Most Forex signals services don’t live up to the expectations. In order to increase your odds of success in finding a good service, you should find out:
1 – Past performance – Make sure you check the service past performance and maximum drawdown. While no matter how good is the past performance you can’t know how well will the service perform in the future, it pays to check the historical performance and eliminate the riskier services.
2 – Historical Return on Investment (ROI) – The past ROI and average ROI allow you to easily compare different Forex signals providers. Combined with the historical drawdown, you can define some risk management rules to protect your account.
3 – Deliverability Speed – If the forex signals service doesn’t use a solid and real-time communication system, there’s not really a point in testing it. The Forex trading signals need to be delivered quickly and in real-time in order for you to have the chance to analyze them and take your decisions before the currency pair moves.
4 – Starting Capital – Check out if the minimum capital requirement is suitable to your trading account. Some systems require larger accounts in order to use smaller margins and still deliver solid performance. If your account is smaller than the required starting capital, you might be forced to use higher leverage which will drastically increase your risks.
5 – Read their reviews – Take some time to research about any forex signals company and to read their reviews. Find out what people think about their service. This might allow you to find some past problems, some performance discrepancies, and even the service popularity.
6 – Free Trial / Guarantee – Before you sign up for any Forex signals service make sure they offer you a free trial or a guarantee. The best way to test these kind of services is on a demo account without risking any money. To accomplish that goal, and to make sure the service developer stands behind his product, they need to offer you a trial period or a guarantee. If they don’t, that’s a big red flag.
7 – Does the provider really trust in his service? – This one is difficult to know. But if you can find out if he really trades with his own money in these Forex signals, that’s a great indication of the service quality.
8 – Are the signals mechanical or manual? – Some Forex signals services don’t tell exactly where the signals come from. In that case it’s better to contact them and to ask them if the signals are generated in some automated Forex system or if a real analyst is looking for the opportunities and managing them. Between both Forex signals services, the manual signals tend to be more reliable in the long-term.
9 – What’s included? – As mentioned above, the best forex trading signals services offers you much more than just signals. They offer you Forex education. This education is valuable not only to understand how their system works as to adapt it to your own risk profile. Better than getting signals is to understand how are they created, and what can you do to improve their performance and reduce their risks and drawdowns.
10 – How long have they been online? – The longer their history, the better. The worst Forex Signal providers don’t last long. The few quality services can have a growing audience and a long performance history.
Last but not least, trust your instinct. If a Forex signals service seems too good to be true, it probably is. If you see too many claims but few proofs, that’s another red flag.
Trust your instincts
If you suspect something is not right, or if you try to contact the service provider and get no response, there’s no point in even testing the service. There are hundreds of Forex signals providers, but few can deliver a good service.
Never look at a Forex trading signals service as an easy and quick way to make money in Forex. Look at it as a trading tool.
Always test any service in a demo account, and remember to apply money management rules to reduce your risks.
And never forget there’s no substitute for real knowledge. Even if you want to test a Forex signals service or an expert advisor, you need to learn how to trade successfully on your own, and understand exactly how the service or software generates the signals. This way not only you can filter some trades, reduce your risks, and you won’t rely in one single tool.
Relying in just one system or software might look like a shortcut for a beginner, however it’s not… If you don’t know how to trade Forex and just rely in a signals service, one day the service won’t work, and you won’t be able to keep trading successfully. There’s nothing as good as to rely on your own, learn and improve your trading skills, and be sceptic on all the “get rich quick” kind of programs.