Are Forex Signals Worth It? Top Pros and Cons

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Forex signals have transformed the idea of trading and successfully addressed the most challenging task that each trader faces: finding the right trading opportunity at the right time. Historically, using them has dramatically increased the success of traders, regardless of their experience level. In addition, expert traders also utilize Forex signals to broaden their expertise and increase their profit opportunities. So, to help you enhance your trading game, the experts at TU have created a summary of the advantages and drawbacks of using Forex signals and have also selected the top Forex signal providers.

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Forex signals - Are they effective?

You've probably seen dozens of forex signals advertised online and wondered if they work. The answer to this depends on the signal provider and how you trade their signal. Many signals are hardly more than random noise, while others can be highly effective. The trick is to find a signal that works for you and then trade it correctly. Let’s now get into the list of pros and cons of using Forex signals and reputed signal providers.

Should I use Forex signals? Top pros and cons

If you are new to forex trading, you may wonder if you should use forex signals. Forex signals are a tool that can be used to help you make better trades. Here are some of the pros of using forex signals based on expert opinion:

1. They can take emotion out of trading:

One of the biggest reasons why traders lose money is because they let emotions influence their trading decisions. Fear and greed are two of the most common emotions that can lead to such results. Forex signals can help take emotion out of the equation by providing a mechanical way to enter and exit trades. Experts suggest that those who can follow the signals without emotional interference have higher chances of improving their trading results.

2. They help provide an element of objectivity:

When you are trading forex, there are a lot of things that you need to take into account. For example, you need to have a good strategy, know when to buy and sell, and be aware of the risks involved. With forex signals, you can see the market objectively and know when to buy and sell. This sets the base for a trader who can then further refine their trading game.

3. They can help in diversifying your trading:

Many traders only trade a few currency pairs, often because they feel comfortable with them or because they have had success in the past. However, this can lead to problems if the market conditions change and those pairs no longer move in the way you expect them to. By using forex signals, you can trade a more comprehensive range of pairs, which can help you diversify your trading elements and reduce your risk.

4. They add structure to your trading:

One way that forex signals can add structure to your trading is by alerting you to potential trades. For example, if you are looking at the EUR/USD pair and you see a buy signal, you know that there is a potential trade opportunity. You can then look for confirmations for the signal and trade it. This can help you be more systematic in your approach to trading.

5. They help you save time:

Forex signals can save you time by taking the guesswork out of determining when to buy and sell. In addition, you can be alerted to potential trading opportunities as they arise with a good signal. With these signals, you may also accelerate your learning curve because analysts can better highlight your target and stop-loss price points and explain the reasoning behind the trade.

While signals can be helpful, there are also some potential drawbacks that you should be aware of before using them.

1. They are not always accurate:

One of the reasons that Forex signals are not always accurate is that the market is highly volatile and ever-changing. This means that the market may move in the opposite direction, leading to a loss-making trade. No matter how good the track record of the person or system providing the signal is, there is always the potential for error.

2. They can be expensive:

The cost of forex signals can vary widely, from free to hundreds of dollars per month. Some providers charge a monthly fee, while others charge per trade. Some signals are provided by automated systems, while others are generated by analysts. The cost of forex signals should be considered when determining whether or not to use them.

3. Latency Issues and Slippage:

Slippage is the difference between the price you expect when you place a trade and the actual price that is executed. Because prices are constantly moving, there is a greater chance that your order will not be completed at your desired price. If there is a delay between the price at which you get the signal and the price at which you execute it, you could land in trouble and face undesirable losses.

Are Forex signals trustable?

A forex signal's goal is to provide traders with precise information so they may maximize their profits from forex trading. They are spread out over the four different trading zones. Thus even little changes might result in significant variations in profit prices. In addition, the signals take into account real-time data such as bank information, global news, and market trends.

That being said, there are legitimate forex signal providers present in the market. Experts suggest doing your due diligence before choosing the one whose signals you would follow. In addition, you should also gain your own knowledge and know how to filter out forex signals before executing a trade.

How to check if Forex signals are worth it?

Before we start using Forex signals, let's ask ourselves an important question - are they really worth it? After all, there are a lot of investment opportunities out there, and it can be hard to know which ones to trust. TU experts have listed down the ways to check the legitimacy of forex signals.

1. Look for a demo version or a free trial

A trial version of a forex signal service allows potential subscribers to test out the service to see if it matches their trading style before committing to a paid subscription. This is an important consideration, as not all signal providers will be a good fit for every trader.

2. Back-test

Backtesting is one of the most important tools a trader can use to find the best forex signal provider. By back-testing, traders can know how the past signals of a forex signal provider turned out. This can highlight their true accuracy and guide traders toward the final decision.

3. Check the win rate of the signal

Forex trading is a precarious investment, and choosing a forex signal provider with a good win rate is important. A high win rate indicates that the provider is making sound investment choices, and it will give you the best chance of making profits.

How to choose reliable Forex signals provider?

TU experts have also created a guide to assist you in making your selection regarding a trustworthy FX trader:

Step 1: Figure out if you want a free or a paid Forex signal provider:

You must first choose whether to use free signal providers or pay for a premium membership. Each has advantages and disadvantages, and your decision may depend on how seriously you approach your forex trading journey.

If you're only interested in investing small sums of money, free signal providers can be more beneficial for you. However, if you want to invest heavily, you should consider the paid signal providers who offer various other services.

Step 2: Check if your provider offers a free trial:

If you decide to invest in a premium subscription, judge the service and its result through the free trial first. For example, many forex signal providers will provide you with free trials so you can assess whether they are the best signal provider for you. You may set up demo accounts with these free trials and use their data for virtual trading without worrying about losing real money. If the results are positive, you can go ahead and take the premium subscription as well.

Step 3: Test out the signal on the FX market:

You can test out the forex signals on the markets and determine the signal's accuracy and reliability. Trial accounts should be utilized to assess the signal accuracy and your ability to react to that particular signal system. Keep in mind that you must choose a signal provider who's not just accurate but also fits your trading style.

Step 4: Compare and contrast other signal providers:

You can begin comparing your providers when you've decided what you want to search for. Examine the services each one provides and read reviews to find out what other traders have to say about their accuracy and dependability.

Best Forex signals providers

With so many different providers, how do you know which ones are the best? Here are our top picks.

1. 1000pip Builder

1000pip Builder is one of the top Forex signals providers and has established a very strong following from traders. The long term performance of the signals has been outstanding and what is most impressive is that the results have been independently verified by MyFXBook. 1000pip Builder is the highest-rated Forex signal provider on TrustPilot, with numerous 5-star user reviews. Members of this service have been particularly impressed with the accuracy of the Forex signals and the 1-to-1 support provided by the lead trader, Bob James. If you are looking for accurate Forex signals with additional mentoring from a professional Forex trader, then 1000pip Builder is your best option.

2. RoboForex CopyFX

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RoboForex is known for its diverse services for trading automation. The CopyFX platform is one of the best ways to earn a profit in the Forex market. The social platform allows traders to subscribe to signals of the most successful RoboForex traders and copy their trades automatically. Judging by the reviews of Traders Union clients, it is currently the most effective provider of Forex signals for earning a profit. In order to receive signals, all you have to do is to follow the Get Signals link above and to learn more about using this service read out review.

3. AvaTrade

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71% of retail investor accounts lose money when trading CFDs with this provider.

AvaTrade is yet another big name in the online trading platforms industry. It's also considered as one of the leading only brokers that offers some unique and amazing features. It offers both manual and automated signal providers, and you can choose both of the options at the same time as well. AvaTrade works with a range of third-party forex trading signal providers, and you can start getting it today without even paying any fee.

4. eToro

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eToro is one of the best online brokerages out there, and it's the best option when it comes to forex trading signals. What makes eToro different from the rest of the providers is its method of sending signals. The platform employs a copy trading system that the users can use to copy the forex exchanges of professional traders with the help of a few clicks instead of sending the forex signals directly to each user. This way, not only can the user select the people s/he wants to follow for copy trading, but it also saves a lot of time and effort that you must spend otherwise on forex signals manually.

5. Learn2Trade

Learn 2 Trade is a dedicated and premium online platform especially built for providing forex signals. It offers forex trading signals to its users via an exclusive Telegram channel. It not only offers real-time signals but also covers all the reputable and major financial markets of the world. You mostly get about three to five verified and valuable signals each day. This is one of the top services today, offering an excellent combination of Forex signal accuracy and great usability of the platform. Learn2Trade is also the best option for beginners taking their first steps in trading.

FAQ

What is included in a Forex signal?

A forex signal can give you information on which currency pair you should trade, whether you should buy or sell, the entry point, the target price, and the stop-loss value.

Are there free Forex signal providers?

There are several free Forex signal providers available online. However, it is essential to remember that not all providers may be reliable. Therefore, it is important to do your research before signing up for any service.

Where will you receive a Forex signal?

There are numerous places to receive Forex signals, including online forums, Telegram and WhatsApp groups, etc.

What is copy trading?

Copy trading is a type of trading that allows investors to copy the trades of other more experienced or successful investors. It can be used to trade various assets, including stocks, forex, and commodities.

Team that worked on the article

Chinmay Soni
Contributor

Chinmay is a certified Investment Analyst and Portfolio Manager by the National Stock Exchange (NSE) Academy. He is currently associated with a $75 million VC fund and assists them in identifying and researching investable sectors and start-ups. He has completed his Bachelors of Business Administration from the Institute of Management, Nirma University and is currently pursuing MBA majoring in Finance from the same. He has 4 years of hands-on investment experience in a variety of asset classes and his professional qualifications include being a CFA Level 2 candidate and NSE Certified Market Professional Level 2.

He finds writing as a way to express his thoughts and share his knowledge with people eager to learn. He himself happens to be an avid reader of personal finance books and on top of his recommendation list are the international bestsellers ‘The Psychology of Money’ and ‘Think and Grow Rich’

He has this one strong belief as his motto: Life is what you make of it.

Dr. BJ Johnson
Dr. BJ Johnson
Developmental English Editor

Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.

The topics he covers include trading signals, cryptocurrencies, Forex brokers, stock brokers, expert advisors, binary options. He has also worked on the ratings of brokers and many other materials.

Dr. BJ Johnson’s motto: It always seems impossible until it’s done. You can do it.

Mirjan Hipolito
Cryptocurrency and stock expert

Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.