Know when to ignore a Forex day trading signal.
No matter what kind of Forex day trading signal you are using to enter or exit the markets, you must know when it is time to ignore the signal. As a signal will be based upon some kind of mathematical expression, it simply cannot take into account whether or not a major news event is about to happen as an example. Because of this, the trader must be aware of what's going on in the markets at all times.
Although one of the appeals to the Forex day trading signal system is that you can pretty much let it do its own thing, there is actually no way to program into the algorithm when announcements are going to be taking center stage. As an example, perhaps the markets are focusing on some sort of banking issue in Canada. You happen to know that the Prime Minister of Canada is going to be giving a speech to a group of bankers in Ottawa three hours from now. Because of this, you would want to ignore the signal that you're getting right now. Unfortunately for the algorithm, as a way for it to know that the Prime Minister is giving a speech. Also, it couldn't possibly factor in what his speech contains.
Because of the above example, if you enter the markets based upon the Forex day trading signal that appears, you may find that during the speech the Prime Minister says something that rocks the currency markets. As such, you could find that you are suddenly hundreds of pips down.
Forex day trading signal system is simply a tool. And like any other tool, will only be as good as the craftsman that is using it. Similar to the craftsman, you would want to use a screwdriver to cut a 2 x 4, so you would want to use this type of signal to trade ahead of the news.
One of the most important aspects of trading is knowing when the market conditions are not in your favor. The previous example is a common situation over the last few years in the Forex markets. There have been several news related concerns around the world in the United States, Europe, and China. Taking all this into account, a person who blindly follows Forex day trading signals can be quick to lose money if the situation isn't conducive for the two will being used.