The best live forex signals you can find
On this page you’ll not only learn everything you need to know about how to use our free Forex Signals, but also important things to watch out for when trading these signals.
There are many websites out there that throw random forex trading signals at you and if you’ve been unlucky enough to try them out, most of the time you would have realized that it’s no better than getting a monkey to place the orders for you.
Today we’ll show you what a proper forex signal is and how you can use it (for free).
What makes a good forex signal?
There are a few things that goes towards making a good forex signal. A good forex signal should always have:
- Automated taking of Forex Signals
- A stop loss level
- Recommended risk based on this stop loss level
- What is the recommended risk % for each of our signals?
- A take profit target
- What is a decent risk to reward ratio
- What is our trading signal hit rate and risk to reward ratio?
- Be flexible to changes in the market
- Proper analysis to back it up (versus plucking random numbers from the air)
Automated Forex Signals
One of the most irritating things is to see a forex signal notification pop-up while you’re having dinner or while you’re playing with your kids. You then need to pull out your MT4 mobile (or whatever platform you’re using) and enter the signal – usually done in a rush and trying to figure out what lot size you should be using.
To solve this, we have created a Forex Signal EA what works on MetaTrader 4 (MT4) which you can install directly on your MT4 terminal and it will automatically take the signals for you based on the criteria you have stated.
One of the key things to take note of when using thie auto trade feature of our MT4 Forex Signals EA (expert advisor) is that it needs to be left running on a computer. So preferably you could have it on a Virtual Private Server (VPS).
Customize the asset classes you wish to autotrade
In our MT4 Forex Signals EA, you are able to select which category of assets you would like to follow.
On the left, you can see there are various signals that are generated belonging to these categories:
You can select which you prefer to view and which you prefer to auto trade.
Customize the quality of signals you wish to autotrade
We allow you to customize the quality of signals you wish to autotrade based on a star ranking system. You are able to pick 1-5 stars with 5 stars being the highest quality signals you can find.
Now, we have a lot more 1-3 star signals compared to 4-5 star signals. But of course, our 4-5 star signals are usually more accurate and earn more money than our 1-3 star signals.
So try to strike a balance when you are choosing to customize the quality of signals you wish to autotrade.
Customize the risk allocation for each signal you wish to autotrade
The last thing you would want to do is to adjust the risk allocation for each trading signal that you autotrade. Sometimes you might choose to allocate a default risk % per trade and sometimes you might choose to allocate a default lot size. All of this is automatically calculated by the EA for you when you place a trade.
Our preference is that you let the Forex Signal EA decide for you based on how nice a set up is. In order to do this, the preferred risk allocation method is “Multiplier”. A Multiplier of “1” would allow your signal to copy the risk allocation of the main trader exactly as it is.
A good time to use “equity %” as your risk allocation is if you notice the signal provider is using too high risk for your comfort and you prefer to keep everything default at a certain %.
Stop Loss Level
If a trading signal does not have a stop loss level, that is incredibly dangerous as you could wipe out your entire account if the market goes against you. Also, not having a stop loss essentially means the signal provider refuses to admit he is ever going to be wrong.
In our Forex Signal app (created for MT4), you can see that there is always a stop loss and take profit level that is used by the master trader.
Recommended risk based on this stop loss level
Now that we know that there is a stop loss level in place, that helps us know how much of our account to risk based on this stop loss level.
Not all forex trading signals are equal. Some may be premium forex signals and some could just meet the bare minimum requirements to constitute a trading signal.
To be able to accurately categorize this, we have split our forex signals into 1 – 5 star signals. This lets you know how accurate the forex signals are and their quality (hence their likelihood of hitting the profit target). Some forex signals are really good (they meet 5 out of 5 requirements) but some might just meet the bare basic requirements (eg. 3 out of 5 requirements). Depending on this, we adjust their quality.
What is the recommended risk % for each of our signals?
The beauty of our MT4 Forex Trading Signals app is that we actually have a recommended risk % built directly into each trading signal.
If you look at the table below, you can see that for each signal, there is a risk % that is filled in already based on all the factors we have considered before taking the trade.
How this is decided is purely based on the quality of the signal. The better a signal is – the more we should allocate to it, right? 🙂
Usually, this is how it looks like when it comes to determining the risk allocation for trading signals.
- 1 Star Forex Signal = 0.25% of account equity
- 2 Star Forex Signal = 0.5% of account equity
- 3 Star Forex Signal = 1% of account equity
- 4 Star Forex Signal = 1.5% of account equity
- 5 Star Forex Signal = 2.0% of account equity
We try not to risk more than 2% of an account on a single trade because for any strategy to work, we need the law of large numbers to be on our side.
Take Profit Target
Now that we know how much we wish to risk on a particular trade based on the stop loss level, the next thing we need to do is determine where our take profit target it.
An important thing to take note of when setting your take profit target is to know what your risk to reward is.
What is a decent risk to reward ratio?
For example, if your:
- Stop loss = 10 pips
- Take profit = 10 pips
- Final Risk to Reward ratio is 1:1
Assuming you have a hit rate of 50%, this would ultimately lead you to not making much money over the long run (in fact you might lose more money from commissions).
Assuming our hit rate is the same 50%, but our take profit is adjusted:
- Stop loss = 10 pips
- Take profit = 20 pips
- Final Risk to Reward ratio is 2:1
With this strategy, even though you win only 50% of your trading signals, you would still be a profitable trader.
Now that you have a proper understanding that your risk to reward ratio + your hit rate affects how profitable you are, we take a quick look at our trading signals and their expected hit rate and risk to reward ratio.
What is our trading signal hit rate and risk to reward ratio?
For our trading strategy, we mainly use scalping and day trading strategies. We don’t like to hold positions for a long time.
- Hit rate: 65-75%
- Risk to reward ratio : 1:1 to 1:2.5
- Assets traded: Mainly Forex
- Spread sensitivity: High (this means having a low spread account is important).
- Average length of each trade: from 1 hour (scalping setups) to 15 hours (day trading setups)