One of the most popular ways
of trading is by following "signals". If you've ever heard the term
"Forex Signals" but wanted to know more about its pros and cons, and
whether it is suitable for you or not, this article is for you.
What is a
signal service?
A Signal Service provides
alerts on trading opportunities. For example, a professional trader sits at his
desk, trading his account (or his company or hedge fund account). Whenever the
trader enters the market, he also sends an alert to his subscribers, giving
them the opportunity to enter the same trades as him. Some services also
provide an automated robot, sometimes called a Trade Copier or a Trade Cloner.
This robot will execute the same trade on the client's account, so clients
don't need to actually go to their computer and execute the signals manually.
Why should I
use a signal service?
Whether you a new or
experienced trader, there are signal services out there that will contribute to
your profits or set you on the right track to trading success.
For beginners: trading alone
can be confusing and difficult. Like any other profession, you will not see
success over night (despite what some brokers might try to lure you into
believing…) So, on your first steps in this exciting but dangerous world,
services such as Vladimir's Forex Signals & Mentoring, can take you hand in
hand to learn the way real professionals trade. Plus, you have a chance to copy
the trades of a pro into your own account, so you start trading on the right
foot.
A signal service is also suitable for people who do not have the time to sit all day in front of the computer, looking for trades. Being subscribed to a signal service means there's a pro trader sitting and looking for trades on your behalf. Saves a lot of time and headaches, plus of course the results should be better, as you're having a highly experienced professional working for you.
For veteran traders: it's a real opportunity to hone your skills, and provide an additional source of profitable trades to diversify your "portfolio" of strategies. It is also an opportunity to join a community of like minded traders who communicate (through chat and live trading rooms) during the trading day, and help each other achieve better results.
A signal service is also suitable for people who do not have the time to sit all day in front of the computer, looking for trades. Being subscribed to a signal service means there's a pro trader sitting and looking for trades on your behalf. Saves a lot of time and headaches, plus of course the results should be better, as you're having a highly experienced professional working for you.
For veteran traders: it's a real opportunity to hone your skills, and provide an additional source of profitable trades to diversify your "portfolio" of strategies. It is also an opportunity to join a community of like minded traders who communicate (through chat and live trading rooms) during the trading day, and help each other achieve better results.
What are the
disadvantages and problems with signal services?
Here are the disadvantages
and common issues with signal services, which require your attention and
caution:
Hidden agendas: some brokers
provide free signals. You've got to ask yourself why would someone offer free
signals if they are serious and profitable. The answer in most cases is that
they have a hidden motive – to push you to trade more. The equation is simple:
the more signals they send you, the more trades you make, and the more
commissions they earn. That's why their main interested is sending as many
signals as possible, not as good and profitable signals as possible. These
kinds of freebie signals have made a bad name for the world of signals, but
luckily there are a few rare paid signals providers who do a good job.
Time constraints: many
signal services require you to be near a computer most of the day, so you can
immediately enter the market whenever you get a signal. However, this issue has
been overcome by using what's called a "Trade Copier", which is an
automated robot that receives its trading commands directly from the signals
service trader.
Good signals come from good
traders: Unfortunately, the Forex industry is full of scams and dishonest
vendors. Calling yourself a trader and providing signals is easy, but providing
signals which actually provide profits is of course a different story. The
statistics are that 95% of traders lose money in Forex. This applies to signal
providers as well. So, your mission is to find one of those 5% of signal
providers who actually make money in Forex.
Take Vladimir Ribakov for
example. He's been around the net for several years now, which means there's a
lot of feedback about him in forums and review websites. The feedback is
decidedly positive so he's the perfect example of a trustworthy trader to get
signals from.