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How To Choose A Forex Signal Service

May 21, 2008
If you do a search on the internet you will find numerous forex signal services, most of whom will be claiming their signals are the best. They will often have very impressive-looking performance tables, but you have to be very careful when choosing a forex signal provider.

It's all too easy to get sucked in by a company's past results and start dreaming of how you're going to spend the profits you are going to make by following their signals. It's important to remember that the past results of a company's signals do not always tell the whole story. Very often the figures will be exaggerated or hypothetical in nature.

For example, you will often find that a signal provider will boast about their past results by using the best result possible from their signals. In other words if they make a profitable sell signal and it goes down 50 points before retracing back to it's original value, they will claim that this signal resulted in a profit of 50 points. The reality however is that no trader, however skilled he or she is, can consistently get out at the top or the bottom of a move.

So these types of signal providers are not the best ones to join in my opinion simply because they distort their figures and probably don't even trade them themselves. If you find that the signal provider doesn't actually trade the signals themselves you have to wonder why not if they are as profitable as they claim.

Instead you should look for companies run by a professional trader or team of traders who do trade their own signals. This not only gives you added confidence in their signals but also ensures that they don't massage their figures when it comes to past performance.

It's also a good idea to join signal providers that have their own live trading room. This ensures that not only do you learn from the trader who's constructing the forex signals, but you also learn some valuable tips and strategies from other traders as well.

Another point to consider is whether or not they have a free trial period. Forex signals can be very expensive so you really want to find a company that offers this service otherwise you're going to have to go in blind and potentially risk your hard earned cash before finding out whether a company is any good or not.

So to sum up, when choosing a forex signal provider you want to find one that's run by a professional trader who has a good past performance, trades his own signals and ideally offers a live trading room and the option of a free trial before joining.
About the Author
James Woolley runs a forex blog where you will find all the latest forex tips and strategies including news of the best forex trading signals
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