Using Forex Signals

Currency trading by which international currencies are traded has gotten popular in the last couple of years as the business has become deregulated, allowing traders with all sizes of bank accounts to get in the fray. Advertisements for fx trading systems, brokers, signals, as well as robots appear to be ubiquitous. So how does one use forex signals to earn money?

Find a forex signal service with a solid reputation. There are many services out there today. Some of them work; most of them don’t. A website called ForexPeaceArmy.com (look for a link in the References section below) has ratings for hundreds of brokers, signal services and softwares. These are all reviewed by users and the site is free to join. This is the first place that you should look to find a dependable service. Go to the site and then click “Reviews” and “Signals.” Look for a service which has at least 60 votes and has four stars or maybe more.

Review the track record. Some services claim returns of countless pips a month, but when you look closer at their records they just give you entry prices and use the highest that the trade went at to be a basis for their track record, whether they actually told you to exit at the high. For example if the signal was to enter at 1000, and the position went all the way to 1500 then reversed, they’d say that you could have made 500 pips on their record. While this is true, unless they said to get out at the top there was no way to know that it was the top. So when you review track records be sure they provide an entry price and an exit price.

Choose the way your signals are delivered. Forex is a 24-hour-a-day, six-days-a-week market and orders can come at any time. You should be able to have an option to choose whether you want your signals delivered by e-mail, by SMS, or both. As a rule of thumb you need to choose both so you don’t miss any trades.

When you get a signal make sure to enter the limit price the order will execute at, the stop loss, and the target that you’ll take your profits at. All signal providers must provide these three recommendations.

If you are interested in investing in a managed forex account just click the link. If you want to read more forex tips and advice visit us at talkaboutforex.com.