Forex Trading Signals
Whatever type of commodity you trade in the world today, there are always indicators that you look for when you are deciding to either enter a trade or get out of one. Many people use mathematical indicators and many people use non-mathematical indicators when they are looking at when they should enter or exit a trade and all of these are still signals that they use. Any sort of indication or trigger that causes you to take a specific action in terms of a trade is a signal. Forex trading signals are just as prolific in their existence as trading signals for any other type of investment scheme and for that reason many Forex traders utilize a vast number of different signals in order to get the results that they want.
Forex trading signals are frequently divided into their mathematical (quantitative) and non-mathematical (qualitative) categories and in order to have a good grasp of the basics of Forex trading signals it is important to understand exactly what both of them are. A mathematical Forex signal is something that is triggered by either the movement of a specific pip value or alternatively a trend that has just displayed itself. Many traders prefer mathematical signals because quite frequently these are signals that will allow people to initiate and exit trades without any decision on their part. In other words, a mathematical signal might be something along the lines of if A happens, then do B. It is automatic and requires no interpretation and that is what makes it so appealing.
One good example of this is the trend signals that many people use. One particular trader for example looks at the price of the EUR/USD pair every single day and if on day 1 the pair goes on one direction more than 40 pips and then on day 2 it goes in the same direction at least half as much as it did on day 1 then he enters a trade in that direction. This does not leave any room for interpretation; it is an automatic system in terms of the decision making. Fibonacci sequences are another example of mathematical signals that also make good Forex trading signals.
Non-mathematical Forex trading signals are the types of things that are open to interpretation in a large sense. When a person uses a non-mathematical signal what they are essentially doing is looking for an event from another website that they think will be a good indication of the direction the price for a specific currency pair might go. For example, if there is a significant closing loss in the New York Stock Exchange, then it might herald a subsequent weakening in the US dollar relative to the European or British currencies and that in turn might give a person the signal they need to enter into a trade for those currencies. Non-mathematical signals frequently come from news websites and people that follow news sites closely frequently also use non-mathematical Forex trading signals.