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Trading Signals

Trading Signals

14.09.2020

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Trading signals are the solution for the trader

Trading signals are very popular among traders who have just embarked on the path of trading. Beginners expect to compensate for the lack of knowledge with modern computer technology

In practice, blindly following the instructions of commercial bots often leads to the loss of finances. As a result, traders become dissatisfied with the broker, the stock markets, and the whole world, but, unfortunately, are not ready to admit their mistakes. In this case, trading signals can come to the rescue.

What are the trading signals and what are they for?

The classic approach to trading involves market analysis. It is carried out based on the study of fundamental indicators, which include:

  • news background;
  • the state of affairs in the international economy;
  • dollar exchange rate and stability;
  • seasonal factors.

We will determine whether it is really worth trusting trading signals and how to use this tool correctly so as not to become another victim of the robot.

The second option is technical analysis, which is carried out by studying the rate quotation charts. It is believed that the market is cyclical, so charts allow you to predict the trend that will be relevant for an asset.

For calculations, complex mathematical formulas are used, which are not always easy for an ordinary trader to understand and learn to accept. To simplify the process, trading signals have been invented.

Since a favorable moment is highlighted on the chart and, as a rule, is accompanied by an audio or text message, the technique was called trading signals.

With their help, it is much easier for a trader to understand the situation on the market and does not need to spend a lot of time on mathematical calculations. Signals allow you to trade almost completely automatically and can bring very high profits.

This happens because the time gaps between closing and opening orders are minimal. Within one trading session, a trader has the opportunity to make several transactions at once and fix profit from them.

At the same time, not everything is so simple and smooth, otherwise, everyone would trade only in a plus, and the market simply would not have room for speculation.

How high is the accuracy of trading signals?

This is the main question that a trader needs to study before applying the technique. Since any bot works on the basis of a mathematical algorithm, it is able to produce very accurate results within its template.

At the same time, the situation in the stock markets changes depending on dozens of technical factors. The simpler the algorithm of trading signals, the less their accuracy. But this statement only applies to the global situation.

Within the template, trading signals have an accuracy of up to 92-95%. But it is important for a trader to consider other circumstances as well. Therefore, using only one type of signal is strongly discouraged. In most cases, this will lead to a drain on the deposit.

An elementary example, when a bot gives a trading signal based on a three-candlestick strategy, at the same time, you can see from the Fibonacci lines that the rate has not yet reached resistance.

Most likely, this means that quotes will continue to fall and if you enter now, the trader will simply lose half of the profit or will not earn anything at all.

In fact, there are significantly more criteria for assessment than two. Therefore, trading using signals presupposes the presence of several dozen instruments at once, which together make it possible to accurately predict the market movement.

What to choose: paid or free trading signals

Trading signals are often distributed completely free of charge. At the same time, traders are promised good profits on the machine. At the same time, paid trading signals are often expensive, so only a few people choose them. So is it worth overpaying?

Free cheese

Yes, yes, it is with this proverb that the situation can be briefly described. By downloading freeware software, you become a tester. The developer monitors how well his program does the analysis.

If there are problems and complaints, improvements are made, and the product becomes paid. Software development is a troublesome and costly business, so no one creates trading signals just like that.

To save a little on testing and get objective data about the application, developers distribute it for free.

It is not difficult to guess that the quality of such a product leaves much to be desired, and the promises of super-profits are nothing more than a publicity stunt so that inexperienced traders get hooked.

What, in fact, to pay for

If they ask for money for the program, this does not mean that the trading signal will work as stated and will bring a stable income. First, some developers are too greedy to give users the opportunity to test the product for free.

Secondly, some projects have not been modernized since their inception. This means that they are simply outdated and cannot adequately work in modern conditions.

There are good options among paid applications, but in fact, there are very few of them. It is much easier and more convenient to use professional trading terminals, which are already preinstalled with really tested and working indicators.

Manual vs automatic trading by signals

Modern bots are quite advanced, so they can receive trading signals and open and close orders without the participation of a trader. This is an objective reality and beginners often choose this trading option.

In practice, it turns out to be not very effective and can lead to a drain on the deposit in the first couple of days. Therefore, the pros recommend refraining from such experiments.

Trading on the machine

On the other hand, some bots do provide a very high level of income by targeting trading signals. In most cases, this happens when the market is at certain time intervals – phases of saturation.

During these periods, there is no too high volatility and the rate really jumps purely within the framework of mathematical algorithms. The only drawback, in order for the earnings to be decent, requires a large amount on the deposit.

Therefore, trading on the machine is associated with great risks and is not a priority. Even if robots show themselves well in the current situation, in a week or even a day the situation can change dramatically.

Manual control

This is a priority area of ​​work with trading signals. So you can independently assess how reliable the signal is and whether it is combined with other indicators.

Among the disadvantages is the need to devote a lot of time to trading. At the same time, manual control reduces the risk of stupid loss of money to almost zero.

Even the most experienced experts sometimes make mistakes, but manual control allows you to get out of an illiquid deal in time, so trading signals need to be controlled.

The robot does not care whether you earn or lose, so you should not shift responsibility for your own savings onto it.

Trading signals: is it worth trusting

We have already said enough about this. Trading signals – as a single instrument, are quite effective and allow you to quickly and accurately conduct a technical analysis of the market.

Novice traders are advised to work on medium time frames, in the range from 1 day to a week. At such a time interval, there is always enough time to correlate your actions.

Therefore, it should be said that trading signals can be trusted, but not blindly. Double-check the information and make a decision, guided by a comprehensive assessment of the situation, this will save you from financial losses.

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