What to Look For When Joining A Forex Signals Service
Forex trading is becoming more popular with each passing day and companies providing brokerage services in this market are seeing a vast increase in clientele from all over the world. This explosion in retail forex trading has also triggered a huge demand for other services associated with the industry. Companies that offer forex trading signals services have become options for traders who want to start trading the market without necessarily possessing trading skills.
Unfortunately, while forex and binary options markets and the brokers that operate therein are regulated, the forex signals sub-sector of these markets is not. So you have a situation where there are so many providers of signals services without a watchdog agency to vet such services. This has left the job of vetting forex or binary options signals services squarely in the hands of those who want to use them. Without a standard methodology of vetting these trade signal providers, how do traders know which signals services are the real deal?
Here are a few guidelines to help you choose a good forex/binary options signal provider service. This is by no means a Holy Grail, but can be used as a suitable guideline to aid you in your search for a suitable signals provider.
Step 1: Choose a Service that Has a Live Trading Room
The internet is full of advertised signals services where the providers have probably never even traded the markets. A trader who had been burned made a startling revelation about a provider on an online forum, alleging that the signals provider would open both long and short positions on the same asset. According to the allegation, the signals provider would then showcase the profitable trades while hiding the losing trades, in a fraudulent bid to attract clientele.
Surely, you would not want to end up with such a provider. You want to put your faith and money on the line with people who walk the walk. There are providers that help you snipe the trades; trades that they execute themselves. A forex or binary options signals service that provides a trading room where subscribers get to see the providers also trading the same signals they give out is the most desirable scenario.
Step 2: Choose a Service Which Offers a Free Trial
In order to check to see if the forex or binary options signals service can truly snipe the trades, it is necessary to evaluate the service at no financial risk. The only way to do this is to utilize a free trial period. The free trial, which can be anything between 3 to 7 days, enables you to see how the signals provider handles the trading process. For instance, a signals provider may deliver signals which are based on very risky strategies. The signals provider may not even have used a stop loss, which could have exposed the trade to far greater risk than a trader can ordinarily handle. So while the trader may have succeeded in picking up pips in profit from a signals provider, would this have come at a nerve-racking cost? Do you have to allow a trade head so far into negative territory before it turns a corner? The free trial will therefore expose the signals provider’s trading style and subject it to intense scrutiny. At this stage, you can then decide if the signals provider’s trading style is just right for your risk appetite or not. Therefore, a free trial is an integral part of the process used in making a choice of whether to subscribe to a forex/binary options signals service or not.
Step 3: Evaluate the Service for Consistency
When your free trial is coming to an end, you need to perform an evaluation to see if the service actually delivers on its promises. Apart from evaluating the trading style as was described earlier, you should at this time also take a look at the past performance of the signals service. While it is true that past performance is not an indication of future results, you need to look at the past performances to see if there is consistency in the trading results. Myfxbook provides a very transparent way of looking at the trading results of signals service providers. From the results, you can tell where there have been embellishments and where things were done right. Ensure that the signals service has verifiable results that can be studied on third-party verification sites for consistency.
Here’s a summary of what you need to do before choosing a forex/binary options signals service. First, ensure the provider has a trading room where their own people actually trade their own signals. Evaluate their service using a free trial period and also perform a consistency check of past results using an accurate and verifiable source.
At the end of the day, it is possible that you may still end up with a signals provider that despite its previous stellar results, could eventually fail to meet your expectations. For this reason, it is better you start off with small amounts of money to get a peek of where the journey will eventually take you before you commit larger amounts into the trading venture.
Do not trade with money you cannot afford to lose.