Forex signals and social trading
The premise of forex signals, or their raison d'être, is to provide traders with complete trading instructions – including entry timings and exit targets – in order to alleviate them from the burden of conducting their own market analysis. It’s not a bad deal, depending on the subscription fee, but while most signals providers pledge phenomenal results, they are probably exaggerating at best, or outright trying to scam you at worst.
Therefore, if you are enticed to subscribe to a paid forex signals service, you should ask yourself if you there is any actual merit in doing so. If the provider has a good performance record, you should be allowed to verify his results via a third-party provider, or you should at least request a free testing period in order to evaluate the veracity of their claims. You can’t expect to win every trade by following a signals service, no matter their guarantees, but overall, they should be somewhat profitable at the end of the month.
Then you need to also consider, what you are getting out of it in the long term. Those that have managed to master the markets and found a viable strategy with consistent results, are the ones that have invested the time to learn how everything works. While trading signals can offer some learning opportunities and insights from more experienced traders, if you are serious about learning how to trade, you should probably try and develop your own strategy. Thankfully, this can be done at no cost, if you test your theories on a demo account first.
However, if you are after a passive investment approach and not really interested in learning how everything works, no one will blame you, because after all, trading forex is not exactly a simple task and it can take a substantial amount of time before everything clicks. In this case, trading signals can take market analysis out of the equation – which is quite complicated – and you can just follow the potential opportunities provided and call it a day.
Why use forex signals and social trading
Obviously, the most important reason most traders prefer trading signals is because of the efficiency and simplicity of the whole process. Instead of spending hours researching, crunching numbers and waiting for reversals – you just follow the instructions you receive from your provider and that’s it. As long as your provider’s records are positive and his risk profile aligns with your risk appetite, you should be good to go.
Then there’s also social trading which is quite similar to signals – the only difference being that with a social trading platform, you have the choice of allocating a specific amount to the provider of the signal or just copy his trades into your own account as you see fit.
Social trading has been taking off recently as more beginner traders find success in following the more experienced traders and having a big community to reach out to when in doubt.
In fact, some surveys have shown that traders utilizing social trading platforms have the highest win rates in the industry. Therefore, while your experience may vary from service to service, there is definitely evidence of copy trading systems not being a waste of time for serious investors.
Free forex signals
Most competent forex traders aren’t going to be offering their signals for free, however, there are several free forex signals available through third-party providers. In fact, it’s quite likely that your broker already offers some form of free forex signals to all live account holders so make sure that you check on their website or contact customer support if you are interested in checking them out.
Free forex signals can also be found in the MT4 trading platform. The platform allows everyone to subscribe to free and paid signals and everyone has the option to become a signal provider as well. Of course, subscribing to signals that are largely unregulated might not sound as sensible, but MT4 is actually quite transparent with the trading performance of all the featured trading signals. Thus, finding a provider that aligns with your objectives is an easy and straightforward proposition.
In fact, aside from all the useful statistics regarding trading history available, MT4 signals can be sorted by growth percentage, profitability, number of wins and even maximum drawdown. Another major selling point for the signals found in the MT4 trading platform is that all trades by the signals provider can be automatically executed in your trading account. This means that you don’t even need to wait to receive the signals from a third party and then try to execute the position before the opportunity passes and you can also copy the providers stop loss and take profit levels as well.
There are several third-party websites and forex communities that provide free forex signals, but it should be obvious that if you are looking for high quality service, you need to look at more premium providers and these are typically subscription based.