Before choosing a provider of Forex signals and spend our money, we must take into account a number of important factors as it is wide the existing offer currently in the market and each of these services has a number of features both positive and negative that must be evaluated before.
Below we will provide a series of tips that should be taken into account when selecting a good signal provider that allows us to invest more safely in the Forex market:
What type of signal does the provider offer?
Normally signal providers employ automated systems to generate signals, which are based on technical analysis, which is an approach based on past price movements to try to predict future movements. Likewise, they make use of mathematical algorithms which analyze market conditions and generate buy/sell signals through specialized software. These systems are subject to constant revisions since in the Forex market there is no perfect system and sometimes the strategies lead to losses or significant Draw Downs.
Normally the best-automated trading systems are those that take into account both aspects of technical analysis as analysis based l, as well as market volatility with trading volume. Keep in mind that the market is affected by all kinds of technical, economic, political and even social factors. Therefore, in our opinion, it is best to use signal providers that combine the analysis provided by automated systems with the one provided by analysts and human operators with years of experience in the market.
Free signal services
Generally, signal providers allow their potential customers to use their signals for free for a short period of time (7-14 days). In this way, the person can check how the provider works as well as the effectiveness of their signals, that is if they correspond in most cases to winning operations. This is a great advantage because it allows you to verify how good a supplier is without risking money in the process.
In some cases, the provider offers a demo account through which the user can use the free signals that he receives during the trial period, which further facilitates the possibility of testing the provider’s services. Of course, this can not be used as a single criterion either, since any signal system and analyst that may be using the signal provider can have negative results for one or two weeks without this meaning that the service is definitely deficient.
The ability of the signal provider
Most websites of signal providers have detailed information on the daily, weekly, a monthly and annual performance of the signals they provide. This is how the potential client can access the monthly historical average obtained by the signal system or the analysts employed by the provider. This historical information should be one of the most important aspects and taken into account when paying for a service of this type.
It is also important to keep a daily record of all the operations executed by means of these signals, in such a way that the investor can evaluate the average gains / losses that occur with these signals. A simple way to calculate the profit potential of a certain signal provider is to multiply the average of pips obtained in the winning operations by the average volume of the operations performed. This result should be contrasted with the average loss in operations with negative results. In this way you can determine if the system is profitable or not.
Means by which signals are sent
Most often, signal providers send their forecasts or alarms directly to the customer’s email. They also publish the signs on their website that are accessed through a username and access code. Another way in which the signals are sent is by SMS text messages to the cell phone. It is important that the user determines what form is best for them based on their daily activity, that is, if they can almost never use the computer and work outside the office, it is best to choose a provider that sends signals to the cell phone.
Currency pairs offered by the provider
Forex signal provider usually include the most important currency pairs such as EUR / USD, GBP / USD, USD / CAD, USD / CHF and USD / JPY. However, there are some sites that also offer signals for more exotic pairs or with less transaction volume in the market.
Schedule for sending signals
The sending of the signals is usually done at a specific time and since these signals are for intraday operations in most cases, it is important to access the order and execute it as soon as it is received, otherwise the window of the opportunity. This makes it imperative that the operator analyze how likely it is that it can access the trading platform of its Forex broker to open the proposed positions as soon as the service sends the signal. Otherwise, it does not make sense to sign this signal provider.
Signals for other investment instruments
Some signal providers, in addition to the Forex, have services for sending signals to operate with commodities such as oil, gold, silver, platinum and others. They also work with other financial instruments such as stocks, Futures and stock indices. In case the investor wishes to add these instruments to their investment portfolio, it is important to check if a Forex signal provider also has alert services for other financial markets. If so, it is more likely to be more costly logically.
Signs for various types of strategies
Depending on the provider, signals can be sent to perform short, medium and long-term operations. In this case, short-term signals are those that are sent to carry out operations of less than a day. The signals for medium and long-term strategies are for operations with a duration of several days and even a month that seek to obtain a much greater gain.
Some signal providers provide training on the most important aspects related to the Forex market such as risk management, psychology, discipline, trading techniques and others.
Currently signal providers provide technical assistance to both their potential customers and those who have an account with them. This assistance is provided through live chat, email or telephone. It is important that the site that the investor plans to choose has a good customer service to answer all your questions.
Performance/risk ratio provided by the provider
An intelligent investor will be informed about the performance/risk ratio of the strategy used by the signal provider since this is one of the key elements to be successful in the Forex market. If the risk is well managed, in the long term the operator will only benefit from its operations.