How Do I Analyze Signals? - How Do I Trade with Signals?
How to Read Trade Signals
To trade using signals, beginner traders should learn how to generate these trading signals.
Generating signals to trade with isn't easy and will require you to learn a lot of forex analysis knowledge and practice this knowledge & these trading concepts until you get the experience required to start trading.
A good way of generating signals is to use a system. Then open a free practice practice trading account & test your system & trading signals on this demo account risk free without risking your money - then once you have tested your system & trading signals and they are profitable on the demo practice account you can then use these trading signals to trade on a live account.
The method of how to generate these trading signals as well as how to practice trading with these trading signals on a practice account using the MetaTrader 4 platform is discussed below:
So, How Can You Generate Signals?
The best method of how to generate signals is through a systems, You can Learn how to create trading systems from the learn lesson - how to develop trading systems on the right navigation menu of this learn website - www.tradeforextrading.com - under the tutorials Key Concepts.
A trading system is a combination of 2 or more indicators with a set of written rules of how these indicators will be used by a trader to generate signals.
For example, one of the simplest system is known as MA cross over strategy. A buy signal or a sell signal is generated when there is a crossover of the 2 moving averages: either a buy signal is generated for an upward MA cross over or a sell signal is generated for downward moving average crossover.
How Do You Interpret Signals?
The trading system example explained below shows a system using the above MA cross over strategy combined with the RSI indicator & MACD indicator to generate buy & sell signals.
How Do You Analyze Signals?
When generating buy signals and sell signals - traders should use simple systems to generate these buy & sell signals.
How Do You Interpret Signals?
How Do You Trade with Signals?
An example of a simple system that works, is one that is a combination of:
- Moving average cross over strategy
- RSI indicator
- MACD indicator
The written set of rules used to generate the signals are:
How Do I Interpret Signals?
Forex Trade Rules:
Buy Signal gets to be Generated when:
- Both Moving averages moving up
- RSI indicator value above 50
- MACD indicator above the center line
Sell Signal is Generated when:
- Both Moving averages moving down
- RSI indicator value below 50
- MACD indicator below centerline
How Do You Interpret Signals?
Exit Signal
Exit signal is generated when MA indicator, RSI indicator & MACD indicator give a signal that's in opposite direction.
The chart time frame to use is 1 hour chart time frame or 15 minutes chart time frame depending on what type of trader you are and also your schedule.
For a beginner trader the above written system & set of rules will generate good buy signals and sell signals - the only thing that a trader needs to do is to have the discipline required to follow the written signals rules the exact way they are written on their system rules, & wait for a buy signal or a sell signal to be indicated by the system & only open a trade after the trading signals have been generated, not before the signals are generated.
How Do I Read Signals? - How Do I Interpret Signals? - How Do You Read Signals? - How Do I Interpret Trade Signals
