An Overview of Forex Trading Signals
Professional services that provide Forex trading signals rely on a team of experts to analyze the markets both from a fundamental and technical viewpoint to determine the best points of entry and exit. These alerts are subsequently sent to traders either via email, to the forex software platform you are using or even to your cell phone.
Depending on the service you are using you will receive Forex trading signals for various currency pairs but you can be certain that the majors are always included in the list. However, you need to keep in mind that there is no guarantee that every trade you enter according to the alerts will be profitable. This is simply because it is impossible for anyone to be right 100% of the time.
Forex Trading Signals: Advantages
The advantage to using a Forex trading signal service is that you don’t have to sit in front of your computer all day long to trade. If you opt to receive the information to your cell phone you can be practically anywhere and still be able to trade profitably.
Additionally, if you follow the alerts exactly as provided you will be able to increase your profits because most of these services employ strict risk management. Proper risk management is the key to trading successfully and turning a decent profit. This is because in trading the more you risk the more you stand to lose. Therefore, rather than risking too much of your account on a single trade and losing the majority of your capital, using strict limits will help you avoid catastrophe.
Likewise, most Forex trading signal services also provide an overview of their forecasts and this can help you learn to eventually analyze the markets on your own. Since these services provide both technical and fundamental analysis you can see what they watch for and which economic indicators impact the value of the currency.
Forex Trading Signals: Disadvantages
The biggest problem with Forex trading signals is that people use them as a substitute for learning how to trade themselves. Unfortunately, this is a big mistake because if you have a series of losing trades you won’t have any idea what went wrong. Remember that no one cares about your success as much as you do and placing your faith solely in Forex trading signals services without learning how to analyze the markets is a recipe for disaster.
Forex Trading Signals: Finding a Good Service
The best way to receive your Forex trading signals initially is directly to your trading platform which means that it will be your broker providing these alerts. This implies that you need to find a reputable broker with a good track record if you don’t want to lose all your capital in the first few days.
Brokers earn money on every trade, whether it’s profitable or not. As long as you make a trade, they will have an income and there are plenty of less than stellar brokers who send out false signals simply to get people to trade.
Finding a reputable broker that provides excellent Forex trading signals is not hard because you can easily research them. The best way to find out if a broker is right for you is to ask current and past members about their experience with the signals they receive. Don’t expect to find a service that is always right, but if they are right more than 70% of the time and traders are making a profit, then you should seriously consider opening an account with them.