There are basically two types of signal providers today – the automatic and the manual. Both are effective in providing traders with the information they need depending on what kind of trader they are.
The manual type basically means getting the service of an actual Forex analyst. This analyst will be the one watching the market for any signs that will signal a change in the trend. Once the signal comes, the analyst will alert the trader who will then decide about their stop loss and profit limit orders. The best thing about the manual method is that the level of accuracy achieved by human analysts is definitely better than those of the machine. Unfortunately, the timeliness may be a bit problematic since the trader will need to go online in order to make their trading decision.
The automatic type is run by a Forex robot. The robot is set up to keep track of specific signals are required by the trader. Once these Forex signals are met, the robot will immediately execute a trade depending on the orders issued by the trader earlier. Hence, it’s not necessary for the individual to actually be online to place their trade. The Forex robot will do the job for them and simply send an alert that the deed has been done. This makes for an excellent tool to capture timeliness but is not equal to the accuracy of manual Forex signals.
How to Choose Forex signals
Keep in mind that the effectiveness of signals is largely dependent on their timeliness and accuracy. Considering how market changes happen by the minute, it’s important for traders to get their trades in quickly before a quick reversal of the situation. From what was mentioned above, traders have the option of choosing between two very different types, each of them having a specific strength.
For this reason, traders are advised to look beyond just the timeliness and accuracy of the signal provider. Some things to take into consideration include how the provider accommodates different types of sending formats. Are they capable of sending the report through your mobile phone, email or any other media?
Most Forex signal providers offer traders a trial before they can choose to get the full service. This is possibly the best way to approach choosing, as the trial will provide traders with a glimpse of exactly how the signal works. Just make sure that the signal is first used on a dummy account since risking real money on this highly volatile market is not recommended. Of course, the fee a provider asks for should also come into play.
Note that Forex signals are typically mathematical and historical information of a currency pair’s trend in the market. Really good traders use them but also look beyond the historical data. Specifically, they check out qualitative information such as the political standing of the nation as well as their environmental and security situations. Although they may not feature much, these factors are also considered Forex signals.