5 Tips for selecting the best Forex signals providerby Jeffrey Platt Content Marketing Specialist
With dozens of Forex signal providers to decide on from, picking the proper one that suits all of your needs is way from a straightforward endeavor. Although the profitability of the signals is what most traders are trying to find, there also are additional features of signal providers that may affect your trading success. During this article, we’ll provide 5 important tips for selecting the most effective Forex signals provider so you'll enjoy a long-term and successful relationship.
1. Signals should be profitable
Naturally, our list needs to start with the foremost obvious tip – the trades sent out by the Forex signal provider should be profitable. Many signal providers claim to catch up to some thousand pips per month, but without a verified track-record those numbers shouldn’t be taken seriously. Markets are unpredictable and even large market participants like hedge funds and investment banks with many professional traders do report a losing month from time to time. There’s no guarantee in profits, and this has to be an early alarm.
The amount of net pips caught per month has to be put in regard to the utmost drawdown of the signals and their reward-to-risk ratio. If a trade makes 100 pips but the potential loss is twice that enormous, the utmost drawdown over a specific period of your time mustn't be underestimated. Some Forex signal providers offer so-called “jackpot trades”, which are trade setups with a reward-to-risk ratio of 10 or more and which occurring rarely within the market. In fact, a recent study of an oversized Forex broker states that trades with a reward-to-risk ratio less than 1 are around thrice less successful compared to trades with higher R/R ratios. You will want to own this in mind when picking your Forex signals provider.
2. Trading portfolios can reduce your risk
Good signal providers make sure of all aspects of trading, which also involve creating a portfolio of trades. A portfolio of trades refers to trading a mixture of currency pairs which are inversely correlated to every other so as to diversify your risk. If a trade goes against you, another trade should get into your favor. Similarly, if a currency appreciates or depreciates to an oversized extent, the inversely correlated currency should form up for the loss. Evidence shows that successful and profitable traders listen to the correlation of their trades, and your signal provider should too. If you can’t find this information on the provider’s website, attempt to contact him directly or sign-up for a free trial to assess whether a portfolio of trades is maintained.
3. Hunt for additional trading support
Although the standard of the trades is that the most vital feature of a Forex signal provider, any additional support may come handy on your trading journey. The type of additional support is typically listed on the provider’s website, so confirm to travel through the entire description before subscribing. Some signal providers send a weekly watch-list of currency pairs they're looking to trade the upcoming week. Other signal providers offer educational material and videos for his or her clients, so you'll learn and improve your trading skills along the way.
Customer support is additionally a significant point, and most signal providers do offer a support-line via E-mail or WhatsApp. You would like to be able to contact the signal provider just in case of any problems and a customer-oriented signal provider shouldn’t mind answering all of your questions.
In this article, we’ve covered the most points you would like to think about when picking a Forex signals provider. This is often not a straightforward task, as all signal providers attempt to offer something unique that separates them from the remainder of the industry.
Signal providers who create a portfolio of trades help in reducing risk and boosting the profit-factor, and a full of life support-line via E-mail or WhatsApp shows that the provider strives to produce helpful customer support. By following all the mentioned tips and fine-tuning them to match your trading style, you’ll able to find your best Forex signals provider in record time.
Created on May 15th 2020 22:39. Viewed 65 times.