Trade Signal

A Trade Signal is one of the many technical or fundamental indicators that are used by traders to determine the time to buy or sell a security.

Trade signals are usually used in groups, as any one trade signal is usually backed up with corresponding data from other indicators.  This is the exact method that trading specialists build into trading algorithms when they design automated trading programs.  When an automated trading program is developed, the software is set to recognize when trade signals occur.  These trading programs will issue a buy or sell order when enough trade signals are present.  Individual Trade Signals can be based upon trading volume, chart patterns, moving averages, or other statistical data.