This is a guest post by Neil Refeld
If you are new to the forex world, are not profitable yet or don’t have the time to trade full time a forex signal provider can be a stress free way to generate profits from the forex market. Most people interested in Forex do not like the idea sitting 24/5 in front of their computer glued on the charts and analyzing data. Handling this kind of work to someone else and just check the account for profit and losses from time to time is possible by using a forex signal provider. Choosing a reliable and profitable provider can be quite tough and a lot of things have to be taken into account when searching for a trustable partner helping you with your financial gains.
Here are the 11 most important points that need to be checked when looking for a reliable provider for forex signals that you can follow for profits in your own broker account.
1. How are forex signals delivered to the client?
Most services deliver their forex signals in a way the receiver has to act on his own to execute the orders at the market. Most common ways are to get the signals by email, SMS or in the signal providers member area. If signals are delivered like this the customer has to be ready for action 24/5 to execute any orders in his trading platform. The best way a forex signal service can provide their signals is if they send them directly into customers trading platform like Metatrader so all orders are executed fully automated and the only thing the receiver has to take care about is the connection of his trading software to the internet and broker.
2. What kind of signals are delivered?
A lot signal services have pure lag of information at what prices they exactly enter or exit the market so it is extremely hard to copy their trading 1:1. As this is a key point when following a signal service you want to make sure that you get presented all information you need to enter and exit the market at almost the same price levels. Some providers even don’t present information on when to exit the market at all or do publish a exit price in there trading history that was never reach by the market long time after the position was closed. So make sure you check and ask the customer service what signals are provided to you and when.
3. Does the provider offer a full detailed performance history?
For most people this is the most important thing to look for when choosing a forex signal service. Yes, a profitable history is absolutely essential but you need to pay full attention to how it is presented to you. You should be able to see every single trade with full details so you can reconstruct it on a chart. That is why a performance history should contain entry and exit price and the exact time down the minute or even to the second when the orders were filled by signal providers broker. Only with this information you can check if the listed trades made in the past are reliable.
4. Is the targeted profit the signal service claims realistic?
Everybody who is searching for information in the forex area comes over sites that are promising huge amount of profits every month and that you will be a millionaire in almost no time. Sure, to double an account in a very short amount of time can work but this includes an high risk strategy which is destined to fail long term for sure. Banks pay you 3 % interest per year. So be realistic about what ROIs can be achieved with a mid-low risk strategy. Even in forex you have to think long term and be patient even if there are periods with some loss or less profits.
5. Does the signal service offer a money management strategy for his signals?
To get the entry and exit points presented is not enough information to to trade a currency against another. If a forex signal service wants to guide you in trading it should provide you with the amount of risk you should take with each position and tell you what lot size you should open with each position to manage your risk based on the account size you are going to trade with.
6. What is the minimum account size to start with?
Before signing up for a service you should look what capital you need to follow the signals. Most service do not mention what minimum amount of money you need to trade their strategy. If you don’t find any information about the minimum account size on the website do not hesitate to ask their customer service about that important criteria.
7. Are some reviews or testimonials available on the site?
Most websites of forex signal services are very static and unsocial and don’t offer the customers to interact with each other or the support service in public. If that is the case you can be very sure that there is something to hide. Look for good transparency and if comments or testimonials are over the top or if they can be taken for real.
8. Does the site want you to work with a specific broker?
If the forex signal service wants you to sign up with a broker that he recommends and/or gets commission it is a deep red flag. Why should a forex signal service provider that is profitable want to earn commission by recommending brokers? It is a different story when the broker has to meet some criteria to follow signals such as hedging or micro lots. Now you could look for brokers which offer those kind of things. But never trust a signal provider who wants you to sign up with a broker via his affiliate link.
9. Can you see some example trades that you can rely on?
A full detailed performance history with as much information as possible is essential. Because we like to visualize you should check the providers website for some screenshots or videos of past trades so you can be sure that they have been trading their own signals.
10. Can you use a free trial period to test the signals on a demo account?
Before apply signals from a provider in a live account it is highly recommended to test on a demo account for some days. Many signal services do offer a free trial period to test and get used there system and interface they use. If there is no trial period offered and no way to put the service on a test for free it is pretty hard to believe that the offered signals can be used to trade profitable.
11. Do you get instant and serious answers on your support requests?
Another way to build trust is to send some questions to the support if you don’t find any answers on the website about your request. If you get answers in less then 24 hours to all your questions that make sense to you can make another cross on the pro site for this forex signal service and may consider signing up for a trial period to see what their signals look like.
Neil Refield is the head of customer service at the forex signal service German Trading Group which is one of the few forex signal services that fill all the above criteria. They are a group of traders operating in forex business for more than five years and gone public to offer their trading to interested followers in September 2010.