Forex investments can bring in a lot of profits but it can be really difficult to find good exit and entry points when you are studying the movements noticed in the market. This is reality as the forex market will always operate and investors will not be able to invest too much time in the study of market movements. Trading signals step in as help. They are basically indicators of selling and buying that will alert a trader about the appearance of good points for entries or exits. Different forex signal services are offering and generating them and you can receive alerts through emails or SMS messages.Automated trading signals from dailyfx is good example and I suggest you to see and try this excellent service.
Forex expert advisors generate signals
Forex Robots use indicators, price levels, modern statistical methods.
There are different indicators that are used in order to generate forex trading signals for entry order or stop-loss or target in EAs:
SMA (Simple Moving Average) – A currency SMA will be obtained by simply analyzing currency charts. A buy signal will be created when we see the price moving above an average line and the sell signals appear when we see prices dropping below average.
MACD (Moving Average Convergence Divergence) – MACD will reflect the link between 2 price averages that are moving.
Volume – If volumes increase then we might have a new trend and new signals appear.
Bollinger Bands – Such bands will reflect market trends changes. When we have a band that shows a tightening of it width then the exchange price of the analyzed currency pair will start to change fast, thus offering new trading signals.
RSI - Relative Strenght index – is oscilator which shows values from 0 to 100. Values above 50 shows bullish trend and below 50 bearish trend.RSI direction and RSI trend lines can be used as very nice trigger for entry order.
Of course there are a lot of indicators and all of them use historical – past performance.
2. Price levels
A lot of them calculate Pivot points and important Fib. levels as well.I will give you one example :
Pivot = (High + Low + Close) / 3
Pivot2 = (High + Low) / 2
Difference = |Pivot – Pivot2|
Pivot High = Pivot + Difference
Pivot Low = Pivot – Difference
3. Another modern statistical methods
You can read Forex Trading using MetaTrader 4 with the Fractal Market Hypothesis and a lot of interesting strategies based on modern statistical tools.
When we buy or make Expert Advisor we need to do this steps :
Step 1 : Install and run EA :
Step2 : We need to test Forex Robots :
Conclusion : Do Forex Robots (Expert advisors) Make Big Profits?
As we can see in this video Expert advisors or forex robots can create profit but it is less than 10%-15% per year.When we test Expert Advisors we need to take in calculation performance in at least 10 years, and risk of 2% per account equity in the moment.
What is your point of view?