How effective is the use of Forex trading signals?
How many times have we seen it? A company you have never heard off before sends you an email, claiming that they have the best signals on the market. More than often, a video will be included that shows a successful trading period, urging you to sign up with a monthly subscription. Despite there being many scams of this nature the purpose of this article is not to focus on that but to look into how effective these trading signals can be.
For those that do not know, trading signal services are basically alerts that tell you which currency pair to trade, how much to invest and when to do it. To let customers know, these companies usually send out an email, RSS feed, text or alerts on their website. The actual trades are either devised manually or automatically, depending on the service.
The thing to bear in mind here is that signal services are great if they work. However, they are someone else’s trading strategies. So, customers have to rely on the talent of individuals they have never met or robots they have not programmed to turn their capital into profit. This seems a little bit too risky, especially if you want build confidence in the market. We are not trying to give signal services a bad name at all here; some of them are pretty fantastic. The point is that if you do not know how the strategies work you may be caught out at a later stage. For example, during Forex training a whole range of strategies are there at your disposal but the aim is to mould them to your trading personality. By testing and continuous adaptation to the market you eventually become the master of that strategy. The complete opposite occurs with trading signals. We could never become masters of it because we do not know how they work. All we do is hit buy or sell. It is only by analysing the signals that we can get an idea of its functionality.
The other problem is this – once the signal goes your trades go with it. Who knows how long this signal service will be effective and even used in live charts. It is because of this that you should not put all your eggs in one basket. Ensure that you use the strategies learnt in Forex training alongside any signalling service. At least this way, you will still have access to the markets once the signal service disappears and you do not have to rely on anyone else to make profits for you.