Prices in Forex markets are the most volatile of any trading instrument. They change farther and faster (on average) than stocks and bonds, though commodities can be pretty roller coaster, too. This presents non-professional investors with a dilemma: either sit by a computer monitor all day, looking for price movements in real time or potentially lose a whole lot of money. But there's a way out of that dilemma. Use signal services.

Forex signals are buy and sell indicators based on technical analysis. Technical analysis uses historical price and volume data to statistically analyze trends. The goal is to establish, with a stated probability, the likelihood of future price movements.

There are several ways in which a signal can be transmitted to an investor: via email, instant messaging (chat), mobile phone text message, etc. It can appear as a short text message like 'Buy euros now, 1.1901' or as a blinking message or graphic on Forex software. Forex trading software's built-in algorithms combine technical analysis methods and real-time market information to generate a signal.

The Moving Average Convergence/Divergence (MACD) is one example of a technical indicator used to generate Forex signals. It refers to the moving average, which is the change in average price over a period of time. When the MACD goes above a certain point it's time to buy; when it moves below that point, then it's time to sell.

The process can be automated even more. A trader can choose to have a buy or sell executed automatically when a certain signal is generated, depending on the recommendation at the time. The trader receives the alert and the Forex broker places the order based on the standing order.

Keep in mind, though, that Forex signals are just tools that by themselves cannot guarantee trading success. Such a trading instrument needs to be used wisely; it's meant to facilitate trading activity, not to fully automate your trading technique. Automatic buying and selling all the time can result in losses for the trader.

You could accomplish the same thing by handing all of your investment capital to a forex broker and instructing him to do a good job. Sure, it might get you what you want. But it might not. And it certainly won't give you any control over your trades.

For all that, signal services have their uses. They can continue to monitor prices while investors take breaks or get some sleep. They can simplify charts that seem confusing to newcomers. And they can compensate for little or no trading skill.

All that comes at a price, of course. Signal services range from $50-$250 per month, though some are cheaper and a few are more. Only the individual investor can decide whether the cost is justified. As with any trading service, if you make more than it costs than you would without it, that's profitable.

Forex trading is not regulated. There are unscrupulous brokers who will sell promises for large sums of money. Their signals may or may not be worth the cost. Only you can decide.

Options for limiting risk are also things that investors should know. The volatile nature of Forex trading makes it important to time buy and sell orders properly and to learn about and employ methods such as stop-loss orders and limit orders.