk. Automated forex signals are commonly provided through forex brokers such as eToro and social trading platforms such as ZuluTrade.
Semi-Automated Forex Signals
These signals are a mix of both the above. The trade can be placed automatically on your account but without a stop loss or take profit. This means that you have to manage the trade yourself. This defeats the purpose of “hands-free” trading if that is why you are considering a forex signal service. However, those with more experience my prefer to manage the trade according to their own money management principles.
How to Use Forex Signals?
One of the main selling points of forex signals is that they are accessible to anyone. You simply decide on the type of signal service you wish to utilise, sign-up to a broker and copy trades. You can then check back to see how they have performed and either continue to copy them or not. In the next section, we will look at some of the most popular forex signal services and what they provide.
Best Forex Signals
This reputable and well-established forex broker has an easy to use copy trading system where you can choose to follow signals from a huge range of traders around the globe. You simply open an eToro account, make a deposit and choose signals to copy to your account.
The position is opened and closed by the traders that you choose to follow and copied automatically to your account. You can choose the risk and drawdown limits that you feel comfortable with.
The eToro social trading platform is available as a web terminal and a mobile application for iOS and Android devices. It is equipped with the latest innovative tools to assist traders with finding suitable forex signals.
eToro provides plenty of information to filter the signals according to the statistics which matter the most to you. You can search for traders according to percentage gain, number of followers, risk, drawdowns and much more.
You can view investors chosen by editors, popularity, top performers, trending and most followed. Clicking on an investor will give you a detailed overview of their account which includes their news feed, statistics and portfolio.
In addition to copy trading individual traders, there are the eToro CopyPortfolios. These are built around an algorithm that can choose top performing assets and traders for you to follow and therefore create a fully customised trading portfolio.
Unlike some other forex signal services, eToro includes full money management and removes possible latency delays as the trades are executed on their own platform. The brokerage’s regulation, transparency and popularity, make it one of the most reliable free signal providers in the market.
AvaTrade is one of the largest online brokers. In addition to a range of industry leading trading services, they offer a copy trading platform via the AvaTrade mobile app. AvaSocial allows you to follow and copy the trades of a wide selection of traders. You can create groups to share ideas with other like-minded traders or message your mentor or peers directly.
AvaSocial is suitable for traders of all experience levels. You can learn from more experienced traders and save time by getting a clear overview of the market without needing to conduct in-depth analysis on a daily basis.
You can receive continuous real-time updates from friends on your newsfeed, see what they’re trading, comment, share, like or simply copy trading signals. AvaSocial offers hundreds of trading instruments including forex, indices, commodities, shares and cryptocurrencies. They also offer awards for the trades you place every day.
You can get setup with AvaSocial in just a few minutes and be ready to copy traders already on the platform. Simply download the AvaTrade platform, create an account, make a deposit and start copying trades!
ZuluTrade is an online copy trading platform that is very easy to use. You simply signup on the official ZuluTrade website and connect your trading account. You then select the traders that you want to copy trading signals from. These trades are then automatically copied on your trading account. It is as simple as that! You can add or remove traders at any time.
ZuluTrade provides performance statistics of all the traders so you can choose the best forex signals to copy based on returns, duration, drawdown, win rate, average pips, currency pairs, amount of trades and more. This allows you to choose only the best forex signals to be copied onto your personal trading account. You can follow one or multiple traders completely free of charge.
ZuluTrade has one of the largest groups of forex traders to copy trades from so if you are looking for a fully automated forex signal service that is not too complex and requires no prior trading experience, then be sure to check them out. They even offer a demo account to test their service out and follow signals risk free.
MetaTrader is one of the most well-known forex trading platforms that is used by millions of traders all over the globe. It was developed by Russian software company MetaQuotes and is available free of charge as a web or desktop platform as well as a mobile trading app.
MetaTrader Signals is a copy-trading service allowing you to automatically copy provider’s deals on your trading account. The signals service allows users to easily connect to any signal directly through the MetaTrader platforms and automatically copy trades of professional traders. There are thousands of signals for MetaTrader 4 and MetaTrader 5 that are available in the service.
You can search and filter signals according to various factors such as maximum profit, monthly profit, daily profit, reliability, price, reviews, rating and more.
Subscribing to the MQL signals is an easy process. You just need a MetaTrader 4 or MetaTrader 5 trading account and an MQL5.community account. Go to the trading terminal settings and specify the MQL5 account in the “Community” tab. Now you can subscribe to the signal either directly from the trading terminal or on the MQL5.com site.
With over 8,000 trading signals to follow, MetaTrader has signals for all different trading styles. You can choose between both free and paid signals. They support a variety of payment methods that includes credit/debit cards, online payment processors, PayPal, Union Pay, and web money. Customer support is delivered via a service desk that gives a prompt response.
Anyone can copy signals to their demo or live trading accounts. Most of the best forex brokers will support copying signals through the MetaTrader platform due to the fact it is the platform of choice for many brokers.
DupliTrade is compatible with the MetaTrader platform and allows you to automate your trades by copying the activity of experienced traders. DupliTrade goes that extra step by auditing and monitoring all traders on its platform to help ensure that they maintain a quality offering.
In order to be accepted as a signal provider on the platform, traders must have years of market experience, and a proven record of making successful trades with real money.
DupliTrade is a simple platform to use and thus, suitable for beginners. You can browse through a selection of traders and choose to have their trades copied directly to your trading account in just a few simple steps, easily creating and monitoring your own bespoke trading portfolio in real-time.
ForexSignals.com helps traders of all levels learn how to trade the financial markets, with over 83,000 users worldwide. They have a range of tested strategies, powerful tools, and experienced traders to arm you with knowledge.
With so much to offer forex traders, some of the key features of the ForexSignals.com service includes:
- Receive market analysis from well-seasoned Forex mentors
- Join daily live streams and review Forex currency pairs in real-time
- Share your own trade ideas and analysis with other traders inside of the Trading Room
- Extensive range of Forex educational materials including videos and interactive workshops
- Get free Forex trading tools including calendars, calculators, sentiment analysis, heat map and more
What Are the Advantages of Forex Signals?
The main advantage of using a forex signal service is that you don’t need to worry about conducting complex market analysis yourself. All of the hard work is done for you by the signal provider. They simply send out a signal for you to copy on your own account. This mean that you do not need to undergo many years of studying and practising in order to trade forex online. With some shopping around, you may be able to find a professional trader with a proven track record that has sustained throughout a long period of time.
Not only can forex signals benefit the follower, they can also be profitable for the signal provider. They can set a fixed fee that followers have to pay regardless of the performance of the signals. Alternatively, the provider can also earn a share of any profits each follower makes. This type of model is often preferable as it is on the own interest of the provider to produce profitable signals.
There is flexibility when using forex signals. You can choose to follow one or multiple signal providers and a variety of forex, stocks, cryptos or other trading instruments. Some copy trading platforms will let you specify your lot size, maximum overall risk and drawdown limit.
What Are the Dis-Advantages of Forex Signals?
There are no guarantees that the signals will produce good results. It is therefore extremely important that you are fully aware of the significant risks involved with signal copying before you even consider it.
If the signal provider is charging a fixed monthly or annual fee, they are going to get paid regardless of how the signals perform. Therefore, this opens the door for scammers to offer forex signals that do not have complex market analysis attached to them.
Some copy trading services can cause a delay between the signal being sent and being placed on the followers account, whether the process is manual or automated. This delay can create a discrepancy between the entry prices which could have an adverse effect on the performance of the signals.
It can take some time to sift through the vast amount of signal providers to find a reliable one. You will need to filter signals according to the statistics that matter the most to you. This can include the drawdown, duration of signals, profit factor, risk to reward ratio, etc.
How to Choose the Best Forex Signals?
As mentioned above, there are a variety of factors worth considering when choosing a forex signal provider. Some of the key things to look out for include the following:
There are free and paid forex signals. Consider what your budget is and how much you will need to make from the signals in order to make it worthwhile. Free signals can still be good as the provider may be making income from a share of the profits whereas a paid service is not always going to produce good signals as the provider may just be looking to make a quick buck.
Keep an eye out for forex signal providers who offer free trials. This can be a good way to familiarise yourself with the signals they provide and decide if they are suitable for your own goals.
This is the amount of profit that the forex signal provided by the trader has gained since its inception. Whilst profit can be high, we also need to consider other factors such as drawdowns and duration the forex signal has been running for.
A forex signal can gain a lot of profit by using a wide stop loss and having big drawdowns which can eventually cause problems. Although, this is not the case with all forex signals that have generated a large amount of profit.
Consider that although the percentage of profit may be high, the actual monetary results will depend on the lot size used.
This is how long the forex signal that you can copy has been running for. Logically, the longer a forex system has been running, the more data we have to draw an accurate conclusion to its overall performance and thus, we can get an idea of what to expect moving forward. Although of course nothing is guaranteed in trading!
This tells you what the average amount of pips per trade of the forex signal is. I feel that the more pips the trader generates per trade, the better the risk to reward could be and also the less detrimental broker factors such as spreads, execution speeds (slippage) and commission can be. The higher the better I would be looking for!
Keep in mind that forex trading systems that shoot for bigger amount of pips per trade will tend to trade less frequently than those who look to gain a smaller amount of pips that add up over a higher trading frequency – this can also increase trading costs as you have to pay the spread & commission more often.
Shows the maximum drawdown on the forex traders trading account. Drawdown shows as the difference in pips between the highest and lowest point of the account. It is a measure of the largest loss that the trading account had at any given moment or period of time. I would personally not want to pick a signal that has high drawdowns as I would consider it high risk.
This tells us the worst trade that the trader had on the account in pips. The greater the worse trade (biggest loss), the more chance we have of hitting a similar trade in the future. I would look for the lower the better as I would not want 1 losing trade wiping out all of the gains.
If the average win was around 10 pips and the largest loss 80 pips, we could expect 1 loss to create a hit on the trading account and cancel out 8 winners. Ideally, I would like a risk to reward ratio of at least 1:1, 1:3 even better.
That being said, the worst trade can look artificially high if there was a big news release or unexpected fundamental factor that caused a spike although in this instance, I would have wanted the trader to have a safety stop loss in place. It could be a sign that they use a wide stop loss so be careful.
This statistic shows us the amount of profitable trades the trader has had trading on the account. The higher the win rate percentage, the better. With a win rate north of 50%, we could have a risk to reward ratio of just 1:1 and still do well in the long run.
If a win rate is too unrealistically high like 90%+, there may be a chance there is a dangerously wide stop loss or money management strategy being used such as martingale, grid or hedging. In this instance, we would want to check other statistics such as the maximum drawdown. The greater the number of trades combined with a high win rate can be a sign of a good forex trader to copy trades from.
Maximum Open Trades
This tells us what the maximum number of trades the forex trader providing the account for us to copy had open at any one time. The larger the amount, the riskier I would consider the signal to be. If the account had 20 trades open at one time and the risk per trade was set to 2%, that would mean 2% x 20 = 40% total risk at once!
Thus, if copying a forex trader who has a high amount of trades open at any one time, I would make sure to limit the risk accordingly. Also, it is worth considering that some systems may open multiple trades to cover losses (grid, hedging) although other may just do it to diversify more and grow their portfolio.
As the name suggests, this is the best trade in terms of pips. E.g. If the best trade is 100 that means that the greatest win on the forex traders account was 100 pips. The higher the better in my opinion, especially when combined with a high win rate and low drawdown.
We should perhaps consider that this could be misleading in the sense that there may have been a news release or other fundamental factor that caused a large spike which gave a win greater than usual for the particular system in question.
Average pip per trade would be a better analysis in my opinion to gain a more realistic insight into what to expect from copying the trader.
This tells you how many investors are following (copy trading) the trader account. I would say the more that are following and the longer the trader account duration, the more confident I would be in copying the signals.
That being said, if you look around, you can find some golden nuggets that others may have over looked or these systems just may not have fitted within other traders’ preferences.
Also, new forex signals will logically have less followers but may be worth adding to favourites to keep an eye on and see how they perform over a sustained period of time.
You will want to make sure that the signal provider has excellent customer service who are on hand and willing to help you as and when required. You can have the best forex signals in the world, but that is no good if you cannot reach out to someone when you need help.
How to Avoid Forex Signals Scams?
It goes without saying, where there is money to be made, there will always be some unscrupulous people looking to take advantage. This is unfortunately quite common with forex signals. You will often see wannabe traders with no experience offering forex signals to unsuspecting victims with false claims of forex signals with guaranteed results.
Forex signals can be created and sent over via social media which has also opened the door to scammers. Anyone can create a social media account and claim to be an expert trader.
One thing my many years in the forex industry has taught me is that there can never be any guarantees in trading. Even the best forex signals will have losing trades. I would run a mile from anyone claiming you are “guaranteed” to yield a certain percentage.
It is imperative that you do your due diligence and read as much feedback from existing clients as possible. You may also want to consider starting on a demo account to begin with to see how the signals perform, if they live up to expectations and meet your individual trading goals.
I would only consider forex signal providers that are verified by a third-party such as a broker, MyFxBook or FXBlue. I would want the account to be fully verified with trading privileges confirmed. Any of the trading signals should be delivered by professional traders with a proven track record.
There are many forex signal providers available to users of all experience levels from across the globe. You can choose between manual signals which you place on your own account or fully automated signals that are placed on your behalf. Whatever option you do choose, it is very important that you are aware of the risks involved and make sure you are using a reputable service.
All results are based on historical data. There is no guarantee of future performance. You should understand the risks involved with trading. Different brokers can produce different results due to spreads and liquidity. Your capital is at risk. Beginner traders should research and learn about trading before using any forex software.