By: Tim Barnby
How much did your last FX trade cost you? If you’re like over 90% of Forex traders, it cost you more than just the broker’s spread. Be honest with yourself for a second. How much do you seriously lose every month in trading? It’s alright. Many people choose Forex instead of poker, horse racing, or the casinos. If you fall into the category of the person using Forex trading for entertainment, then read no further. This article will only be of interest to traders trying to make a profit from their efforts.
In my opinion, trading is the best business in the world. You need no employees, you can work whenever you wish, you can work from anywhere in the world and you can outsource your technical and fundamental analysis very affordably. That’s right, you can outsource your analysis. You don’t have to know the difference between a confluence of support and a bearish divergence to make a solid profit from your trading business. In fact, with some platforms, you don’t even have to see a chart. Forex signal providers are in the business of telling traders what to trade and when. Here is how it works:
- The trader agrees to a fee and subscribes to the signal service.
- Once a week, the signal service provider presents a weekly forecast. This forecast should offer some trading sort of high level trading plan. Simple things such as support and resistance levels, upcoming news events and directions of trade for specific currencies.
- When a high probability trade develops, the Forex trading signal provider sends a trade call to the trader via text message, email, or instant messenger. These can be as simple as:
- The trader decides whether or not to place the trade.
- The Forex signal provider provides trade management updates as needed.
All that a trader needs to know is how to enter and exit a trade on the trading platform. All of the research, chart reading, news feeds, level II quotes, and expensive charting feed fees are absorbed by the forex signal provider.
The fees for forex signals vary but you should expect to pay at least $200.00 per month. Anything less than that is suspect. A forex signals provider who charges less will likely cost you a lot more in lost trades.
You should look for a few simple things when evaluating a forex signal provider. You should avoid any site boasting thousands of pips per month in profits. This is “usually” just not true. Fake trading journals and activity reports are common. You should also avoid services advertising 90%+ winning trades. A service can have a 90% positive win rate and still lose money. It’s very easy to win 90% of your trades. Just use a wide stop loss and a small take profit target and you’ll win way more than you lose. You’ll lose money, but you’ll win more often. It’s not easy to be profitable. A professional trader will be profitable winning only 40% of his trades. If a website has the trades listed, look for signs of over-trading. If you see more than 3-4 trades per week, the service is over-trading. There just are not that many high probability trades to place in a week. Professionals avoid entering trades during the Asian and Australian markets and Friday afternoons. The thin liquidity during these times cause false entry signals and offer very risky setups.
Forex signals should be offered via email and text message to your wireless phone if you choose. Some services offer regular trading rooms, where subscribers can come and chat with a professional about the trades of that week. Any trade setup worth taking should have a long enough lead time to offer the trader some time to get to the platform and enter the order. The delay in email or text should not be a factor. If you find that your signal provider is consistently calling trades with under 20-30 minute lead time, look for a new provider! Forex moves fast, but high probability setups normally offer a decent window of time for entry.
You can spend your time sitting in front of your charts, or you can spend it doing interesting and exciting things. Outsource your research to a Forex signal service provider if you fall into the latter category. Remember that trading is a business. Invest in your infrastructure. Hire a professional service to improve your performance and bottom line.
If you want to make more money trading Forex while spending almost no time doing it, stop by The Market Mover Edge. We’re offering half price signal subscriptions for six months to a limited number of traders. 600 pips per month. 5 minutes per day. Done Deal!
