- May 2014
- Posted By Ninoslav
- 0 Comments
There’s a lot of money out there to be made on the foreign exchange market, but it can be an incredibly challenging market to get into, especially for the novice investor. For this reason, many companies have popped up offering what are called ‘forex signals.’ These are alerts about opportunities for trades. These alerts include the currency pair, as well as an exact or approximate entry, exit, and stop loss data for optimal investment. Users subscribe to these services generally on a paid basis, and receive alerts as they happen.
The problem is, this kind of market prognostication is at its best an inexact science – and more often than not it more resembles guesswork, and even in some cases downright fraud. The methods through which forex signals are generated involve complex mathematical models that are often proprietary to the forex company that offers them. Because of this, they are unlikely to share the specifics of their model – not that most investors would ever be able to understand their complex methodologies anyway. Users of these services must rely on reviews and past reports of success, but even then, past success is far from a guarantee for an individual tip. Furthermore, because some investors use forex signals as an investing shortcut, a literal get rich quick strategy, it leaves the door open for less reputable companies with poor quality signals, and even scammers who use their signals to shift the market in certain directions, and then bet against it.
To protect yourself against these, issues, always read up carefully on any forex signal service you’re considering using. Many of these services offer free or discounted trial periods, during which you can test out the validity of their tips. Start with modest investments that you’re willing to lose, and only increase the trade volumes once you’re confident in the tips.
In addition to the quality of the tips, there are other factors to consider when looking for a trading signal service. Signals are only useful for a short period of time, meaning that the provider must have an efficient, speedy way of getting the signals to you, generally via text message, email, tweet, RSS feed, or using a specific forex signal program. Signals should include some measure of the provider’s confidence in its accuracy, and some backup data such as charts or analysis to justify it. The provider should also have a degree of support, including documentation and/or support staff you can speak to should you have an issue.