A Forex signal is a suggestion for entering a trade on a currency pair, usually at a specific price and time . The signal is generated either by a human analyst or an automated Forex robot supplied to a subscriber of the forex

Foreign exchange market

The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...

 signal service. Due to the timely nature of signals, they are usually communicated via email, website, SMS

SMS

SMS is a form of text messaging communication on phones and mobile phones. The terms SMS or sms may also refer to:- Computer hardware :...

, RSS

RSS

-Mathematics:* Root-sum-square, the square root of the sum of the squares of the elements of a data set* Residual sum of squares in statistics-Technology:* RSS , "Really Simple Syndication" or "Rich Site Summary", a family of web feed formats...

, tweet

Twitter

Twitter is an online social networking and microblogging service that enables its users to send and read text-based posts of up to 140 characters, informally known as "tweets".Twitter was created in March 2006 by Jack Dorsey and launched that July...

 or other relatively immediate method.

Types of services

Services provided fall into four categories:

1. Unpaid/free signals
2. Paid signals from one provider whether by personal analysis or algorithmic analysis
3. Paid signals aggregated from multiple signal sources or 'systems'
4. Signals supplied by trading software located on the trader's computer, also known as a forex robot or EA (expert advisor)

Typical features offered by Forex signal service providers

The main services offered by forex signal suppliers are:

• Exact or approximate entry, exit and stop loss figures for trades on one or more currency pairs
• Supporting graphs and/or analysis for the signals
• A trading history showing the number of pips
  Percentage in point
  In finance, a percentage in point is the smallest commonly quoted change of an exchange rate of a currency pair.The major currencies, except the Japanese yen, are priced to four decimal places. For these currencies a pip is one unit of the fourth decimal point, or 1/100th of one percent...
  
   profit/loss per month and/or the risk/reward ratio and actual trades. Sometimes (especially in the case of forex robots) this may be shown as back-tested results
• One-on-one coaching, or additional interaction with the signal provider such as comments, forum, etc
• Account management whereby a subscriber's account can be traded by the signal provider
• Educational resources either via the internet or phone
• A trial period for a lesser price

Although these are the main features of a signal supplier, not all of them offer the complete list of services.

Scams and fraudulent activity

As forex is popularly touted as a get-rich-quick method there are a number of services that supply signals of debatable quality, which do not answer the users' expectations for profits.

Methodologies and trading strategies

The majority of signal providers focus on supplying signals based on technical analysis

Technical analysis

In finance, technical analysis is security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands...

 and a minority work on fundamental analysis

Fundamental analysis

Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and...

 or price action.
Technical analysis, such as ichimoku and candlestick chart

Candlestick chart

A candlestick chart is a style of bar-chart used primarily to describe price movements of a security, derivative, or currency over time.It is a combination of a line-chart and a bar-chart, in that each bar represents the range of price movement over a given time interval. It is most often used in...

ing, show both short and long term price trends giving the signal provider flexibility in supplying a range of trade options. Fundamental analysis gives longer term trade idea

Trade idea

Trade ideas are investment ideas which are sent by institutional stockbrokers to their clients. They typically propose a trade in a specific stock and are developed by the individual idea author’s Trade ideas (or trading ideas) are investment ideas ("long" i.e. buy, or "short" i.e. sell) which...

s. Price action gives extremely short term trade ideas, often more suited to scalping

Scalping (trading)

Scalping, when used in reference to trading in securities, commodities and foreign exchange, may refer to# a fraudulent form of market manipulation# a legitimate method of arbitrage of small price gaps created by the bid-ask spread....

.