How to Find the Best Free Forex Trading Signals in 2021

July 15, 2021 04:17 UTC
Reading time: 24 minutes

This article will show you how to find the best free Forex trading signals in 2021. We'll also highlight exactly where you can look for these signals, as well as exploring whether or not free Forex signals are reliable.

It is natural to want to be able to achieve good results in trading with minimal effort and expense. People also prefer to avoid making their own mistakes and will instead rely on someone else's thoughts and opinions. A lot of beginner traders will aim to achieve profit in the market as quickly and effortlessly as possible.

This is why many traders search Google for 'the best free Forex trading signals' or other similar queries. The majority of these traders will be reluctant to pay for premium signals, as they hope to gain profits without any expenditure.

However, it is important to understand that there aren't many good free forex trading signals today, whether you are looking for free forex trading signals in the UK, the USA or any other location.

Usually, finding free accurate forex trading signals can be challenging. The free Forex signals are sometimes not the best signals available. They may not be reliable. One thing to bear in mind is that even if some Forex alerts and trading signals are 'free', they may not be free in the long run, as they could potentially cause you losses.

What are Free Forex Signals?

Free Forex signals are usually short messages containing information that can help guide you in your trading decisions. They can be based on technical or fundamental analysis or other forms of analysis. Forex news trading signals provide signals based on events in the news that can affect the markets. Forex technical analysis signals provide signals to help identify trading opportunities based on technical analysis.

Forex signals are usually sent to traders via emails, SMS, or any other type of communication app, such as Whatsapp. It is also possible to come across forums, such as Reddit, and social media sites, such as Twitter, that display free Forex signals. However, it is important that you always trial these first on a demo account before risking your own capital, as they may not be the best free Forex signals.

What does a signal look like? Usually, it is a very short message that contains only key items, such as:

  • BUY EUR/USD @ 1.1240
  • SL @ 1.1220, TP @ 1.1270

As you can see, the signal begins with the direction of the order. It can be referred to as Buy (Long) or it can be Sell (Short). After this, the trading instrument is shown. It may take the form of the currency symbol 'EUR/USD', or alternatively, a currency nickname like Aussie or Cable can be used. This is followed by the price quotation, which is usually shown in either five or four digits after the dot.

Sometimes free Forex trading software with buy sell signals feature a type of order. This could be a market order (MO), a pending order (PO), or a limit order (LO). You may encounter other types of orders, depending on the broker's platform, or the person or company that is sending out signals. After the first line, you can see another two abbreviations and two quotations.

These are used to identify the points of stopping your trade due to loss or profit. As you can see from the example above SL, which stands for stop loss, is set at 20 pips away, and the TP (take profit) is 30 pips away from the entry price in this Forex signal example.

You will often be able to spot another value at the end of the signal, which is usually abbreviated to TS. This stands for a trailing stop. Not every broker and platform supports this type of order, and, therefore, not every trader can make use of them. However, this is quite a nice feature, as it can enable you to have more flexibility once the signal is sent out.

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It's important to know the difference between automated trading signals vs normal trading signals. Automated trading signals initiate trades for you, while other trading signal subscriptions merely send you a signal, and the choice of entering or exiting a trade based on the information from the signal is up to you. I'll now discuss this in more detail.

Automated Trading Signals vs Normal Trading Signals

Automated Forex trading signals can be one way to buy and sell Forex automatically according to someone else's advice.

The difference between automated trading signals and normal trading signals is that automated ones execute the trades for you. The provider also notifies you when the trade is complete. Additionally, some providers can notify you of factors such as low or high volatility or volume.

Commonly, traders pay for the service and the provider sends you a notification the let you know about the trade.

What's more, is that both beginner and expert traders use automated trading signals. They can also be an effective way to learn a little about analysis. 

While the idea of using automated trading signals may be attractive at first, some people ask if they can be trusted. They can't. This is why it's important to educate yourself on trading and always use sound risk management and trading strategy to guide you in choosing which signal provider and which signals to use. Also, I recommend thoroughly reviewing different brokers to ensure you don't get scammed or incur unexpected losses or fees.

In short, trading signals have both advantages and disadvantages:

Advantages

  • A way to learn about analysis. You'll see the trades being made, the analysis that influenced the trades and their outcome.
  • Earn profits while learning. You can earn money while you are learning about analysis and how to trade
  • Only trade when you need to. This is ideal for swing traders and others who don't or can't always watch the market.
  • Build confidence. Your trades are founded on solid info.
  • Remove emotion from your trading. Your emotions won't influence your trades. Your trades will be founded only on mathematical formulas. 

Disadvantages

  • Easy to get lazy and rely only on signals. Because trades and analysis are done for them, traders may stop analysing the markets and looking for opportunities, themselves. In turn, they stop learning to trade, which is dangerous.
  • Signals aren't always trustworthy. Technical and fundamental signals can sometimes be wrong.
  • The signals may not suit your strategy. Most of the time, you will have to adjust your strategy to the provider, not the other way around.
  • Can be expensive. Be sure to learn about all of the fees your provider charges before you sign up! They may charge you monthly, by the signal, trade or some combination. Remember to factor in how these fees will cut away from your earnings.
  • Viruses and malfunctions can cost you money. System and analysis errors can lead to bad trades and losses.

Automatic trading signals are attractive and useful for some traders, but this article will focus on free Forex trading signals that can be used as a part of your overall strategy.

Forex Signal Authors

There are a lot of websites sharing Forex signals online and social media makes it easy for people to share free and premium Forex signals. There are three main groups of people that are responsible for sending such signals out:

Traders

These groups are shown in the order in which they can be trusted. It is common to find traders who are looking to share their ideas with the outside world. Their main aim in doing so is to earn a reputation for being a good trader, to help out other people and to simply support the community that once supported them when they were new to FX trading.

Usually, it is possible to find traders who are sharing FX signals free on various forums, the most popular one being Forex Factory.

Traders try to send reliable signals by performing their own analysis and providing exactly the same information that they are using in their own trades.

Affiliates

Affiliates represent another group of signal providers. You can usually get free daily Forex signals from this group once you have signed up for an account with a broker using their affiliate link. This way affiliates can still make a commission on the trades you make, but the signals remain free to you.

However, it is important to note that not every person has enough time to support both their affiliate business and their trading activities, so you should be cautious about this group of signal providers. Sometimes the quality of their signals may decline as they put more energy into their own promotion. This is why, before implementing free Forex signals on your live trading account, it is best to always test them first on a demo account.

Scammers

The scammers are the people you should be afraid of, as they are only interested in making an affiliate commission from you, or just making you purchase their 'free' signals. Such providers usually employ quite obvious methods of attracting clients, such as providing a few free Forex signals online and then later asking you to purchase premium signals.

One common Forex signal scam is for the provider to send half of their audience 'BUY' orders, while others will be provided with 'SELL' orders. This way a scammer can split their audience in half - of which 50% are going to be profitable and another 50% will end up losing. So do not fall for scams, as they cannot deliver anything close to the best Free forex signals.

Finding the Best Free Forex Signals

Here are four key things you need to pay attention to when choosing the best free Forex signals:

  • The number of positions. A minimum of 100 positions is preferable to give a good understanding of the signal service over a broad range of market conditions.
  • The risk to reward profile. It is important to make sure that the provider has a positive ratio between the risk taken and the potential profit. As a general rule, a ratio of more than 1:1 risk to reward is favoured.
  • The success rate. To know the behaviour of the signal service, we want to know if the system wins very often (more than 70% of trades) or less often (50% of the time). This is to make sure the signal provider has not just had one very big 'lucky' trade.
  • The number of consecutive losing trades. This is the drawdown or potential loss that can occur when following the Forex signal in question.

These four elements are the most important to study to make an informed decision when choosing the best Forex signal provider.

It's time to look at some examples of free Forex trading signals. Below are three trading signals often searched for:

Forex Price Action Signal

Price action is the analysis of different price movements in a market. Traders may utilize a free Forex price action trading signals indicator to develop an understanding and make decisions on trends, important price levels and appropriate risk management. Identifying trends is often used as the first step in price action trading.

Forex Swing Signals

Swing trading is a type of trading in which traders attempt to make profits from price swings in a specific market. These trades often stay open for a couple of days or weeks. There is no best time frame for all traders.

However, many swing traders use the daily time frame because it sometimes offers large fluctuations in the price and deeper swings. However, traders also use the weekly and the shorter, 4-hour, time frames along with the daily.

There are swing trading signal providers that offer free or $1 one month trials but, at this time, there are no specific free swing trading signals which I would recommend.

Now, I will present some free Forex trading signals that I can recommend to you, which can be easily installed on a MetaTrader trading platform.

Forex News Signals

News moves the markets. Forex news trading signals offer traders a way to automatically get notifications of trading opportunities based on the news.

Modern news trading systems can aggregate many high-performance news sources covering different aspects of the economy into one unified trading software to identify potential trading opportunities. They analyse news events and try to predict unexpected economic events daily. They then share their predictions with their subscribers each day. Some news trading signal providers also include reasons the consensus could be wrong.

Like other types of trading signals, it's also possible to find forex news trading signals for free. But, as it's difficult to determine the reliability of signals from the start, you can apply them on a demo account with virtual currency in real market conditions to test their reliability before using them with your real trading account.

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How to Subscribe to Free Forex Signal Providers on MetaTrader

To subscribe to a trading signal provider on MetaTrader, the following steps must be followed:

  1. Open a MetaTrader trading account for free via Admiral Markets.
  2. Open a free MQL5 account.
  3. Go to the "Signals" tab of the "Toolbox" of the MetaTrader platform at the bottom of the screen.
  4. Choose an MT4 or MT5 signal provider.
  5. Select the payment method, if necessary.
  6. Configure copy settings for your trading account.

On the profile page of a signals provider, like the one shown below, it is also possible to read other subscribers' reviews, which can help you ascertain whether it is one of the best free Forex signals providers.

It is recommended to subscribe to a signal service firstly from a demo trading account, to test the value of a provider before risking your own capital.

Depicted: Admiral Markets MetaTrader 5 - GBPUSD H1 Chart and Signals tab and profile section of a signals provider. Date Range: September 7, 2020, to September 10, 2020. Past performance is not necessarily an indication of future performance.

When you subscribe to a free subscription, the options window opens, as shown below:

Depicted: Admiral Markets MetaTrader 5 - Signal provider subscription options

On this window you will be able to confirm:

  • The name of the signal provider
  • An agreement to the terms of use of the Signals service
  • The confirmation of the subscription to the signal in real-time
  • The ability to copy Stop Loss and Take Profit levels
  • The ability to synchronise positions without asking for confirmation
  • The percentage of the deposit available for the copy trading part of your account
  • The amount in Euro from which you want to stop following Forex signals in case of loss
  • The maximum allowed slippage in pips

Then the FX signal will be directly copied from the supplier to your MetaTrader trading account! It is important to know that you can view FX trading signals from your own MetaTrader platform before you even choose which provider you want to take.

How to Unsubscribe from Free Forex Signal Providers

It's very simple, just click on the red button "Unsubscribe", as in the following image:

Depicted: Admiral Markets MetaTrader 5  - GBPUSD H1 Chart and Signals tab and profile section of a signals provider. Date Range: September 7, 2020, to September 10, 2020. Past performance is not necessarily an indication of future performance.

A simple confirmation is then necessary to confirm the wish to no longer follow the supplier's trading signals, as shown below:

Depicted: Admiral Markets MetaTrader 5 - Confirmation of cancelling signal subscription

Should Traders Use Free Forex Signals?

While you can certainly find free signals online, with some of them potentially being profitable, it is not recommended to do so for beginner traders for two reasons:

1. Not every signal provider will be the best or necessarily interested in your success.

Do not trust people who promise results but are not willing to back this up with proof. If the signal provider is trustworthy, they will not be afraid to share their trading history. When it comes to verifying the legitimacy of a signals provider, it is best to use the historic data from their trading account, which will be connected to a tracking service such as MyFXBook.

2. Trading FX online is an art that should be learnt and mastered, it takes a lot of hard work, but it can be worth it.

Even if you're using the best free forex trading signals that update hourly, you are still not learning how to trade. You are simply relying on someone else.

This can provide you with returns over the short-term, but over the long-term, successful Forex trading comes with a lot of hard work, which is what you should understand before moving forward.

You may, of course, attempt to employ signals in your trading strategy, but this should only be used as a secondary tool. Getting started with signals is not a good idea, as you would be much better off investing your time and trading capital into your own education.

However, if you still decide to look for Forex free signals online, make sure to look in forums. Go for the traders that can provide you with a full and transparent trading history that goes back at least six months.

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