Entry and exit signals in forex trading are crucial indicators that guide traders on when to enter or exit a trade. These signals are derived from technical and fundamental analysis, helping traders make informed decisions.

Entry Signals: These indicate when to initiate a buy or sell position. Common entry signals include:

1. Technical Indicators: Moving averages (e.g., SMA, EMA), Relative Strength Index (RSI), and Bollinger Bands. For instance, a trader might enter a buy position when the price crosses above a moving average.

2. Chart Patterns: Patterns like head and shoulders, double tops/bottoms, and triangles can signal potential market direction. A breakout from these patterns often serves as an entry point.

3. Candlestick Patterns: Specific formations like the bullish engulfing or hammer signal potential reversals or continuations in trend.

4. Fundamental Analysis: Economic data releases, interest rate changes, and geopolitical events can prompt traders to enter positions based on anticipated market movements.

Exit Signals: These determine when to close a position, either to take profits or limit losses. Common exit signals include:

1. Technical Indicators: Similar to entry signals, moving averages, RSI, and Fibonacci retracement levels can indicate overbought or oversold conditions, prompting an exit.

2. Stop-Loss Orders: Predetermined price levels at which a trader will exit to prevent further losses.

3. Take-Profit Orders: Set price targets where a trader will close the position to secure gains.

4. Trailing Stops: Dynamic stop-loss orders that adjust as the price moves in the trader's favor, locking in profits.

By using these signals, traders aim to enhance their chances of success in the forex market.