What Is A FOREX Signal?
How would you like to be in the position, as a FOREX trader, of knowing exactly which direction a currency is going to move in before anybody else does? More likely than not, if someone could tell you that, you’d be willing to pay for such an information service! Actually, with FOREX signals that is exactly what does happen – you pay a subscription to a service provider to tell you where the FOREX market might be going.
What are you buying?
As mentioned, essentially you are paying a service provider to inform you ahead of the pack where a currency might be going. The information can be provided to you via SMS, email, telephone or fax, which you can then use to decide whether or not to act on to buy/sell a currency.
What if the information is wrong?
One of the biggest controversies surrounding foreign exchange signals provided to a trader is that you act on the information being provided to you at your own risk. Thus, even though in most cases you are paying a subscription to get the information, if the information later proves to be wrong, you have zero recourse action against the subscription-based service provider. For this reason, some foreign exchange traders chose not to subscribe to service providers offering this service. Having said that, if you are fairly new to foreign exchange trading, then having access to signals can be a very useful tool – as you can use this information to double-check whether your predictions are accurate or not.
What currencies are covered?
Another important aspect to remember about signal service providers is that they only offer this service for the so-called ‘hard’ currencies, i.e. Dollars, Yen, Pounds, Euro, and Swiss Franc. No exotic currencies are included in the service and so if your portfolio includes any exotic currencies, subscribing to a signal service provider will not be of any significant benefit to you.
Should I Subscribe?
Deciding whether or not to subscribe to a signal service is largely dependent on your experience in trading in foreign currency coupled with your FOREX portfolio. In the event that you do not wish to subscribe to a FOREX signal service provider, but would still like to use signals as part of your investment strategy, there are a number of service providers who are willing to offer this service free of charge via the Internet. Moreover, you may wish to check and see if your FOREX broker is willing to offer this service as part of your account – and if that is the case, this can certainly be a very useful addition to your foreign exchange investment strategy.