In case you are totally new to the signal trading, I strongly encourage you to read this introductory article – How To Profit With Forex Or Stock Trading Signals. It is a good starting point for understanding the basics concept.
So Why Trade Forex By Signals? Can’t You Just Trade Yourself?
Why go to doctor when being sick? Can’t you just cure yourself?
Unless you are a doctor too, I don’t recommend you experimenting with your health. In same way, I don’t recommend you experimenting with your money unless you are a professional forex trader.
Essentially you would use (and pay for!) forex trading signals for the same reason that you would pay your financial adviser – to receive professional advice which leads to much better results than you can achieve yourself.
When it comes to health and money the professional advice can not only bring better results but is likely to save you from a disaster.
How To Choose Forex Trading Signals Provider?
This question have been discussed before on The Shark Investor. There is one selected signal provider in my portfolio, but you should always be able to pick a provider yourself. Watch for the following criteria:
- Past results. Yes, past performance is not a guarantee for future profits, but it still remains the most important factor for choosing a forex signals provider. Do not expect to achieve exactly the same results as the signal provider! There are many factors which reflect your performance as you’ll see later in this tutorial.
- Type of signals. Usually the forex trading signals are distributed by email, chat rooms or desktop software. Email based signals are not very good for day traders because of the time delays. I personally prefer chatrooms, because you not only get signals, but can talk with the trader and other traders (don’t overdo it though).
- Subscription price. Like everything good, the forex signals are not free. The prices vary usually between $50 and $300 monthly, often with discounts for longer subscription. Of course lower price sounds better, but what’s the point if this means lower quality (i.e. performance)? You should compare price with the results and do your math – so your profits are higher than the subscription fee.
- Customer support. Like with every subscription service, I suggest you ask few questions to the support and see how quick and professionally they reply. The best companies have live support and phones.
- Reputation. The longer the company is in business, the better. If they report fake signals, you can easy verify this browsing the net and searching for reviews about the provider. Easier option to find a trusted signal provider is just to check the reviews and picks here, on The Shark Investor.
- Refund policy. A company which knows the quality of its own service is not afraid to offer a money back guarantee. Additionally, this is a good insurance for you in case you are not happy with the results.
Here is how a trading chat room looks (from Millennium Traders)
I am doing a lot of research on this blog to find good signal providers, so you can save the effort searching yourself. But it’s still better to know how to research when you need to do it.
How To Choose a Forex Broker For Your Signal Trading
This time, if you want to know more I’ll send you to an external resource – The Forex Trader has a good tutorial on this topic. If you don’t have much time to read the entire tutorial there, here is a quick summary of the most important criteria (some are from that website, others are mine):
- Tiny spread
- Minimum amount to open a trading account
- Payment methods
- Customer support
- Any other fees
- Quality of the software
- Charts etc. extras
Many traders claim that choosing the broker is vitally important. In my opinion as long as you don’t choose some cheap garage-made scam company, the other factors in your trading matter more.
The only important step you must take at this point is to open a trial account with the company and play a little with the platform. Make sure that you feel comfortable with the software, that it doesn’t crash often and reacts quick enough.
Do not submit for trial after you pay for the signals. You will NOT be able to test the signals performance, because trading on demo is very different than trading real money. All you need to achieve with the trial is to see how comfortable you are with the trading platform. Don’t lose paid signal subscription days to play demo accounts.
Continue reading – How To Trade Forex By Signals, Part Two