For new forex traders, one of the best ways of learning the profitable techniques is to see them in action. However, every forex trading beginner does not have the benefit of having a forex mentor. Such individuals, fortunately, have the option of signing up with forex signal providers and see their skills at work while making money.
Forex signal providers will send technical signals to your trading system for a small monthly fee. You can use these signals to get an understanding of how experts view the market as well as use them directly to make profit. Since there are so many forex signal providers active in the forex market and everyone may not be ideal for you, the trick is to find the right one. Here are some tips for the same.
Historical Success Rates
Most systems that support forex signal subscriptions will give you access to the success rate of various forex signal providers. Success rate is basically the percentage of signals that win of the total that the signal provider sends out. Ideally, you should not settle for signal providers who boast of a success rate less than 80 percent.
In addition, you should also see how long the forex signal providers have been active because 100 percent success rate with only 10 signals provided is not a good measure of their skill. On the other hand, you do not want to end up overtrading by using multiple signals from a provider in a single day either. Find a balance between the two.
Use of Special Orders
Regardless of how successful some forex signal providers are, unless they provide information on the use of special orders with each of their signals, you should give them a wide berth. Most expert traders use special orders and if your signal providers do not then you can be sure that they are either lazy or do not have enough trading knowledge.
Varying Time Frames
Different traders use different time frames to trade in. Moreover, different traders also have different trading styles. Therefore, when you are selecting forex signal providers, you have to ensure that the time frame they provide signals for match the time frame you want to trade in.
This is important because if their time frames are larger than yours then you can be sure that they are trading with more money than you. Therefore, while their large capital with protect from drawdowns, the same may not be true for you and your account may get wiped out by a movement of only a few pips.