What Is A Forex Signal?

Most new traders struggle when they first start out. Many are unaware that there are signals that will let you know when to make your trades.  A Forex Signal is an indication that one or more currencies are going to move.

This movement creates an opportunity to make money if the investor correctly reads the market information.  These signals are triggered by news and economic data or by the pattern of the currency movements on charts called technical analysis.  Both of these methods are used to manage the various investment accounts.

forex signal

There are signals that are given off that can tell an investor which way the market is likely to move. Many millions are gained and lost every day by investors watching the forex signals.

As the currency marketplace pairs the currency of one country with the currency of another country, economic data moves that market.

For example, in the Euro/US dollar pair, high unemployment in the United States makes the value of the Euro rise and the value of the US dollar decrease. New growth in US jobs could increase the value of the dollar and savvy investors can make money off of the forex arbitrage.

World news causes individual prices to fluctuate.  Any uncertainty like changes in government, civil unrest or policy changes create market movements.

As the price of commodities change, countries exporting and importing that commodity have immediate changes in the values of their legal tender.

For Canada, an oil-producing country, higher oil prices is a boost to the Canadian economy; whichever money is paired with the Canadian dollar can drop in value.

The action of the currency pair on a chart creates technical indicators. These investors look for recognizable patterns that will forecast market movement.  Common indicators are Elliott wave, head and shoulder, candlesticks and pivot points. These patterns provide signals for this investor to enter or exit the market.

The Forex market attracts all types of investors who use these signals and all types of investment funds including IRAs. Some people enjoy making their own decisions and decide to self manage their account.

Others use the advice of currency brokers authorizing them to buy and sell currencies. Managed forex accounts are perfect for investors choosing to leave all the decisions to a qualified broker; IRAs are included in these managed accounts.

If the fast paced trading and gambling nature of the forex market is not appealing to your own investing style there are other investments to consider that are more conservative such as annuities and structured settlement investing.

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