Forex market is the most liquid in the world and it attracts people from all corners of the world. As the markets operate in different geographical regions, the time zone differences make it a 24-hour market.
It means you can trade in the forex market any time of the day (or night, depending on your location). However, forex trading requires much more than creating an account and logging on to trade. You must do your research, come up with plans and execute them according to the signals that you receive from providers.
A forex signal provider is a company that provides real-time foreign exchange signals on market trends. In other words, it is a service in which a provider sends signals to its clients for profitable trading. It is a specialized service that uses expert analysis to come up with good entry and exit points.
Forex signal providers usually offer signal service through subscription models - monthly, quarterly, annually, and so on. Sometimes it is offered as commission, and if so, the signal provider collects a commission on every trade made based on the information provided. In such cases, there would be a subscription fee and commission. It doesn't mean that you would not receive good trading signals if you don’t pay commission. Normally, the traders will receive the same forex signals as the provider.
- How to Choose a Forex Signal Provider?
- A Three-Step Process to Select the Right Forex Signal Provider
- Important Points to Look for While Choosing a Forex Signals Provider
- Essentials of a Forex Signal Service
How to Choose a Forex Signal Provider?
Well, your choice of the signal provider depends on several factors. The indicators you need differ according to your level of expertise.
If you are a beginner, you’ll need detailed instructions on the exchange rates and mode of trade in addition to a broad knowledge base to support the instruction guidelines.
On the other hand, if you are an expert, you are likely to rely on a specialized helpdesk for support to build short-term and long-term strategies. You’ll be dealing with a wide range of currency pairs and would need indicators to stop loss and take profit levels.
So, you will have to choose a signal provider that can scale up the services as you attain expertise in forex trading.
Read Also: How Do Forex Trading Signals Work?
A Three-Step Process to Select the Right Forex Signal Provider
If you are a newbie, there is a simple, three-step process to choose your signal provider. They are explained below:
1. Check online
What better place to start your search than going online if you are a newcomer? However, it is very difficult to decide on a forex signal provider if you are a beginner. One way to start is to sort the providers according to their yearly ranking – put those providers that have the best rating and soon, you’ll have a list of proven players.
Make sure the ranking considers factors such as customer experience, interface, usability, and reliability, among others. Once you come up with a list, you can check the company’s profile, understand their model, and shortlist a few.
2. Ask for Recommendations
Even after short listing the providers, you’ll find it hard to choose one. In such a scenario, you must ask for recommendations from successful traders who have experience in the Forex market.
They usually stick to one or two service providers and/or websites and check the numbers before investing. Popularly known as “Signal Confirmation”, this process ensures a fruitful deal. An experienced trader can guide you on all relevant matters, including choosing the best signal provider.
3. Look for trial services
All forex signal provider services have indicators that offer suggestions about the market fluctuations along with a forecast. You can use the trial services offered by the provider to try out different signalling options.
This will help you understand the functional market and then make a learned decision instead of blindly committing to a monthly or annual plan. Various providers offer various services to full members during the trial period. Some of the services offered are:
- Access to members’ only area
- Email/SMS alerts
- Access to risk management tools
- Permission to copy the traders manually
- Filter feature for various currency trade pairs
- Different modes of transaction
- Access to account management facilities
- Access to live trade centres
- Exclusive expert guidance
Important Points to Look for While Choosing a Forex Signals Provider
Here are some of the key points you should look for while choosing a forex signals providers:
Profitability and past performance
When you choose a signal provider, you assume that the expertise and analysis offered will help you to get the best out of the opportunities and earn profits.
So, you should look at the provider’s track record for profitability before you sign up. Examine the historical data and confirm if the signals you will receive are real and reliable.
You can use any of the third-party verification services to make sure your chosen service provider is what it claims to be. If you are unable to verify them, something is likely wrong. If so, it would be better to stay away from their services.
You must choose a signal provider with a good trading history and proven track record. Don’t be fooled by providers that show data of the recent months claiming high profitability.
They use a system that will burn data after 2-3 months and subsequently launch a new one showing the records of just the past month or two. Watch out for such practices and it is better to stay away from providers quoting exceptionally high profitability.
All the good signal providers offer a free trial period to the clients to check out their services. These trial periods offer an excellent opportunity to test trading signals and to decide on multiple trading methodologies. Usually, most service providers offer a free trial period ranging between one and four weeks.
Before choosing a signal provider, ask yourself questions such as am I looking for short-term or long-term signals? Are the signals built around fundamentals or technical analysis? Or is a combination of the two better for you? Your answers will help you to evaluate the signal effectively and take a decision accordingly.
Choose a signal provider after evaluating the degree of support given to the customers. It shows how much a provider will care for you. All signal service providers must answer all your queries. Furthermore, you must have direct contact with the signal provider.
Check Out: Top 7 Forex Trading Signal Services
Essentials of a Forex Signal Service
To sum up, you should always choose a forex signal service provider that:
- Deals with the currency pair of your choice
- Offers a BUY or SELL button - the direction in which you trade is important
- Shows your signal status - active, get ready, or closed.
- Offer self-explanatory entry price
- Provides automatic closure for stop-loss
- Offer a take-profit option to take your profits at the right time
- Provides detailed real-time market analysis and regular trade alerts
Choosing a good forex signal provider needn’t be complex. Just make sure you choose a provider with a reliable track record - one who’ll meet your trading needs with excellent support and offers good entry and exit points.
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