Trade signals are indicators or triggers that suggest when to buy or sell a financial instrument, such as stocks, currencies, or commodities. They serve as a guide for traders, helping them make decisions based on specific conditions in the market. These signals can be generated through technical analysis, fundamental analysis, or a combination of both.

In technical analysis, trade signals often come from chart patterns, moving averages, oscillators, or other indicators that point to potential price movements. For example, a moving average crossover might signal an upcoming trend change. In fundamental analysis, signals may arise from news events, earnings reports, or economic data that could impact the value of an asset.

Trade signals can be created manually by experienced traders or automatically through algorithmic systems and trading software. Automated signals are especially popular because they can process vast amounts of data quickly and provide timely alerts. However, no signal is foolproof. Market conditions can shift unexpectedly, and external factors may override technical or fundamental cues.

For traders, signals are best used as tools to support decision-making rather than as guarantees of profit. Combining signals with proper risk management and discipline increases their effectiveness and reduces potential losses.