Traveling has become an integral part of modern life, and with sophisticated platforms available on smartphones, it is now possible to travel and trade simultaneously. Constant internet access and mobile apps enable travelers to access the FX market from airports, hotels, or cafes across the globe. This would have been impossible years ago when mobile phones were primitive and laptops were chunky. Despite modern freedom, there are still challenges for travelers who trade the markets from their mobile devices. Mobile trading exposes traders to emotional decision-making due to stress and informational overload, often associated with going to remote places and finding a reliable internet connection.
In this brief guide, we will outline the main tips and strategies to avoid false forex signals on the go without the need for powerful computers.
False signals in forex trading – What are they?
False signals are a common occurrence in financial markets, especially in the foreign exchange market. False signals occur when the market appears to confirm a trend or breakout but quickly reverses direction, leaving traders with losses. For example, you see a EUR/USD push above the significant resistance zone, forming a breakout, and enter long, but the price collapses minutes later and switches to bearish momentum. These false signals are common occurrences in forex, and the only way to counter them is to have a well-tested strategy and strict risk management rules. False signals occur because of thin liquidity hours, volatility spikes, and algorithmic manipulations. Since algorithms dominate modern forex markets, false signals are very common and require utmost attention from traders to succeed.
While mobile apps are very advanced nowadays, they are still inferior to desktop platforms, and it is even more difficult to spot false signal signs. Mobile phone screens are smaller, and traders can not see much candle data on the screen, which only adds to the challenge. Recognizing that these false signals are part of the game will help traders avoid emotional trading and improve their performance.
False signals – Causes and triggers
Several factors enable false signals in forex markets: low liquidity during late trading hours or low liquidity sessions like Sydney, major economic news releases, global macroeconomic or geopolitical changes, and algorithmic trading robots. Low liquidity markets tend to spike occasionally and make it difficult to detect consistent patterns. Algorithmic robots often amplify moves as they can detect minor breakouts and create artificial momentum that collapses later. Intra-day reversals are more frequent after high-impact news releases, and they also cause many false breakouts. Traveling traders who can easily get distracted by time zone changes or fatigue are more likely to misread these setups and miss confirmation signals.
How to spot false signals
The number one tool in spotting false signals on the go is not actually a tool; it is a discipline. Through a disciplined approach and clear observation, warning signs become more obvious. Traders should observe patterns like inconsistent volume, candles that lack follow-through, and indicators that don’t align with each other. A breakout that is visible on a 15-minute candle chart but fails to also appear on a one-hour timeframe is a clear red flag. Checking multiple timeframes to spot the main trend and support and resistance zones is the best way to avoid getting caught in false forex trading signals while traveling.
Setting alerts on important price movements on mobile platforms is a good way to get notified when something important occurs in the chart, so that you only check charts when there is a significant price movement.
How to avoid false signals on the go
The best way to avoid false signals is to use confirmations. The best defense is preparation and confirmation techniques, such as waiting for double signals, cross-checking moving averages, or confirming on higher timeframes before entering a trade increases your chances of success. Modern smartphone apps offer all the trading tools like technical indicators, drawing tools, customized charts, and many timeframes, which are more than enough to apply basic confirmation techniques.
When traveling, it is advisable to reduce exposure, meaning you should use smaller lot sizes than usual. This way, your risk per trade is lower, and even if you fail to filter many false signals, the damage won’t be significant. Another effective method is to use pending orders, like limit orders, to ensure you are getting filled at a favorable price, controlling when you enter markets. Use the economic calendar to control high-impact news and try to trade during the most active market hours, depending on the trading session you have to trade.
By using these methods, you can both travel around in your beloved destinations while simultaneously reducing the risks of getting caught in false forex trading signals.
