Forex Trading Signals
Forex trading signals are what cause traders to enter the market, it is the signal that ultimately tells you to go ahead with the trade. So, it sort of goes without saying that you want to trade only the best and highest-probability forex trading signals. Yet, many traders take very low probability trading signals because they don’t have enough patience or know-how to wait for the most profitable forex signals. There are certain conditions that you want to watch for in the market to make sure the forex trading signals you take give you the best chance at getting into a profitable position.
• Forex trading signals in trending markets…
Perhaps the highest probability forex trading signals are the ones that occur in the context of a trending market. Markets trend for a variety of reasons, some of these are fundamental (meaning economic / news events) and some of them are technical, this means that a trending market has many underlying reasons for why it is trending, which of course makes it a higher probability vehicle to trade than a market that is not trending. Non-trending markets do not necessarily have both fundamental and technical drivers; they may simply be range-bound and essentially waiting for a reason to start trending.
Knowing this information, it makes sense to look for forex trading signals in trending markets, because it means we are automatically increasing the odds of the trade ending profitably simply because we traded with a trending market. Yet, many beginning and inexperienced traders continue to bet against trends by trying to “play the hero” and pick exact tops or bottoms of a trending market. Essentially, when you trade against a trend like this you are purposely taking low-probability forex trading signals, it seems a bit silly when you think about it like this, but this is exactly what many novice traders do every single day in the markets.
• Forex trading signals with confluence…
Confluence, as it applies to trading the forex market, essentially means an area in the market where multiple factors come together and add weight to any forex trading signals that might form near there. Now, a forex trading signal by itself is not necessary a high probability trade setup, but it is actually where the trade signal occurs in the market that can make it a high probability forex trade signal. So, for example, if you are trading the pin bar setup on the daily charts, you might want to look for a pin bar forex trading signal that forms in a trending market and at a strong horizontal level, 50% retracement, or moving average level, all of these would be considered factors of confluence, and the more of them that align with your forex trading signals, the stronger the signals become.
As you become a more experienced trader, you will begin to get better at spotting forex trading signals at confluent levels in the market. Once you reach a level of mastery of one quality price action trading setup, you will be able to analyze a price chart for only a few minutes and almost instantly be able to tell if there are any of these forex trading signals worth taking or not. This is called a “perspective” on the forex market, and you can develop this perspective by learning to trade with price action, it is something you will continue to work with and improve upon as time goes by.
• Forex trading signals on higher time frames…
Trading the higher time frames is one of the most accurate ways to trade, the forex trading signals that occur on the 4 hour chart and higher are inherently higher probability signals than those that occur on shorter time frames. Higher time frames essentially act as filters of market “noise”; this noise is what we call random price movement that occurs on the lower time frames. If you think about it logically for a minute, it is very obvious that as you decrease the time frame, any forex trading signals will become less significant, simply because they have not occurred over a long enough period of time to signify anything meaningful.
For example, a pin bar rejection on the daily time frame is showing that price failed to close above a level in the market over a 24 hour period, meaning this level is obviously significant and the pin bar signal has good chance of affecting price for at least another 24 hours. Now, a pin bar setup on the 15 minute chart might also affect price, but it’s affect will likely be minimal at best, to sum it up, as you move lower in time frame, any forex trading signal that you take decreases in significance, getting closer can closer to just a purely random gamble as you move down in time frame.
• Forex trading signals education…
In order to learn how to spot the best and highest probability forex trading signals, it is important that you obtain a proper forex trading education from someone who teaches traders how to trade forex trading signals from confluent points in the market. If you don’t know what you are looking for, you will not begin on the right track and you will eventually end up somewhere you don’t want to be. It is the same way with forex trading; if you want to become a consistently successful forex trader who only takes high probability forex trading signals, you will have a much easier time achieving this goal if you learn from a professional forex trader.
When you take Nial Fuller’s forex trading course, you will learn what a high probability forex trading signal should look like and where it should occur at. You will not learn a mechanical trading strategy that involves no effort on your behalf, instead you will learn to “fish for yourself” in the market by developing your own forex market perspective built upon price action trading principals. Having an experienced and profitable trader show you exactly how he trades and the forex trading signals he takes is the most effective and efficient way to learn how to trade the forex market.