I have just started learning music but i find it very difficult to recognize the chords used in a song and its key signature when it seems to be far too easy a task for other students.
Is there any specific exercises/tricks to getting a better ear for the not-so-gifted in this department?
What I do is not caring for the key signature. Not at the beginning at least. To a beginner, I would suggest to do likewise.
Let's say you hear a song in F major, with this chord progression: I-IV-V-VI-V-I.
If you don't know the key signature, just play the progression in any key, and it would be the same. It's far more difficult to find the progression rather than the key. After you've successfully found the progression, you can compare it with the original song (while you play piano/guitar) and see what the key is.
Now, as far as the chord progression, I would suggest to you to try and focus on the bass of the chords'. Follow the movement of the bass, because that is what gives the chord its name. You can start by simply identifying intervals rather than chords. After you've gotten better at intervals, you'll be able to recognize the movement of the bass and then you should focus on the quality of the chord.
For instance: You hear a C major chord, and the bass moves to F. What is the quality of the chord? Major? Minor? Diminished?
After you've found the quality, you should try and think: "In the C major scale, what kind of chord could there be with F as a bass and the quality X?"
I'm sure there have been very similar questions posed here, however - The final chord in most songs is the key, or root chord. This needs to be established first. As Shev. says, the bass will often play that root note, so it becomes easy to find.
It will also tell if a song's in major or minor. Having found that, by matching it with a chord played on an instrument simultaneously, a set of chords to complement that will be necessary. Working from the major perspective, I,ii,iii,IV,V,vi will be the list to take chords from. As in Cmaj., say. C, Dm, Em, F, G, Am will be the most commonly used chords. The first 'main' chord will often be the key chord, too. So, if it is, then the next chord, if also major, will be a 50/50 between F or G. If the progression moves to a minor, there's a 33% chance of just guessing. Not bad odds either way!
I feel this is maybe easier to do whilst listening to the song, rather than taking a random key and trying to play the song in that key - unless, of course, one only knows a few chords that fit in a key.
Start with simple songs - Happy B'day, Jambalaya are a couple. Bear in mind that usually the two most prevalent chords are I and V - two chord songs generally only use those.
Key signature is really a different issue - you maybe just meant key?
