Forex signals, in the most basic terms are buy and sell signals sent to traders from the signals provider. The advantage with forex signals is that for those who are constrained by time, forex signals are a great way to enter/exit the markets and to make considerable profits without having to invest too much of time upfront.
There are so many forex signals service providers now a days that at times it tends to confuse the trader as to which forex signals provider to choose. This article aims to help the reader in doing some basic research before signing up for a forex signals provider and also gives a few recommendations on some tried and tested forex signals service providers.
Do most forex signals work?
The answer is highly subjective and varies as per different criteria and parameters. For example, a forex signal might come with entry/exit points for a trade. If you were trading with a no dealing desk broker, where the spreads are tight, you will be able to make a profit out of the trades. However, if you were trading with a fixed spread broker, then the profit factor should consider the broker’s spread as well. This brings us to the next point in the article.
Forex Signals – Important factors to consider
Currency Pairs: By and large, most forex signal providers tend to stick to the majors with some cross currency pairs. Pay attention to the currency pairs that the signal provider offers.
Why is this important? Different currency pairs have different spreads and are also most active during a certain trading session. If you were trading with a floating spreads broker, chances are that the spreads for a certain currency pair is at its lowest during the pair’s corresponding trading session.
Position Size: The amount of lots you wish to trade per signal depends on your risk portfolio. Not all forex signals immediately head into the positive zone. Under such circumstances, if you were to trade 2 lots which leaves you with a 100% margin or lesser, it becomes riskier than you can imagine.
How to choose a forex signals provider
Thanks to the competition, at least some of the best forex signals providers offer competitive terms. Some offer a free trial while some others offer a 60 – 90 day money back guarantee if your balance is in the negative due to the signals.
Here are some important tips to consider before choosing a forex signals provider.
Credibility: This aspect can be researched into by searching for the signals service. Most often you will find traders leaving their reviews on the forum. It is best if you have a telephone number/contact details (address) available on the website. Giving a quick phone call to check with the signals provider will help to dispel any aspects of a possible fraud.
Signal Types: How does the forex signals service provider send the signals? The most common way is to send the signals via email. Some providers tend to offer SMS or live RSS feeds for new signals. Check which is more convenient for you.
Order Types: The best kind of signals are pending orders as this gives you enough time to set up the trade yourself. However, the downside being that in some rare cases, depending on the pending order type the trade might not get executed at all. Make sure that the signals being offered comes with a Take Profit and Stop loss so you don’t have to monitor the trade constantly.
Back testing Results: Before we get into this aspect, traders should firstly realize that past performance is not an indicator for future performance. Therefore do not make a decision to purchase a forex signals subscription purely based on back testing, although this should form one of the aspects of your overall research. Do not fall for images depicting results but rather stick to results from the signals provider which is linked to myfxbook or other reputable trading journal websites.
Pricing: Some forex signals start as low as $5/month and some can go as high as $147 per month. No matter what the price is the bottom line is that you should be able to break even on your forex signals investment at the very least and make modest profits on top of it.
Value added services: Some signal providers tend to confine themselves with just sending you the trade entry/exit signals, while some go beyond and actually provide technical analysis to back up the trades/pending orders. Obviously, the second type of forex signals provider is better because you also get to learn from the trades as well.
Another value add service and one that comes at an additional cost is what is known as a trade copier EA service. Such expert advisors basically automate the entire signals service so you do not have to lift a finger. It is usually recommended not to opt for this service (at least in the initial stages) unless you have been using the forex signals service for a while and one that has proven to be profitable for you.
# of trades: Traders can be primarily classified into intra-day traders and swing/position traders. Depending on the kind of trader you are, choose a forex signals service provider that matches your needs. For example, if you were a swing trader, it doesn’t make sense to subscribe to a signals service that sends 5 – 10 trades per day making you some small number of pips in profits.
Recommended Forex Signals Providers
ForeSignal: ForeSignal is a forex signals website that has been around for close to a year. One of the best aspects of ForeSignal fx signals service is their transparent approach. You can in fact get free signals directly from their website. The only catch being that signals are released a bit later than for subscribed customers. In terms pf pricing, Foresignal.com offers a very competitive pricing of as low as $11.99/per pair/per month and offer discounts if you purchase 3 month or 6 month subscription and a 50% discount if you subscribe to all the forex currency pairs that they offer signals for.
|Pair||1 month subscription||3 months subscription
for the price of 2
|6 months subscription
for the price of 3
50% off till 1 Dec 12
Click here to visit Foresignal.com to get free forex signals