A forex signal is a service wherein a provider sends signals to its clients for profitable trading. The service provider sends the signals in the form of a subscription.
Forex signal service is a specialised service that requires expert analysis to come up with good entry and exit points. The analysis can be done by a human analyst or software. Whether it is a human expert or software, the signal provider should analyse different market parameters to find the best entry and exit points.
Forex signals are usually provided through subscription models - monthly, quarterly, and annually, among others. It is also offered as commission, where the signal provider collects a commission on every trade made based on information provided.
This type of forex signal includes a subscription fee and commission. It is important to note that this type of service doesn't mean that the traders would receive bad trading signals if they don’t pay commission. Generally, the traders would get the same forex signals as the provider.
How to Choose a Forex Signal Provider?
As forex trading has gained a lot of popularity, there is no dearth of forex signal providers as hundreds of them are available at your disposal. However, one of the greatest challenges for forex traders is to find a good forex signal provider.
This article will help you with how and what to look for in a good forex signal provider. Read on to know more about the minor and major details you should pay attention to, as they can make all the difference.
Points to Look for While Choosing a Forex Signals Provider
Here are some of the points you should look for while choosing a forex signals providers:
Profitability and past performance
One of the main reasons why traders take the help of forex signals is improved profitability. They subscribe to the service to increase the chances of earning a profit on every trade. The assumption is that the expertise and analysis offered by the signal provider will help the trader to make the best of the opportunities and earn profits.
So, if you are planning to sign up for a subscription, look at the provider’s track record for profitability. Check the historical data and verify if the signals you receive are real and reliable. There are several third-party verification services to make sure your chosen service provider is indeed what it claims to be.
If a signal provider cannot be verified through any of the verification services, something is likely amiss. In such a case, you should stay away from availing of its services.
Trading history
Another important factor determining the authenticity of a service provider is its track record. Always choose a signal provider with a proven track record.
It is a common practice by providers to show data of the recent months to claim high profitability. Such service providers use a system that will burn after 2-3 months and then launch a new one showing the records of the past month or two. Beware of this practice and make informed decisions.
Watch out for such practices and stay away from providers that quote unbelievably high profitability. It is better to go for someone conservative and with proven track records for more than a couple of months. Research thoroughly and settle for a provider that offers the subscribers long-term sustainable and profitable trading signals along with detailed technical analysis.
Use trial offers
Almost all the good signal providers don’t have anything to hide. Hence, they often offer a free trial period to the clients to check out their services before deciding on them. Trial periods enable you to test trading signals and to decide on multiple trading methodologies. Normally, service providers offer a free trial period ranging between one and four weeks.
Trading style
While choosing a signal provider, you should always consider the trading style. Ask a few questions to yourself such as am I looking for short-term or long-term signals? Are the signals based on fundamentals or technical analysis, or is it a combination of the two? Your answers will have a significant impact on signal evaluation and your subsequent decision.
It is important to remember that regardless of the trading style, a signal should be profitable. It is also worth remembering that long-term signals usually enjoy a higher success rate than the shorter ones.
Customer support
Another major factor to consider while choosing the signal provider is the customer support service it offers. The degree of support shows how much a provider cares for the clients. Every signals service provider must answer all queries. Furthermore, the traders should be able to contact the provider directly.
Compare
Never choose a service provider before comparing them against one another. Shortlist a few of your choices and compare them. If you find it impossible to compare every provider, you can use an online forum to compare. There are several such forums where the traders share their experiences. Certain websites also review and rank the providers so that you can decide based on the reviews from actual clients.
Paid or free
There are several free forex signals too. They might offer signal service free but might sell other services like webinars, courses, and other such related products. There is no rule that free service is less reliable or bad. It is just that they are earning their income from other services and not from forex signals.
Check Out: Top 7 Forex Trading Signal Services
Essentials of a Forex Signal Service
You should always choose a forex signal service provider that:
- Deals with the currency pair you trade
- Offers the direction in which you trade - A BUY or SELL button is essential
- Shows the status of your signal - active, get ready, and closed. Active signals are ready for use, get-ready signals will be available shortly, and close signals have already ended.
- The entry price or the level at which the forex signal recommends entering the trade should be self-explanatory
- The stop-loss should be in place so that your trades are closed automatically. The provider offers advice on where to put the stop-loss.
- The take-profit option to take your profits at the right time should also be available
- A detailed real-time market analysis and regular trade alerts are a must
Conclusion
Choosing a good forex signal provider needs some effort on your part. However, if you choose the right provider, all your hard work will pay off. So make sure you choose a provider with a reliable track record, one who meets your trading needs with an excellent support service and offers good entry and exit points.
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