Prices in Forex markets are the most volatile of any trading instrument. They change farther and faster (on average) than stocks and bonds, though commodities can be pretty roller coaster, too. This presents non-full time investors with a dilemma: either sit by a computer monitor all day, looking for price movements in real time or potentially lose a lot of money. But there's a way out - Use signal services.
Forex signals are buy and sell indicators based on technical analysis. Technical analysis uses historical price and volume data to statistically analyze trends. The aim is to zero in, with a explicit probability, the odds of future price movements.
A signal may be as simple as 'Buy euros now at 1.1901'. Those signals are presented in any number of ways, by email, SMS text message to a mobile phone, IM message etc. Some are simply flashing text and/or icons on trading software. The software system incorporates built-in algorithmic rules that use the formulas of technical analysis, aggregates it with current market data and produces a signal.
For instance, one generally practiced technical indicator is something called MACD (Moving Average Convergence/Divergence). Without getting in particulars here, it uses the moving average - the change in an average price over time. A signal can be returned when the value of MACD crosses above (or below) a pre-determined threshold. Buy when it moves above the line, sell when it falls below.
For more on and a free course see Forex Master Trader
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