Forex trading signals are being offered more and more nowadays in different forms. From trade signals via email and sms to trade following software and websites, more and more traders are making use of trading signals as a way to trade, or as a method of confirmation in their own trading.
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Forex trading signals range from simple alerts which tell the buyer when to buy or sell a pair to sophisticated software which allows trades to be copied in real time via your Forex trading platform.
SMS and Email Signals
Traditionally, Forex trading signals started out as signals which were sent to the trader via email or sms. Trade Signals sent out in this way are generally signals from professional Forex traders and hedge fund managers. The problem today is that there are no real limitations with regards to who can publish trade signals, so there are a lot of “traders” out there providing signals who are not traders at all. If you are thinking of paying for this kind of service, try to investigate how the service works first and whether the system is actually profitable, before you invest your hard earned cash. A great resource for researching trade signal providers is to look up some reviews on them at sites like Forex peace army. These sites publish independent reviews and also alert you to the latest scams.
Another aspect to bear in mind if you are using these types of trading signals, is to consider the fact that different brokers offer different spreads and prices and therefore the signals you receive may not perform as well using certain brokers.
Trade Copier Software
A newer development in trading signals is trade copying software. This software was developed to run on your trading platform and allow you to take the same trades as a professional trader who is selling trade signals.
Once again, the same cautions apply to this type of signal as mentioned above – there is no guarantee that the trades you are copying are coming from a reliable trading source, so it is always best to take a look at the signal provider and do some research on their company and background before subscribing to this kind of service.
Online Trading Signals Offered By Companies Like ZuluTrade and Currensee
A number of companies have begun to offer a mix between trade copying software, signal provision and managed Forex accounts by offering services where you can choose the trader you want to follow. These services offer the best of both worlds, offering you the opportunity to watch a particular trader to see if they are profitable and then follow their trade signals.
These services are free and whilst that may seem a good thing at first, you must bear in mind that sometimes you get what you pay for. Also bear in mind that the success of following these signal providers also depends on the broker you are using and the spreads you are getting from that broker.
Live Trading Signals Given In A Trading Room
Although these probably don’t fall under the strict heading of “trade signals” per se, trade signals given in a Live Trading room environment can also be a way of getting professional advice on what, when and how to trade.
Tips on how to choose a good Forex trading signal service and avoid the scams
Remember that there is no guarantee that you signal provider actually knows anything about Forex, let alone is an expert so its best to do some proper research on any potential signal providers you choose.
First search for independent reviews on that particular service. When a service has quite a few reviews, its hard for them to fabricate all of the reviews so choose a service with a number of reviews and see what clients who have actually used the service think.
See if you can find independent versions of their service performance on a Forex account. Lots of services fabricate their account statements so try to find an independent version of how their system actually performs. And if you find an independent version – then analyse the account. It may have 10 10 pip profits in a row but a major draw-down of 200 pips will wipe that out and could mean they are trading with large stops – which will put your money at risk if you use them.
If you decide to go ahead with the service, don’t just place the service on your live account from the start. You may be paying for the service and eager to do so, but test the service on demo first. The last thing you want to do is pay for the service and pay more through your losses so it will save you in the long run if try the service out on a demo account first.
Finally, when you choose to use a service – make sure you keep an eye on the trades you take. Remember they have just as much power to wipe out your account as you do, so make sure things like stops and margins are in place and still exercise good money management rules – just because they are trading on your behalf, doesn’t absolve you from the responsibility of managing your own account – and your own financial future for that matter.