How to read Forex signals and trading alerts and place your Forex trades correctly. Below is example of free Forex signal. This one had been placed on Facebook. I am going to explain to you what all the parts of the signal mean.
Sell USD/CHF at CMP 0.9309 SL 0.9334 TP 0.9278
Buy or Sell
That obviously mean that you have to SELL on USD / CHF pair. If there was a BUY shown instead of SELL you would of course have to click on BUY – it’s that easy.
At CMP 0.9309. CMP stands for ‘Current Market Price’. Not all signals suppliers give that value within a signal provided. Usually we understand that the currency pair should be bought or sold at the moment of signal’s issuing and for a current price. Giving this value, however may be helpful, especially in case when you are not at Facebook during a day and receive a signal with some delay.
If CMP is known it will help you to compare the price of the currency pair at the time of signal issue with the actual price at the time of submitting the order.
Then you can still take advantage of the signal. Usually a signal allows a profit in the range of tens of minutes to several hours. l do not recommend to postpone closing of profitable trades for more than one day. Unless the signal supplier indicated clearly that it was a long-term signal.
SL 0.9334 TP 0.9278. Using SL and TP rates you’re able to leave the order without monitoring it. What is the way SL and TP rates work?
TP Stands for Take Profit
Means indicating the maximum rate at which the system should close the order on your behalf. The signal supplier gives you not only the information that you may BUY or SELL a particular currency pair at the moment, but also provides information for what value the rate will rise/fall. The TP is given with some margin.
SL Stands for Stop Loss
The stop loss is give control over losses. Just in case the signal turns out to be unfavorable because of a sudden change in trend. Even the best traders are not always able to foresee everything. For such a case the value of stop loss is given. Setting the S / L rate means that the terminal will monitor Forex price action and close the position, if the exchange rate reaches the stop loss level. This allows minimizing losses related to unfavorable changes in the exchange rate.
Sometimes you are lucky and the entry price has moved to a point where the you can get an earlier entry or later entry. You can move the stops and targets to adjust for that. Alternatively you can enter if the risk return ration is still favourable.
Hope this helps you take advantage of some of the free Forex signals that can be found on the net.