If you’re based in the United States and want to find the best forex signals, you can generally distinguish between using key factors such as cost, strategy, results and frequency.
Read on for more information about forex signals and to check out Benzinga’s picks for the best free and low-cost forex signal providers.
Quick Look: The Best Forex Signals Providers
- FOREX.com – Open an account
- Daily Forex
- Forex Signals Factory
Overview: What are Forex Signals?
A forex signal is an indicator derived from a factor or combination of factors that suggest an optimal time to buy or sell a currency pair. An example would be a technical indicator signal like a moving average crossover that can indicate a point of trend reversal which might suggest a counter-trend position.
Traders with a technical analysis background commonly use a number of forex signals in their trading. One important advantage of signal trading is that you get rid of gut feeling trading, which might get you in trouble if you make a bad market call.
Most technically-inclined traders and automated trading systems use trading signals derived from technical analysis. This allows them to objectively determine when to get in or out of currency positions based solely on observations like price action or volume.
Using signals in your own trading could significantly enhance your trading results, whether you use your own signals or rely on a forex signal provider with a proven track record.
How to Use Forex Signals
One of the most basic forex signals used by traders consists of areas on the price chart where buyers and sellers tend to converge. These are known as support levels if below the current market price and resistance levels if above the market.
Traders might use these well-defined regions to place buy limit orders ahead of support levels and sell limit orders ahead of resistance levels as part of their trading plans. They might also put their stop-loss orders below support and above resistance levels.
Moving Averages (MAs)
Other technical indicators based on price include moving averages (MAs). These generate a popular trading signal when a short term moving average crosses above or below a longer-term one. If the short term MA crosses above the longer term MA, then the crossover generates a buy signal. If the short term crosses below the longer term MA, then that generates a sell signal.
Directional Movement Indicator (DMI)
Another indicator, the directional movement indicator (DMI), can be useful in getting a sense of whether or not prices are trending in a particular direction or not, as well as the strength of the trend if any.
The calculation of historical volatility can help you assess the risks involved in taking a trade based on past price action, which can also give you an idea of what sort of position size you should take on a risk-weighted basis. Higher historical volatility signals greater risk.
Oscillators are technical indicators often used in technical analysis to determine overbought and oversold market conditions. One of the most popular technical indicators of this type that can be used to generate forex signals is the Relative Strength Index (RSI).
Relative Strength Index (RSI)
The RSI is a bounded momentum indicator that has a range of 0 to 100, and it can signal that a possible trend reversal is likely when it moves into extreme territory.
A reversal in a rising market can be signaled when the RSI indicator is overbought above the 80 level, while a reversal in a declining market can be signaled by an oversold condition when the index falls below 20. Divergence between the price and RSI when the indicator is in extreme territory above 80 or below 20 gives an even stronger market reversal signal.
Where to Get Forex Signals
One of the easiest ways of obtaining forex signals is from a signal provider through software that scans the forex market for trading opportunities or it can be a company that provides trading signals to its clients, often via SMS text messages, Telegram messenger, WhatsApp, email or online platform notifications. Many online brokerage companies also provide trading signals to their customers.
No matter how the trading signals you follow are generated, or if you are just focused on forex trading or also want to trade the stock market, ultimately the most important factor — and the best way to invest in a signal provider — is to find one that gives the most profitable trade signals over a given time frame.
To use a signal provider, you usually just enter orders manually based on what the signal provider suggests to you. Some providers can automatically enter signal orders for you, which can prevent the market moving away from you between the time the signal is sent and when you get around to trading on it.
Our Picks for the Best Forex Signal Providers
Despite the many claims of accuracy found on signal providers’ websites, many signal providers do not publish independently verified results of live trading using their own signals. If you subscribe to this type of service, you’re ultimately responsible for making the signals work for you and must use your discretion when selecting a provider and trading based on those signals.
Best Free Signal Providers
Clients of FOREX.com, which is arguably the best forex broker based in the United States, have free access to the broker’s Advanced Trading Platform tools, which provide trading signals you can use to enter and exit trades, such as Pivot Points.
The broker’s Autochartist tool automatically scans the forex market to highlight trade opportunities you can use as trading signals. It identifies chart patterns that occur in the markets you prefer to trade. It also gives a forecast of what could happen next based on the traditional technical analysis interpretations of those patterns. This is based on how they resolve when trigger points are reached under certain conditions.
FOREX.com also offers a free Recognia technical analysis portal that makes it easier for you to plan trades. It displays short term trading opportunities based on pivot points, support and resistance levels and a diverse range of indicators that technical analysts use.
It gives you a clear and detailed reason why the trade makes sense and even proposes alternatives if market conditions change and displays the trading opportunities on charts in a visual manner.
With more than half a million monthly visitors, Daily Forex takes our second spot among free forex signal providers. Daily Forex publishes daily forex signals for all the major currency pairs and Bitcoin.
Through Daily Forex, each currency pair gets a dedicated page on their website that includes a risk evaluation percentage, times for optimum trading and signals with specific directions to buy or sell at given price levels. Entry, exit and stop-loss price points are provided with each signal.
Forex Signals Factory
This free forex signal provider is truly free, unlike some other signals providers that advertise a free plan and then charge for services in order for the signals to be useful. This signal provider also has an impressive social media following for its type.
Forex Signals Factory provides about 15 signals a day in all the major currency pairs and several other assets. Weekly and monthly signals can also be accessed, as well as technical and fundamental market forecasts. The provider averages 66 monthly signals with a 76% success rate and a risk/reward ratio of 1:3.
Best Low-Cost Signal Provider
MQL5’s signals page is one of the main trading signal resources for traders using the MetaTrader 4 or 5 trading platforms. The site offers a large roster of signal providers who are individual traders you can copy automatically in real time using your MetaTrader trading platform.
MQL5 allows just about anyone to provide trading signals, which might put off some potential users of the service since it is unfiltered. Still, each trader’s performance is evaluated and rated with respect to their return on investment (ROI) over time, number of trades within a given time frame (trading frequency) and the maximum drawdown experienced in their trading account.
In addition to the wide range of diverse strategies, the MQL5 market verifies all of its providers’ trading results, which other forex signal providers may be reluctant to disclose.
The site also provides software to filter the numerous traders by many variables such as ROI, maximum drawdown and net profit. You can do your own filtering to select the best performing traders to copy.
While the service itself is offered free of charge, to get signals from individual traders, you must pay a signal fee of $20-$50 to most of them, although some star traders do ask as much as $500 for their signals.
Forex GDP is our second low-cost selection and offers customers a free subscription plan with up to four signals a month. Calls generate between 90 and 150 pips’ profit. The free signals include basic entry and exit levels that can be received through the WhatsApp social trading network.
The provider offers a free signal service you can try out with two to four trade ideas you can act on each month with a target of 90 to 150 pips. If you want additional features and higher profit potential, its paid plans might suit your needs better.
For a reasonable subscription price of $84 per month, the Premium plan gives you 8-12 trading signals with a target profit of 300 to 700 pips. It also gives you specific entry and exit points and offers email support for as many as 6 more trade ideas in addition to the trading signals.
The Premium plan price goes down to $69 per month for a 3-month subscription, $59 for 6 months and $49 for a 1-year subscription.
For $147 a month, you can get the Supreme plan with 16-25 signals with a target of 700-150 pips. The Supreme plan price declines to $126 per month for 3 months, $111 for 6 months and $99 for a whole year. The Supreme plan also includes signals for commodities.
This signal provider is worth looking into as it’s owned and operated by veteran trader Joel Kruger. The differences between JKonFX and other signal providers are quite impressive, and it caters to novice and seasoned traders alike.
JKonFX’s services are based on six market analysis disciplines that include technical analysis, fundamental analysis, dashboard analysis, a trade journal, trader psychology and bank reports. Each one of these six fundamentals, as they are referred to, get addressed daily via a video presentation or information published on the provider’s website.
The signal provider offers two plans: a $30 monthly plan that includes 5 weekly technical and fundamental analysis reports, at least 1 weekly Market Movers Report and at least 10 Daily Bank Reports. For $45 a month, you get all of the previous offerings plus 3 Trade Finder Dashboards, priority customer service, an Export Trade Journal History and Instant Trade Alerts.
Selecting the right signal provider can impact your potential for profit, so you will want to choose wisely among the best providers according to your needs, budget, trading style and risk tolerance.
Some high-quality brokers like FOREX.com will also provide you with trading signals as part of the free services they offer clients with trading accounts, so check with your broker first to see what they offer before selecting a paid signal service.