Forex signals explained: how to use signals in your strategy

Forex trading
Rebecca Cattlin
By :  ,  Financial Writer

Never miss an opportunity with forex signals, a quick and free way of identifying short-term currency trades.

What are forex signals?

Forex signals are alerts or messages that contain data-based information to help traders make decisions about what positions to take and when. They’re usually based on technical analysis and historical price action but can also be based on fundamentals.

For example, this is what forex signals look like on the City Index platform:

Forex signals

 

You see the market name, the direction – buy or sell – and the levels for an entry point, stop loss and take profit. You’ll also be able to see how each signal has performed the last ten times it was triggered, to give you an insight into the win rate.

Forex signals are in-platform tools, but you can usually choose to receive an alert can via email, SMS or push notification, depending on your preference.

 

Are forex signals worth it?

Forex signals are worth using if you’re interested in a more statistical and algorithmic means of making decisions about your FX trading positions. This can enable you to be more rational and rely less on emotions or spur-of-the-moment decisions.

Using signals can be a great way for newer traders to build confidence and learn more about taking positions but are equally handy for experienced traders who want to spend less time monitoring the markets.

What’s important is to never get too reliant on signals and stop doing your own analysis too, especially as no signal will be 100% accurate all of the time.

 

Are forex signals free?

Yes, forex signals are free with City Index. When you sign up for a City Index account, you’ll be able to use our SMART Signals straight away.

If you’re looking at forex signals with a different provider, you’d have to check their offering. Some will charge for using signals – this can be monthly or each time a signal is used.

 

Using SMART Signals with City Index

Our SMART Signals are based on an automated algorithm that monitors 23 global FX pairs – as well as 10 major stock indices and gold. They use thousands of data points spanning years of price movements to identify reoccurring patterns that can be used to make decisions.

The forex markets that are included in the SMART Signals algorithm are:

  1. EUR/USD
  2. USD/JPY
  3. GBP/USD
  4. USD/CHF
  5. USD/CAD
  6. AUD/USD
  7. NZD/USD
  8. EUR/GBP
  9. CAD/JPY
  10. EUR/CAD
  11. EUR/JPY
  12. EUR/NZD
  13. GBP/CHF
  14. GBP/JPY
  15. AUD/CAD
  16. AUD/JPY
  17. AUD/NZD
  18. CHF/JPY
  19. EUR/AUD
  20. GBP/AUD
  21. GBP/CAD
  22. GBP/NZD
  23. NZD/JPY

Once the algorithm has found a price pattern that’s been historically successful, you’ll be able to see the signal in the SMART Signals dashboard. But it’s important to note that past performance is no guarantee that the market will repeat itself, so it’s vital to protect your positions.

The City Index SMART Signals dashboard will show an auto-populated trade ticket, with set take-profit and stop-loss levels to manage your risk.

Each signal is a short-term potential trade over a specific timeframe – which can be 4, 6, 8, or 12 hours. You’ll be able to see how long each signal has left until the opportunity expires and can even receive alerts for your chosen markets.

Learn more about our forex signals

How to get forex signals

You can get forex signals on both the City Index web and mobile platforms. If you don't already have one, you'll need to create a City Index account, then follow these steps.

For the web platform, you’d need to:

  1. Log in to your account
  2. Select ‘SMART Signals’ from the tab at the top of your workspace

For the mobile app, you’d need to:

  1. Log in to your account
  2. Select ‘More’ – located in the bottom right of your mobile screen
  3. Click on ‘SMART Signals’

This will take you to the SMART Signals dashboard, where you’ll be able to see all the signals sent out over the last 48 hours, all your live signal trades and the historical performance of any signals.

Related tags: Forex Insights trading

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