Training Center

Trading Signals And Robots

When you are trading forex – or any other asset – you need to stay connected to the markets. The chances are that you won’t have time to monitor every open trade or closely follow the movement of relevant assets. This is especially true for mobile traders who login and out of the trading platform when it’s convenient. Trading signals are technical indicators that advise clients when to buy or sell a particular instrument. The signals are either generated by a specialized trading robot or by professional analysts. Signals generally include specific times and prices to help traders schedule their trades.
Usual Trading Signals

Bull or bear pennants

Rectangles, triangles and wedges

Head-and-shoulders chart patterns

The advantage of signals
Traders receive timely alerts that allow them to manage a broad range of assets over multiple time scales. Good quality signals will alert them to market anomalies such as abnormal volumes, options activity and short interest. Signals can be conveniently received via SMS/messaging, internet, platform alerts, email and over social media.
How to use signals effectively

It’s important to remember that signals are just recommendations to trade, alerts about market conditions or predictions of possible market outcomes. They are not guarantees that an asset will perform in a particular way, or that a predicted situation will develop. You should always balance signals against your own technical and fundamental analysis.

Robots are powerful tools that use sophisticated trading software to analyse market movements. Their algorithms and increasing use of artificial intelligence are making them popular with many traders and they are a feature of most trading platforms. Robots can also automatically trade the markets according to parameters chosen by the user. Robots typically identify new trading opportunities, execute orders, exit positions, apply stop-losses and generally practice the desired level of risk management.

As with signals, robots should be regarded as potentially useful tools that can help to increase trading opportunities and allow for convenient management of your personal trading schedule. They should never be regarded as infallible or as a substitute for effective fundamental and technical analysis. Even as trading tools become more sophisticated, new traders should always learn the very basics and understand the principles behind each tool.

Why use automated trading?

1. A robot is not distracted by emotions such as stress, excitement, greed, anxiety or feelings of tiredness; problems that every human trader faces. They function in response to received data and will implement strategies as instructed.

2. Automated trading can be run against historical data to test the value of a trading strategy.

3. Automatic trading gives investors 24 hour access to any open market.

4. Traders are not limited to a single account, platform or just a few open trades.

How to use Automated Trading Effectively

1. Although automated trading is highly sophisticated, it is still vulnerable to system failures, computer crashes, and power losses etc. You should never rely on it entirely.

2. Trading systems that are developed using back testing can look great as theoretical models, but they can fail under real market conditions.

It’s important to use your demo account to learn how to trade effectively with automated systems, robots and signals. It’s also worth talking to your account manager and asking for one on one trading sessions if there is anything that you don’t understand.

Use your judgement when you choose signals
Although trading signals and robots can be a really useful tool for identifying opportunities, and for helping you to manage your trades, they are not trading for you. There are a lot of different auto tools on the market and you should use your judgement when you choose them. It’s important to test any signals carefully and analyse how they affect your trading results. If a broker promises that their signals or robots can make a guaranteed profit, you should treat them with caution.