Short answer: A forex signal tells you the pair, the direction (buy or sell), the entry price, a stop loss (where you're wrong) and one or more take-profit levels. Before you copy it, work out your lot size from the stop loss so you only risk 0.5% to 2% of your account.
FXRAID is an Exness partner and may earn a commission if you open an account through our links. Trading on margin is high risk. This guide is education, not financial advice.
A typical signal, line by line
XAUUSD BUY LIMIT
Entry: 2,395.00
SL: 2,388.00
TP1: 2,405.00
TP2: 2,415.00
Risk: 1%
| Line | What it means |
|---|---|
| XAUUSD | The instrument: gold priced in US dollars |
| BUY LIMIT | Direction and order type: buy, but only if price drops to the entry |
| Entry 2,395.00 | The price where the trade should open |
| SL 2,388.00 | Stop loss: the trade closes here if price goes against you ($7 below entry) |
| TP1 2,405.00 | First take profit, $10 above entry |
| TP2 2,415.00 | Second take profit, $20 above entry |
| Risk 1% | The suggested share of your balance to risk |
Order types: market, limit and stop
| Order | When it opens | Used when |
|---|---|---|
| Buy (market) | Immediately at the current ask | Price is already at the entry |
| Sell (market) | Immediately at the current bid | Price is already at the entry |
| Buy Limit | When price falls to the entry, below current price | Buying a pullback |
| Sell Limit | When price rises to the entry, above current price | Selling a rally |
| Buy Stop | When price rises to the entry, above current price | Buying a breakout |
| Sell Stop | When price falls to the entry, below current price | Selling a breakdown |
If price has already moved well past the entry, don't chase it. Your stop loss would be further away than planned, so the same lot size would risk more.
Stop loss: the most important line
The stop loss is where the trade idea is proven wrong. It also decides your lot size. Never remove it or move it further away after you've entered.
Take profit levels and partial closes
Many signals give two targets. A common way to manage them:
- At TP1, close half the position.
- Move the stop loss on the rest to the entry price (breakeven).
- Let the second half run to TP2.
This locks in some profit and makes the rest of the trade risk-free, though gaps and slippage can still occur.
Risk-reward ratio (R)
Risk-reward compares what you can win with what you can lose.
R = (Take profit − Entry) ÷ (Entry − Stop loss)
In the example: TP1 = 10 ÷ 7 = 1.4R, TP2 = 20 ÷ 7 = 2.9R. With an average win around 2R, you can be profitable winning fewer than half your trades. That's why honest providers report results in R, as on our signal record, and not just a win percentage.
Sizing the trade: 3 steps
- Risk in dollars = balance × risk %. For $1,000 at 1%, that's $10.
- Stop distance = entry − stop. Here $7.
- Lot size for gold = risk ÷ (stop distance × 100) = 10 ÷ 700 = 0.014, rounded down to 0.01 lots.
For forex pairs, the pip value differs by pair. Our lot size calculator handles both, and the gold lot size guide walks through more examples.
Placing the signal in MT5 (mobile)
- Open the symbol (XAUUSD) and tap Trade.
- Change the type from Market Execution to Buy Limit (or the type in the signal).
- Enter the price (2,395.00), the volume (your lot size), the S/L (2,388.00) and the T/P (TP1 or TP2).
- Tap Place. The order now waits in the Trade tab until price reaches it.
- To use two targets, place two orders of half size each, one with each TP.
Mistakes beginners make with signals
- Copying the lot size from the signal, not from their own balance.
- Entering late after price has run away from the entry.
- Removing the stop loss "to give it room".
- Taking every signal from five channels, which stacks correlated risk on the same move.
- Judging a provider on one week. Look at at least 3 months of results. See our signal scam red flags.
Get signals with this already worked out
The FXRAID Signals App sends entry, SL and two TPs and calculates the lot for your balance. VIP signals are free with a qualifying Exness account opened through FXRAID.
FAQ
What do TP and SL mean in forex signals? TP is take profit, the price where you close in profit. SL is stop loss, the price where you close to limit a loss.
What is the difference between buy limit and buy stop? A buy limit opens below the current price (buying a dip). A buy stop opens above it (buying a breakout).
Should I enter if price has passed the signal's entry? Usually not. Entering late widens your stop distance and worsens risk-reward. Wait for the next signal.
How many signals should I take at once? Keep total open risk to around 3% to 5% of your balance, and avoid several trades on correlated pairs at the same time.
What does 1R or 2R mean? 1R is the amount you risked. A 2R win made twice your risk; a −1R loss lost exactly what you risked.
Risk warning: Trading forex and CFDs on margin carries a high risk of loss. Signals are for education and information, not personal financial advice. Updated: 24 October 2026.