Forex Signal Services – Good Idea Or Scam?

The idea of having a successful, professional Forex Trader tell you what to trade, when to enter, how much to risk, where to take profits and so on, is a very enticing thought. After all, if he can trade and make money then all you have to do is follow his trades exactly and then you must also make money.

Or not?

Let’s examine some potential difficulties that stand between this idyllic dream and reality.

The “profitable currency trader” is actually someone who gave up trying to trade ages ago but now just uses good sales tricks to entice people to part with their money for a month or two. Just long enough to realise that this is not going to make you any money, let alone fulfil your dreams of getting rich!

The trader really can make money himself and truly believes he can do so for others but:-

• he doesn’t have the technical knowledge to overcome the challenges of getting information to subscribers quickly and reliably
• he trades in such a manner that sending an email, text, tweet or whatever is simply too slow and unreliable to allow the vast majority of people to actually place most of the trades
• he trades markets that most people don’t have charts for and cannot trade with their current broker
• he places unreasonable demands on subscribers – like having to use “his” broker – for which of course he collects rebates
• and so on….

Most professional forex traders are very “hands on”. They spot particular price action and patterns; they see support and resistance come and go in real-time; they enter trades based on situations that exist for just moments and then use the art and science of trade management to maximise the profits or minimise the losses. Even if you sat next to them you’d have a hard time keeping up with what they’re doing.

Asking a trader to only trade at particular moments in time, say at the end of an hourly bar, and to predict targets and stop losses, that will not change until the next bar finishes in an hour is like wearing blinkers and having both hands tied behind him.

The results he could achieve must be considerably poorer than he is actually capable of.

The alternative is to issue signals whenever he is about to open a new trade, or modify an existing one. This relies on texts, emails, tweets, and the like. Will you get that email within a few seconds of him sending it? Will you be at a PC where you are able to access the trading platform in seconds? Or will you miss the very order to take this profit before it disappears?

We believe that signals can only work at specific times of day and then only slow, longer term trades can possibly work, and even then the results will not be as good as the trader himself could achieve.

None the less, a good forex signal provider can make a signal service worthwhile but do your homework, start with a small account and small trades and don’t expect to get rich soon. But maybe book a nice holiday……

Can A Forex Trade Alert Service Make Profits?

I have been trying to trade Forex for a couple of years and am still waiting to become successful. Can a “Signal Service” that tells me what trades to do make some money for me whilst I learn?

That question is one I must have been asked a hundred times in the last couple of years by aspiring traders who have contacted me.

The honest answer is, maybe, maybe not. It depends what you want…..

Most signal service providers are websites set-up especially for the purpose of “selling” trading alerts to customers. Check it out – type “forex trade alert” into Google and the list will give you 100’s of websites dedicated to giving you a signal service.

WHY?

Because it makes them money and there’s nothing wrong with that providing they deliver what they promise – so do they really work?

Without signing up to 20 of them and using their alerts for many months there’s no way to say for sure but there are clues in what they say and claim. By the way I suspect price has nothing to do with the success or otherwise of the service.
Several have claims for historic results ranging from the very believable 64% annual profit to the outrageous 780% annual profit. As a Professional Forex Trader for over 6 years let me tell you the truth – it’s possible for a good trader to make a 100% profit on their account every 2500 bars. So the timeframe is irrelevant (although longer timeframes DO have higher success rates) . If a trader trades a 5 minute chart then he’ll only be able to concentrate on maybe 2 markets and trade for 4 hours a day which means making 100% profit every 5 weeks. This is the very very high end of successful trading. It’s is impossible for a trader to use this sort of trading as a trade alert service as trades are made in seconds and decisions change with market conditions continually.

At the other end of the spectrum is trading daily charts where maybe 20 markets could be traded which means 100% profit could be made in a little over 6 months.

This is the top end of success for a professional giving his daily trade alerts as a signal service. More likely would be 100% profit in 9 months to a year.

Even this seems fantastic when compared to the paltry profits from “fund managers”, banks, and most other readily available and accepted forms of investment. A good hedge fund manager would achieve maybe 40% annually but here’s the difference – they HAVE to invest the money in the fund. If they have a pot of $40m then most of that is expected to be invested into “something” which will make money. The pressure is to not have money sitting doing nothing in a cash account but to be seen to have it at work for the investors in the fund.

An individual or very small private fund forex trader has no such pressures. He can decide when and where to “invest” and how much according to ever changing conditions. There will be times when for maybe days or even weeks the market is such that he decides not to trade at all, to sit back and wait for the right conditions, to only play the game when the odds are in his favour.

That’s why a private professional trader can easily out perform a well known fund manager and that’s where you can benefit from a  signal service.

Look for a “Professional” forex trader offering signals based on his knowledge and experience, not some robot or Expert Advisor software – they are simply rubbish to con the unknowing.

Signals from 4 hour charts and upwards are the only practical way to offer such a service. Ensure signals are completely unambiguous and clear with no interpretation required by you.

Yes, you can make money from a profitable signal service but you need to do homework to ensure you do it right.  And most of all start small when you have decided on one and use the profits to grow you account – maybe slowly add to it as it grows if it really is successful. DO NOT expect any signal service to get you rich quick, if you do you will join the thousands who lose money by choosing the hyped up, exaggerated sales pitch offered by those who are in the game simply to make money out of you.

Honest, and successful forex signal services are out there waiting for you.

Forex Trade Signals - The Basics Of Money Management

Forex trade signals gives anyone, anywhere, the opportunity to make a very nice living . What better way to do this then getting up each morning , having a cup of coffee , and then setting up your upcoming trading day while still in your boxer shorts ? Pretty easy ! Hang on because although it can be relaxing as well as easy most realize quickly that it isn’t all so easy. That’s why this article is dedicated to basic money management principals - because if you know the basics of money management you are more likely to succeed .
So why then , if money management is really so important, do so many people ignore or overlook it ? That’s a wonderful question that you should really consider if you’re planning for success in this market. I think that this aspect of trading is skipped by people, money management principles, because it is not "sexy" . Really, how many accountants that are interesting do you know? That’s what money management is all about; more and more boring numbers.
In reality, it is only going to be boring if you approach it in this way. It’s going to be a drag if you look at it that way and you won’t want to do it . If you have the attitude that this is an important part of becoming a forex trade signals professional and focus on the huge success that lies just ahead of you if you take the time to consider your tactics of money management …. then it can turn into something that is exciting.
Now you’re convinced that this area needs to be focused on . Awesome! What is it all about then anyway ? In order of importance here are the keys , follow these and you’ll be off to a great start : don’t over leverage yourself , be consistent with the amount of leverage you use on every trade , never add to losers but add to winners . That is all . Of course there are quite a few tributaries to each of the aforementioned but they are quite powerful alone.
Next time you’re asking yourself why your level of trading hasn’t evolved the way you wanted it to , remember the keys to managing your money . One final aspect that is important to consider is this : unimaginable psychological benefits can be provided by good money management. These benefits will help you go beyond what you though possible when it comes to your trading. Why? If you have no fear of losing money, or you know you have a solid plan in place that will ensure you’re always around to trade another today , then you can look at markets from a state that is relaxed and clear and this will add serious dividends to your effort .
Forex trade signals can be incredibly challenging and rewarding at the same time. Keep in mind that the best keys to success are usually the most uninteresting, simple, and obvious things out there. You’ve wanted to find the holy grail of trading for so long - and money management is the key.

How Your Portfolio Can Benefit From Forex Trade Signals

Forex trade signals can be done in so many different forms and for various reasons that is often a daunting task just to figure out where to start . After all, should you open up an account at a brokerage that specializes in FX trading , or do you want an account with a brokerage that lets you trade futures, stocks, options, and more ? Like this decision isn’t overwhelming enough, then you have to figure out if you want to use FX trading as a speculative or hedging tool, long or short term, etcetera. There are, needless to say, many things that one must consider before starting out .

Although the above questions alone can start a big response , in this article we’re going to focus on the basics . The easiest way to get comfortable within this world of FX trading is to go ahead and open your account with a fx trading specialist brokerage . Wondering what broker to choose ? That is a whole other topic for a different time . Before depositing money, just be sure to do some due diligence!

Once your Forex Trade Signals is operation and you have things running, you need to get a firm handle on what exactly it is you’re participating in . With our example, we’re suggesting that because you opened your account with a broker specializing in forex trading, you’ll begin by trading cash or spot contracts. Without turning this into something complicated, this simply means that you’re trading current price in the global market right where it is that second. If 1.3200 is what you see the Eur/Usd pair is trading on the screen then at this rate you can sell Euros against US Dollars or you can buy US Dollars and sell Euros at that rate . There is a small spread built into that price you’re seeing and this is your cost of entry for taking the trade . Look for a broker going with a spread of 2-3 pips and nothing more .

Because speculating can at times be pretty tough, even for the pros like me , let’s stay that you want to start with the goal of hedging the United States stock portfolio. Since your stock portfolio is denominated in US Dollars if the stocks go up in US Dollars, you may make money but that gain could be cancelled out by a weakening US Dollar . You want to hedge this part of the portfolio and have decided to buy Euros against US Dollars in your brokerage account . This way as your stock portfolio is suffering when the US Dollar weakens against the Euro , the downside risk is hedged because of the gains you get by buying the Euros .

The above is probably one of the easiest and most basic ways of adding a forex trade signals component on to your portfolio. There will be several other articles in the future that talk about more advanced ways to speculate in this global market , but this is a great place to start .

What Do Forex Trade Signals Currency Pairings Mean?

When talking to people who have never tried forex trade signals before, even those involved in futures, stocks, and bonds , it always reminds me that sometimes even the most basic foundational elements of this global powerhouse of a market have to be explained . So let’s jump right into what the pairings mean, what the main pairings are, and what the cross pairings are .

What exactly is a currency pair ? First we’ll look at the Eur/Usd which has against the Euro, the US dollar as the bas currency within this pair. What is the meaning of the pari when I have a price quote that is 1.3200 on the Eur/Usd? The easiest way to remember the answer is this : take your currency pair base , which is the US dollar in this case , look at the price quote of 1.3200 , then you say, " to buy 1 Euro it will take me 1.3200 US dollars ." The price quote means exactly that . Perhaps a few months later you check out the price quote and now it is 1.4000 this tells you that the US Dollar is now weaker when compared to the Euro because it now takes 1.4000 US Dollars to buy 1 Euro . On the other hand, if you find the price quote is 1.2500 down the road, then the US dollar is getting stronger because you’ll only need 1.2400 US dollars to purchae a Euro.

Forex trade signals can become even more challenging when for the Usd/Jpy pair you see a price quote that is 100.50. Using the above method , simply take the base currency of Jpy take a look at the price quote that is 100.50 and that is how many Jpy it will take to buy 1 US Dollar . That is fairly simple, isn’t it ? In the future you shouldn’t have difficulty understanding a pair and its price quote when you see a quote window or chart screen .

Now that price quotes can be read, what are the main pairs and cross pairs ? The main pairs are the world’s strongest economies agasint the US dollar . A few of these pairs are Eur/Usd, Gbp/Usd, Aud/Usd, Usd/Cad, Usd/Jpy, and Nzd/Usd . The US dollar is not involved in a cross pair such as Eur/Jpy, Gbp/Jpy or Eur/Gbp to name a few of the more popular ones .

Hopefully you’ll be helped by this article if you’ve been feeling intimidated the forex trade signals landscape in the past . You may need a bit of time to get used to this with all of the different currency pairs, time zones, and economies . Once you begin realizing how the pieces all go together it’s really not that bad - and many of us think it’s actually quite fun !

Forex Signal Service And What Forex Trading Is All About

Well, first and foremast , forex signal service, like other speculation forms , has one very important goal that lies above all else ; make some money ! If this premise is what we start with , that our goals is making money, how is this achieved in our massive global market?

First, figure out whether you are a technical trader or a fundamental trader or both . Later we’ll have more articles on this topic , but now let’s just assume you like keeping up with current events and world affairs and are therefore attracted to the fundamental side of the game . Then you have to ask, what fundamental factors are the most important driving the currency movements ?

If the fundamentals is what you’re focusing on , one main thing is going to drive the decisions you make in forex trading; the interest rate differentials between various countries. You may wonder what an interest rate differential is? Good question ! Imagine that the Australian Dollar has a 4% short term interest rate. This means that if you’re a debtor in Australia this base rate helps to determine what you pay on mortgages, credit, and other debt. Also, if you happen to be a creditor you can use as the base rate this 4% short term interest rate that determines the income you get on investments ; things like certificates of deposits (CDs) at the local bank . Then suppose that the short term interest rate of the US Dollar, set by the Federal Reserve , at only 1% . How does all I’ve just said affect the movements of currency?

If 4% is the short term rate of the Australian Dollar and the short term rate of the US Dollar is 1% it comes down to something really as simple as this : investors want their investments to have a higher yield and because they can get more interest in Australia funds are then moved by them to the land “Down Under” . This shift in investments of capital flows leaving the US and going to Australia weakens the US Dollar since demand is smaller than supply and the Australian Dollar will strengthen since the demand is greater than its supply. Basic economic fundamentals at work here ; value rises when there is higher demand .

The next time you are thinking about your own forex signal service and what position to put on next , you should ask, ” what country has the most liklihood of having higher rates moving forward and what country probably will have the lower rates moving forward?” Then, buy the currency that you favor for higher interest rates and sell currency favored for interest rates that are weaker and watch your profits grow as investors leave currency that is weaker and go towards the one that is stronger. This is the essence of forex signal service.