By Gorica Gligorijevic
Almost all Forex traders with their trading system dream of founding signal service. Think, having thousands of subscribers getting your trading signals for a $50 monthly fee. That is everyone’s dream.
So, let’s say, the signal provider is a trader who grants access to the data on his or her trading operations allowing other traders to copy them on their trading accounts. Signals can be provided either for free or on a financial basis. You can be a signal provider.
To become a Signal Provider, you need an active MQL5.community account.
Forex signal provider is a trader who trades on his own life or demo account and sends the same forex signals online to his followers. In most cases, this process is automated and takes no time, literally.
Screenshot from MQL5.community
The signal provider doesn’t have to do anything manually to send forex signals indicator to his copiers. With a wide variety of forex signals services available today it is important to learn how signal providers are selected and ranked.
There are a lot of platforms that allow anyone to register and start selling signals without any preliminary verification of traders experience, knowledge or ability to manage risks. Since after registration trading results of a signal provider are displayed publicly, users can make their own analysis to determine whether the strategy worth following.
But there is another approach: the trader must fit certain risk/reward requirements and volatility levels before being accepted as a signal provider.
This method helps a trader make sure that signal seller only offers reliable strategies and don’t accept high-risk ones for copying. It also fits well into copy trading advice and regulations of many countries. All providers are then ranked based on proprietary Forex signal indicator algorithm that takes into account maturity of a strategy (how long has it been executed for), maximum drawdown, regular profitability, volatility, the average number of simultaneously open trades and many other parameters.
But, remember that this is an extremely competitive arena.
Because information is so accessible via the internet, you can receive it anywhere as was mentioned above, so that you have round-the-clock access.
A Forex trading platform or “hub” gathers the necessary information to transform it into the signals that you receive. An additional safeguard is present in the fact that Forex companies are extremely careful and consistently pay attention to details when sending these signals to the various brokers, dealers, and individual investors.
Many, many forex traders are looking for quick money, getting rich in several weeks. Some forex signals services may have a good run for a few months and then it’s game over. A lot of these guys use crazy stops and those that do use stops use loads of taking profit orders. A professional service will not give so many take profit orders and tell the subscribers to pick one or do whatever they want with it.
Being a forex signal provider is measured by consistency. If there is no consistency it is a waste of money. Any signal provider that promises fast money or big profits is lying to you and to itself. No one can guarantee that you will make money, because there are good months and bad months. Selecting the right profitable signal provider is one of the most difficult tasks, especially for the new traders.
Many, many forex traders are looking for quick money, getting rich in several weeks.
Some forex signals services may have a good run for a few months and then it’s game over.
A lot of these guys use crazy stops and those that do use stops use loads of taking profit orders. A professional service will not give so many take profit orders and tell the subscribers to pick one or do whatever they want with it.
Being a forex signal provider is measured by consistency. If there is no consistency it is a waste of money. Any signal provider that promises money or big profits is lying to you and to itself.
No one can guarantee that you will make money, because there are good months and bad months.
Selecting the right profitable signal provider is one of the most difficult tasks especially for the new traders.
How to pick the right signal provider
A lot of forex traders use forex signal providers to assist them in profit. Traders who try to make profitable trades can leverage off successful forex traders by copying their trades. Not all the forex signal suppliers out there are trustworthy. Attempting to figure out which ones are scam artists and which ones are genuine can be an awful task.
Finding a reliable forex signal service can seem like a challenge.
There are signal providers that are professional and honest, of course. But unfortunately, some providers do not always have their subscribers best interest in mind. It is up to you to make sure that you are working with a trustworthy forex signals provider that you can have confidence in. There are several things traders would consider when are going to pick your signal provider. A trader should be aware that there are a lot of hardcore scammers in the market working very hard to provide fake, low quality and substandard forex signals.
Most of these hardcore scammers have no background or training in any financial matters and usually feed the trader with performance statistics that are imaginary but yet convincing to a trader who is not smart enough. The best way a trader can deal with this problem is by spending at least 5 minutes looking at what other traders are saying about this respective signals provider. This will help him or her in making a proper judgment.
Another way is by looking at the level of detail contained in the signals.
If you realize that it just entails a few charts with a loss or profitable line, you will have a reason to think twice before following such signals. You should look for testimonials about various forex signal providers available in the market. Be aware of what other players in the industry are saying about the available signal providers. This will enable you to choose the best provider in terms of accuracy, quality, timeliness, and affordability of the services offered. You should check the number of TPs the providers have in one trade. And, also, how the providers put together the performance statistics.
The best way a trader can deal with this problem is by spending at least 5 minutes looking at what other traders are saying about this respective signals provider.
The bottom line is that any trader who wants to be profitable in the long term should start learning by himself or herself about forex signals through experience and self-training.
How to separate the websites of scammers from genuine suppliers
Their sites are so similar and competitive. Sometimes you can see forex traders getting in the scammers’ site rather than the genuine forex signal supplier. When they find that the signal is not profiting, they are already passing the point of no return. The scammers had taken the cash and it is past the point where it is possible to do anything.
These scammers will give you entry and exit signals. But they will not provide you information on how they find the entry and exit points. They want you to follow their signals blindly, that’s all. The scammers will promise you a great profit, a huge return with minimum investments. With all the fantastic promises, you will be motivated to subscribe.
That is the moment when you will find that whatever you have subscribed to is a pack of lies.
The types of Forex signal providers
Forex Signal providers are typically separated into two different groups based on how they generate their trading ideas – technical analysis and fundamental analysis.
They base their trading decisions on chart analysis including support and resistance levels, candlestick patterns, price channels, market structure, or other technical approaches. Many technical analysts have a proprietary method for analyzing the markets and the highly successful ones have spent many years researching and testing their methodology over historical data and in real-time market conditions.
Who base their trading decisions on economic and news related data. This could be in the form of long-term interest rate analysis, inflation, central bank policy, employment reports, sentiment surveys, and more. Some are longer-term position traders while many others are shorter-term traders that try to catch volatility spikes after an anticipated news release.
Some traders may think “reliable” means having a high win rate, but that is not really what you primarily want to be looking at. Actually, win rates are not that important as a metric by itself. You must also analyze the average risk to reward in conjunction with the win rate.
There are strategies with 90% win rates that can lose money and then there are strategies with 30% win rates that can make money.
Another factor to consider is the technology the signal provider is using.
Do they have a reliable platform to send out notifications and are there multiple ways for you to receive the alerts? Something else to look at is the depth of detail that the forex buy sell signals provide. Do the trading alerts always provide stop-loss levels and targets or do they only provide superficial information such as entries but no exit details?
These are some of the factors you need to consider.
Sign up for a Trial
Sometimes this is the best way to get started is by signing up for a forex signals trial. You may get a real sense of the quality of service by diving in and taking a test drive. Many providers offer a 1 or 2 week trial for members.
Join their Email List
Another way to find out the quality of information you will receive from a provider is by joining their email newsletter. You will find the value that they provide for free so that you can evaluate whether their premium forex signals service will meet your expectations
Check their Track Record
All reputable FX signal providers will provide a performance record detailing their published trades. This is a good way to find their average pip profit per month, their risk parameters, average win percentage, and other related metrics.
Yes, simply Google them. Are they mentioned in any important trade publications or articles? What type of social following do they have? Do everything possible to find to whom you are dealing with. Just don’t be one of those naysayers.
Check it, try it, test it and make your own conclusions.