Forex signal providers are making good fortune, both for themselves and for forex traders through the provision of forex signals to their clients. Forex trading signals are so important that anyone who knows next to nothing about forex trading can apply them in trades and make good profits. It is therefore not surprising that there are many unauthorized forex signal providers in the market. In most cases (if not all), such signal providers provide wrong signals thereby misleading their clients. As a result of this, traders should take care when choosing a signal provider. In choosing a signal provider, a trader should ask the following questions
What are the criteria to consider?
How do you measure effectiveness of the signal provided?
Who should you turn to for advice?
TYPES OF SIGNAL PROVIDERS
Essentially, a signal provider provides traders with signals (in the form of emails, text messages, etc) on how to trade the forex market profitably, with specifications. They provide signals to their clients through two methods
- AUTOMATED SIGNAL PROVIDER
This is where you couple your trading account to a third party signal provider who automatically takes trade on your account. This gives you the freedom of having your hands off so you can do other things. It is practically like earning even while asleep, but then you can wake up to huge profits or loses overnight.
- MANUAL SIGNAL PROVIDER
In this case, the alerts may come in form of SMS, emails or websites, you then choose whether to use them or not. Unlike with the automated signal provider, clients of a manual signal provider will have to do some work in a bid to apply the signal he or she received as a text message.
IMPORTANCE OF SIGNAL PROVIDERS
Knowing the depth of knowledge needed for taking informed decisions on forex trades and considering the fact that not everyone has either the time or aptitude to do the grinding work of sourcing and sieving the vast amount of data available, there appears a screaming need for a group of people to do the hard work for a fee. The only work left for the trader apart from parting from a few dollars is now how to tell a good signal provider from the charlatans.
IMPORTANT CRITERIA TO LOOK OUT FOR
There are many factors which every newbie has in mind when shopping for a signal provider but here are the factors that should be high on the list
Nowhere is this word more important than in the world of forex, the make the whole difference between profit and loss and the trader would know that there is need for research here.
This is another important criterion; the channels of information should be such that the signals are delivered as and when due to what is the importance of a signal that arrives after trade has been affected?
- BOGUS PROMISES
One way of picking out a fraudulent provider is through their promises and projections. No signal provider who is worth is salt would promise you 100%
Scout their website and forums for profitability reports from those traders who have used the service ensure the results are legit. Investigate and ask questions until you are satisfied
In conclusion, a great deal of research and adhering to the points raised can increase your chances of hitting a good signal provider and increase profitability
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.