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How To Use Forex Trading Alerts Wisely

By : Ryan Lee Daniels
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What exactly is a forex trading alert? How do you use them? Why would you want to use them?

Different Types of Forex Trading Alerts

Forex trading alerts come in various definitions and forms. The most common are:

A Signal Alert Service.

A trading platform alert that informs you that a particular price level has been hit in the forex markets.



Signal Alert Services

Both are particularly useful, depending on the type of trader you are. If you are already an experienced trader, having an alert service is just having another "trade opportunity finder".

Once you receive an alert, you'd still check the particular trade to see if it meets your criteria and if you're willing to risk your money on it.

What causes most new traders grief is the assumption that forex trading alerts are the "Holy Grail" of trading. Surely, with an experienced team of traders watching the markets, you can't lose, right?

That thinking works great until the first loss hits. Then the first signs of the reality of trading starts to creep in and causes doubt. And hopefully, you learn quickly enough the basics of trading that you never risk all your trading capital on black box services and on any particular trading strategy.

Then how do you actually go about using Forex Trading Alert Services?

How to use Signal Alert Services

Signal Alert Services should be seen as additional sources of trading opportunity finders. If it's a black box system, where you don't know how or why a particular trade has been flagged for a buy/sell, you won't even know why you win or lose on that particular trade.

The emphasis for any new trader is not to look to Signal Alert Services for making money, but to use these services to learn as much and as quickly as possible. The benefits of this are:

You make their knowledge YOUR knowledge.

When you make a winning trade, you can repeat it.

When you make a losing trade, you don't repeat it.

If the Signal Alert Service closes down, the knowledge and skill remains with you.

Once you know the why and how a trade opportunity is found, these Forex Trading Alert Services become a tool to help you in saving the time and energy in searching for these trades yourself.

Remember, these Forex Trading Alert services are supposed to help you, not to make you a slave to them.

Forex Trading Platform Alerts

Forex Trading Platform Alerts are simply tools on the trading platform that you use to alert you if a particular price level has been hit. Once that price level has been hit, a sound or pop-up alert goes off to inform you to take a look at your trading platform.

Another function of a Forex Trading Alert is to inform you of a certain time being reached.

How do you use these types of Forex Trading Alerts?

Trading Platform Trading Alerts can be used according to what you want to be alerted for. Since the basic alert is to inform you that a price level has been hit, you have to determine why do you even want to be informed about a particular price level being hit!

The main reasons for price levels are:

Hitting Support or Resistance Price Levels

Triggering A Particular Trade Entry or Exit (if you're not using Stop Orders)

Nearing specific price levels where you want to decide if, and what, kind of action to take

The main reasons for specific times are:

Opening and Closing Hours of the various markets around the world

Signaling the time when a particularly big news announcement being released

For each type of alert, the basic function is to inform you of a particular time or event happening. You still have to make the decision of what you want to do, which requires you to have trading rules and trade selection criteria.

Summary

Forex Trading Alerts are designed to be tools to help you as a trader. Either in saving you the time and energy in finding trade opportunities, or to inform you of any particular actions/decisions that you might want to make as price or time approaches a particular value.

Remember, you're the Trader, and everything you use should be your tool to make you a better trader and make you more money.

About the author:
Ryan Lee Daniels runs a website dedicated to Forex Trading Education.


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