Forex Trading Signals' Form And Function
A trading signal performs three essential functions.
1
The signal identifies a trading opportunity and provides the user a queue for market entry.
2
The signal outlines a clear plan for exiting the open position, typically through the use of take profit and stop loss orders.
3
Trading signals automatically align risk to reward by predetermining market entry and exit price points.
In addition to furnishing currency traders with a measured approach to the market, forex signals are user-friendly.
To illustrate their functionality, assume that there is heavy intraday volatility the EUR/USD near the 1.1100 level. At first glance, price action in the EUR/USD appears chaotic, which then makes trading seem risky. However, your third-party signal provider recognises a potential buying opportunity and sends you a real-time recommendation to buy at 1.1106. There's also a suggestion of a take profit at 1.1142 and stop loss at 1.1094. Before the trade's execution, the signal has assigned a concrete risk to reward ratio of 1:3.
The Trading Signals do not constitute and should not be regarded as an investment advice. You act on the signals entirely at your own risk.
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