The use of Forex signal in today’s currency market is fairly common. After all, these signals are basically condensed accurate predictions of how the market will move in the future. With the help of signals, even new traders have the ability to participate, learn and profit from Forex as much as their professional counterparts.
It is important to know however that being the recipient of a Forex signal is not enough. The accuracy of the signal as well as its timeliness is also important to ensure that every decision made will have the results expected of it. That being said, following are some tips on how to choose an ideal service provider of signals.
Robot or Analyst
There are basically two ways of determining signals. The first one is through an analyst who will be keeping track of charts and alerting subscribers should the chart start to showcase specific signals. The second type is through a robot that determines signals through algorithm. Both are equally effective so choosing between the two is not really a problem. Typically though, Forex robot can provide more access for their signals.
Maximum Draw Down
This is the maximum loss the service provider is willing to take before releasing the trade. The logic here is that if they hold on to the trade long enough, the losing streak might eventually turn around. Although that’s admirable, there’s a good chance that the loss will never be recovered. This is why the max draw down of the trader must not be too big; otherwise there might be more losses than profits.
Most services will provide prospective clients with an access to their past reports. Note that reports can be sometimes padded to reflect only the positive side of the Forex signal service. Hence, look beyond their history and ask if they trade using their own signals. If they are really profitable, then the traders should be more than confident to use their own signals as a basis of their personal trades.
Of course, don’t forget the most important thing of all – their reputation. The length of time they have been in service as well as what others have to say about them is important. It provides an important peek on the stability of the provider, considering that they are in a highly volatile industry.
Take Trials – Always
Never commit to a signal service that doesn’t provide a trial system. Remember that you are trading REAL money here so your signals should be highly reliable. The trial period would allow traders to have an inkling of how the process works and more importantly, if they are anywhere near accurate.
Keep in mind that subscribing to a good Forex signal service provider is not nearly enough. Traders should also take the time to understand how these signals work, especially if they are just starting on the industry. By knowing exactly how to come up with these signals or having in-depth understanding of the process, they will be in a better position to come up with profit-making decisions.