How to read a forex signal
A forex signal contains five pieces of information: pair, direction, entry, take profit, and stop loss. Reading it correctly means understanding each number and what action it maps to in your broker.
The five fields of a signal
- Pair: which two currencies are traded. EUR/USD, GBP/USD, XAU/USD (gold).
- Direction: BUY means open a long position. SELL means open a short position.
- Entry: the current market price at signal time. Open your trade near this price.
- Take Profit (TP): the target price. Set a limit order here to close the trade in profit.
- Stop Loss (SL): the risk limit. Set a stop order here to cap your loss.
Reading confidence and rule count
SignalsTrades shows a confidence percentage and lists every rule that fired. A signal with 7 of 12 rules agreeing on BUY is more reliable than one with 2. Confidence above 75% represents strong algorithmic agreement.
What NEUTRAL means on a rule
NEUTRAL means that specific rule found no strong evidence for BUY or SELL. For example, RSI between 35 and 65 is not extreme in either direction, no signal. NEUTRAL rules do not add to confidence, they abstain.
Is TP or SL in pips or price?
SignalsTrades shows TP and SL as actual prices, not pip distances. Enter those exact numbers into your broker's order form.
What is a good risk-reward ratio?
SignalsTrades targets 1:1.5, meaning if you risk 1 unit to SL, you target 1.5 units to TP. Over many trades, this means you can be profitable with a 40% win rate.