Quick answer: To read a forex signal, check five things in order: the pair, the direction (buy or sell), the entry price, the stop-loss (SL) and the take-profit (TP). Then work out two numbers yourself: how many pips away the SL and TP are, and what lot size keeps your risk at the amount you planned.
A signal is only useful if you read it the way the analyst meant it. Get the direction wrong, miss the stop, or size the trade from a guess, and you end up in a different trade from the one that was sent. This guide goes through a real signal from our Telegram channel, line by line. New to signals altogether? Start with What Are Forex Signals?
A Real Signal, Line by Line
This is a signal we sent on 2 November 2026:
Written out, it says:
📊 CHFJPY BUY: 192.600
SL: 191.600
TP: 194.350
That’s all a signal needs: what to trade, which way, where to get in, and where to get out in either direction. Here is what each line means.
1. The Pair
“CHFJPY” is the Swiss franc against the Japanese yen. The first currency (CHF) is the base currency, the one you’re buying or selling. The second (JPY) is the quote currency, the one the price is measured in.
Buying CHFJPY means buying francs and selling yen. You make money if the franc rises against the yen.
The pair matters because it decides how pips are counted and what each pip is worth:
- Most pairs are quoted to four decimals (EUR/USD 1.1450), so one pip is 0.0001.
- Pairs with JPY are quoted to two decimals (CHFJPY 192.60), so one pip is 0.01.
- Gold has no agreed pip size at all, which is why we measure gold stops in dollars (more on that below).
2. The Direction: BUY or SELL
“BUY” means you open a long position and profit if price rises. SELL means you open a short position and profit if price falls.
A quick check that you’ve read it right:
- On a buy, the TP is above the entry and the SL is below it. Here, TP 194.350 is above 192.600, and SL 191.600 is below it.
- On a sell, it’s the other way round.
If the levels don’t fit the direction, stop and ask before trading. It usually means a typo or a misread.
3. The Entry
“192.600” is the price to open the trade at.
- Market entry: if price is at or very close to 192.600 when the signal arrives, open the trade straight away.
- Pending entry: if the signal says to wait for price to come back to a level, place a Buy Limit (or Sell Limit) at that price in MT4/MT5. The trade only opens if price gets there.
What if price has already moved?
- A few pips away: entering at the current price is usually fine. Keep the SL and TP as given.
- 20 pips or more away: the trade is no longer the same trade. Your stop is further away and your target is closer, so the risk-to-reward is worse. It’s usually better to skip it and wait for the next signal.
You can see when each signal was posted, and where price is now, on our Live Signals page.
4. The Stop-Loss (SL)
“SL: 191.600” is where the trade closes automatically if it goes wrong.
Work out the distance yourself:
192.600 − 191.600 = 1.000, and on a JPY pair that’s 100 pips.
That number decides your lot size. For CHFJPY, one pip on a standard lot is worth 1,000 yen, which is about $6.30 when USD/JPY is near 158.
Example: a $5,000 account risking 1% is $50 of risk.
Lot size = $50 ÷ (100 pips × $6.30) = about 0.08 lots
You don’t need to do this by hand every time. Put the pair, entry, stop, balance and risk into the Lot Size tool on our Forex Calculator and it does the conversion for you. Why the stop sits where it does is covered in our lesson on where to place your stop-loss.
5. The Take-Profit (TP)
“TP: 194.350” is where the trade closes automatically in profit.
194.350 − 192.600 = 1.750, which is 175 pips.
At 0.08 lots, that’s roughly 175 × $6.30 × 0.08 = about $88 if the target is hit, against the $50 you risked.
Every FX Broker Signals trade has one TP, and the whole position closes there. No partial closes, no second target.
6. The Risk-to-Reward
Put the two distances side by side:
R:R = SL distance : TP distance = 100 : 175 = 1:1.75
For every $1 you risk, the target pays $1.75. Always check this yourself. If a signal’s numbers don’t add up to what it claims, that’s a warning sign. Our guide on what TP and SL mean explains why this ratio matters more than win rate.
What It Looks Like on MT4
Here is the same CHFJPY trade on an MT4 account, next to a second CHFJPY buy we sent earlier that day at 192.350:
Notice three things:
- The SL and TP are already on the trade, so it will close on its own at either level, even if the phone is off.
- The entry is a little different from the signal, because a market order fills at the price available at that moment. A small difference like this is normal.
- The second signal entered lower (192.350), so with the same stop its risk was 75 pips instead of 100. Same idea, different numbers. That’s why you size each signal separately.
Reading a Gold (XAUUSD) Signal
Gold signals use the same format: pair, direction, entry, SL, TP. The difference is how you measure the stop.
Brokers don’t agree on what a gold “pip” or “point” is, so measure the stop as a dollar distance on the chart. Say a gold buy has its stop $17 below entry and its target $30 above:
- Most brokers use 100 ounces per standard lot, so a $1 move is worth $100 per lot
- With $50 of risk: $50 ÷ ($17 × 100) = about 0.03 lots
- R:R = 17 : 30 = 1:1.76
Our XAUUSD lot size guide goes through this in full.
Your Signal-Reading Checklist
Before you open the platform:
- ☐ Pair: which instrument, and is it a 4-decimal, JPY or gold quote?
- ☐ Direction: buy or sell, and do the SL and TP sit on the right sides of the entry?
- ☐ Entry: market now, or a pending order?
- ☐ Still near the entry? If price has run 20+ pips, consider skipping
- ☐ SL distance: in pips for forex, in dollars for gold
- ☐ Lot size: calculated from your balance and risk, every time
- ☐ R:R: worked out yourself from the two distances
Then enter the trade exactly as given: same entry, SL, TP, and your calculated lot size.
When a Signal Is Updated
Sometimes conditions change after a signal is posted and we send an update, such as “close now”. When that happens:
- Act on it straight away
- If you use Telegram Trade Linker (TTL), it copies updates to your account automatically
- If you’re not sure whether an update applies to your open trade, check the Live Signals page
Frequently Asked Questions
What do entry, SL and TP mean in a forex signal? The entry is the price to open the trade. The SL (stop-loss) is where it closes at a planned loss. The TP (take-profit) is where it closes in profit.
How do I calculate pips from a signal? Subtract the two prices. On most pairs, 0.0001 is one pip. On JPY pairs, 0.01 is one pip. For gold, use the dollar distance instead.
What lot size should I use for a signal? Use the size that makes your loss at the SL equal to the amount you planned to risk, often 1% of your account. A lot size calculator does this in seconds.
Should I still enter if I missed the entry price? If price is only a few pips away, usually yes. If it has moved 20 pips or more, the risk-to-reward has changed, and it’s usually better to wait for the next signal.
Final Thoughts
Reading a signal takes a few weeks of practice to become automatic. The format doesn’t change: pair, direction, entry, SL, TP. Read each line, work out the distances, size the trade, and only then open it.
To practise, follow the signals on our Live Signals feed and check how each one finished on the Signals Performance page.
Join our free Telegram community: @FBSadmin2 for live signals and direct access to our trading team.