Forex signals providers has become popular services nowadays. Most forex traders use it as an assistance analytical tool to help them take the proper trading decision. This services are run by forex trading experts who possess a high level of market analysis experience where they can combine several indicators such as moving averages, trend lines, MACD, stochastic…etc. in order to generate an entry and exit signals which implies a high winning probability.
Most forex signal providers offer their signals only for the popular currency pairs such as: EUR/USD, USD/JPY, GBP/USD and USD/CHF. These currency pairs constitute about %80 of the market volume and are traded extensively by the majority of forex traders everywhere.
The forex signal providers offer their services for the public traders on a monthly subscription basis, where they send their signals out to their members through emails, SMS, or cell phone. The trader may be charged a subscription fee which ranges between $50 and $150 per month based on the service quality and the numbers of currency pairs they provide trading signals for.
The forex signal providers just send the entry price, stop loss price and take profit price. They do not offer any additional technical information about the method they used to generate their entry and exit signals. This makes the trader blindly follow their signals without being able to make a proper judgment on their signals quality unless he or she has a high degree of technical analysis experience.
How to Determine the Quality level of a Forex Signals Service?
The first step to make a judgment on a service is to ask for their activity history, this will prove or deny their claims.
The common mistake which most traders make is that they completely rely on these signals as a sole indicator to enter the market. Really these services save the trader a lot of time watching the market trying to pick a trading opportunity. However, the right technique should any one do is to use these signals as an extra indicators which help qualify his or her trading decision, in other words, the trader should make his own analysis for the price action and end with a personal prediction to the market movement based on his experience, then use these signals to approve or deny this decision.
Most traders use the signal provider services for a short period of time before making a judgment whether it's a good or bad service. The next step to make a fair judgment, the trader should use the service for a relatively long period of time and make his statistics about the quality of this service and whether he or she will continue using it or not.
As a trader, you should not relay completely on signal provider service. When you generate your own signals, you combine several trading indicators like trend lines, moving average, stochastic…etc, in order to get a high probable trade signal. Meanwhile, providers might choose to employ just one indicator in order to generate their signals, which may not be 100% accurate. This justifies why you should compare and contrast signals between one another and for the movement of the currency price.
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