Signals have become a popular tool with Forex traders. Before their emergence, the statistics were scary, and it was almost practically impossible for retail traders to win in the Forex market.
Even though now, most reports still have it that over 90% of retail Forex traders lose and eventually stop trading, the statistics have, at least, become less scary — although not still exceptionally so.
One of the factors responsible for that is Forex signals. Indeed, they have helped many erstwhile struggling traders to improve their chances of success. However, before you use them, here are some guidelines that can help you to pick the best of them.
Introducing Forex Signals
Forex signals are just potential trading opportunities delivered to their subscribers via emails, SMS, and other similar means. Dedicated companies develop and send them to their subscribers daily.
Even though there are free ones, most signal services require fees to use them. Usually, these fees are charged at weekly, monthly, and even yearly intervals. There are many Forex signal services, and you will have to make your choice.
The following tips will help you to.
- Ensure the signal service is tested and trusted.
Reputation is everything. In the Forex signal business, that statement is even more critical. Because the industry is chock-full of scams, you must be careful when looking for a signal service to use.
That is why you should never pick any signal service based on mere hearsays. Instead, you should do your research. Check signal review websites. Look for what users are saying about it.
If the signal service is of high quality, you will find out from those reviews. However, since signal providers can rig reviews in their favour, you should also check for third-party verification of the performance of the signals they give.
- Check if it offers a free trial
Check the signal provider if it offers a free trial. The provision of a free trial by signal companies has become an important criterion for confirming their authenticity.
This is so because most genuine signal services provide it. They use it as a strategy to first attract users before they eventually introduce them to their paid plans. And often, it works. Hence, signal providers that offer free plans are most likely to be preferred over those that don’t.
- Does it emphasise risk and money management?
Then, you should watch out for the risk and money management policies of your signal provider. How many pips does it risk per trade? How many does it win? What is the ratio of both, known as the risk-reward ratio?
This ratio will give you an insight into the risk profile of the signal service. Then, you can compare it with yours. At this juncture, it is important to implore: do not be greedy. That the signal service has a high winning rate should not hold it back from keeping a healthy risk-reward policy nevertheless.
Any reckless signal service should be avoided.
- What is its level of professionalism?
How professional is the service provider you are considering to use? There are those providers that go to the extent of organising one-on-one sessions with their clients.
They seek to understand their specific needs, and they are genuinely interested in giving them the service that will match them. Additionally, you should confirm if it has a support service via which you can ask questions, seek clarification, and lodge any complaint you have.
You will not appreciate the professionalism of a signal provider until you run into any problem that will warrant you getting in touch with them.
- What is the strategy of the signal provider?
With which strategy does the provider generate its signals? Does it operate a strategy that is based on fundamental analysis, or does it use a technical analysis-based system?
Another point to consider: for how long does it recommend the holding of the trades it signals? The answer to this question will give you a clue about the nature of its strategy.
Then, you will be able to decide if it will be the best one for you.
- Are its signals manual or automated?
Manual Forex signals are human-generated signals. They are deduced from the market analyses of expert traders who can be working for a wide range of Forex-based platforms.
They analyse the Forex market and identify profitable setups in it. They then send those opportunities as signals to their subscribers.
The other category of Forex signals is the automated signals. Those signals are representations of opportunities in the market identified by programmed systems such as software and robot.
Which one to use? You might be confused to make up your mind. However, if you want speed, efficiency, and comfort, the automated signals way is the way to go.
- What are the bonuses?
Even though profitability, independent verification of performance, and professionalism are preeminent factors to assess, it will not be wrong if you seek out only a signal service that also provides some additional services.
For example, some signal providers also offer account management and fund management services which you might be interested in exploring. For account management, you keep an account on which the provider will trade its signals for you.
For fund management service, on the other hand, you give up your funds to the provider’s service to manage for you. At agreed intervals, the provider will be paying you returns on your investment.
In your shopping for a good signal service, you should check out 1000pip Builder. Their signals, based on expert analyses, rack up at least 350 pips every month. You can sign up for a membership plan with them here.