Forex Signal Providers – What To Consider
The popularity and easy accessibility of the Forex, or foreign exchange market, makes many people choose it as their financial stepping stone. Together with its indisputable popularity come some extras. The extras include computer programs, trading systems, videos, books and most of all, third party signal providers. Now, I will discuss some points when searching for a good third party signal provider.
For you to choose a quality third party signal provider, we should have a good understanding about who they are and what they do. Signal providers are other traders or analysts that are able to place trades in your own account with the hope of turning a profit. Depending on your trading needs, you can have one or many signal providers.
You have to be careful when choosing your forex signal providers. At a glance a trader may look like he or she has a really good track record. If you take a better look, though, you may find that the trader isn’t quite as good as you thought. To help to make sure that you always choose quality providers to trade your forex account we have to set some ground rules.
1. Is your signal provider a winner? It would seem that no one would trade the signals of a losing trader, but still I see losers with a big following from time to time.
2. The next thing I look at is how long they have been a winner. If a trader has been winning for a week, this means nothing to me. I recommend that you don’t trade any signal provider with less than a few months of results to show you. Any one can place a few good trades one week and get lucky. If you are going to be trading this trader’s signals they need to be established.
3. Look at the max draw down. This is the largest peak to trough draw down in equity that the trader has historically had. Some traders refuse to take a loss. This causes them to hold on to losing trades forever or until they turn to a winner. Turning a loser into a winner sounds great, but it will eat up a huge chunk of margin and may never turn around. If it doesn’t turn in your direction, you will have your entire account destroyed by a trader that could have taken a 30 pip loss but held on until it was an 800 pip loss.
4. The first few are fairly easy to keep an eye out for. They should all be displayed on the main screen and you may even be able to sort by each of them. Once you find several signal providers that you are considering, you should think about looking a little closer.
a. Have a look at some of the trades placed by each trader. Are they all unique trades or are there 20 trades all placed on the same currency pair at the same time? If so its really just one trade placed twenty times.
b. Look at the draw down on each trade. If your signal provider lets trades get several hundred pips away from them and then cuts them short the second they head back into the black you are in trouble. This is a trader who lets losses run and cuts profits short. You do not want to trade a signal provider of this variety.
c. Do they add to losing positions? A trader who constantly adds to losing positions hoping it will turn for them is not someone you want trading your account.
5. Choose a signal provider that suits you. Some traders may provide larger returns over time, but take bigger risks leading to bigger draw downs. This might be OK with you. If you are more conservative and cannot stomach large drops in equity you probably should choose a more conservative trader.
This is only a simple guide for you to consider when looking for good third party signal provider. Remember to always trade a demo before a live account and that ultimately the money is yours and no matter what happens to it, you are the one who’s responsible for it.
To learn more about Managed Forex Accounts visit Automated Forex Trading Systems.
#1 - Best Forex Robot - FAP Turbo
The FAP Turbo was choosen to be our number one pick for a very obvious reason. When it comes to profiting in the forex market, the FAP Turbo is king.
The website for this product claims that it will double your money every thirty days. Although we didn't see results quite this good, and we don't expect to, we're still certain that you will be very happy with the results you will get with this robot.
#2 - Best Forex Robot - Megadroid Robot
The Megadroid Robot has every right to earn its number two spot in our picks. We were very pleased with the results that we received from trading with this program.
The program has what is called a Reverse Correlated Time and Price Analysis (RCTPA), which allows the software to predict what's going to happen in the immediate future based on data from the past. Although this product does not profit as well as the FAP Turbo, it still does an amazing job of profiting in the forex market.
#3 - Best Forex Robot - Ivybot
We had very high hopes for the Ivybot when we first started testing it. These hopes were not fully met, because we thought it was going to be the next FAP Turbo, but we weren't dissapointed either.
The bottom line is that the Ivybot does an incredible job of profiting from the four different major currency pairs that it trades. That's really all there is to it.
Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically to your feed reader.
Comments
No comments yet.
Leave a comment