Majority of Forex traders lose money. It is believed that roughly 9 of every 10 do. Hence, the Forex market is not as easy as it is wildly promoted. For many traders, unfortunately, this reality often does not dawn on them until they lose their money in it.
Signals, trade recommendations made by designated providers, however, have made Forex trading less frustrating. The powerful tool has continued to birth more successful traders every day.
Here is an introduction to them and to the pros and cons of their use.
What Forex Signals Are?
Forex signals are trade recommendations suggested by financial news websites, brokers, and specific designated companies. They are sent out to their users via SMS, email, pop-ups, tweets, and messages via social media accounts.
They can be either manual or automated. When they are developed by professional traders or market experts and analysts, they are known as manual signals. On the other hand, automated Forex signals are generated by software and robot, and are instantly executed on the trading platforms of their subscribers.
While the use of Forex signals is highly encouraged, it is important, however, that you are aware of both their pros and cons.
· Forex signals simplify the trading process
Forex signals help to simplify the trading process. Arguably, this is their most significant advantage that has endeared them to most traders. A Forex signal service subscriber does not have to analyse the market himself. Instead, the signal provider does that and feeds him with potentially profitable setups. His is just to trade!
Using a signal service, indeed, makes trading easy. It is time and energy saving. And you can use the time and energy you would have spent to decipher market direction on other activities that are important to you.
· They help to limit risk
If you are looking for a way to limit your risk in the Forex market, a signal service might be helpful. A standard signal would come with essential details such as the stop-loss and take profit price.
Hence, signals would tell you the price to enter a trade and the price at which you should pull out. What is more, is that signals also include stop-loss orders appropriate for each of the trades you take.
You see, perhaps, there is no tool that combine both risk and money management as good as signals do.
· They improve profitability
Forex traders adopt the use of signals principally because they help to improve their profitability. The ugly fact is that most Forex traders lose. Then situation is so pathetic that in many quarters, making money in the Forex market is believed to be a wild goose chase.
It does not have to be so. And signals, indeed, have proved that it really does not have to be so. Now, a quality signal service can give you a winning rate of up to 70%. That is, with a good signal service, you can win in the Forex market.
· They can help you grow your account
If you are a newbie Forex trader who really wants to grow his account, you should consider using a signal service. A standard signal service, with a modest winning rate, can do the magic for you.
When you get it, all you will have to do is to relax, and just place the trades it recommends. This works whether you just want to avoid beginner's risk or you are rather focused on building wealth in the Forex market over time.
Forex signals have their cons, too. Here are some of them.
· You can fall prey to scams
If care is not taken, you can fall prey to scam. There are many fraudulent Forex signal providers. These unscrupulous businesses seek to strip frustrated traders of their money, instead of giving them real value for their money.
Therefore, you should be careful. Do your research. Ascertain the profitability of the signals of the provider you want to use. Also, check its authenticity. Is it a scam or not? Find out by checking out for reviews by its users, current and old.
· Forex signals can be expensive to use
Using a Forex signal service, comes at a price. Although there are free ones, research has shown that free signals are usually substandard. Therefore, if you want quality, you will have to shell some cash.
It is a game of numbers. Can the signal provider make you far more than the amount you will pay for its signals? To answer this, research its track record. How many pips does it clinch per month? Of the trades it recommends per day, how many win?
If the signal service will not give you substantial returns, needless to say, it will not be worthy of use.
· They can make you dependent
Perhaps, here is the most disturbing reason why the use of Forex signals might not be advisable. Forex signals can easily make their subscribers dependent on them.
So, those users might not see any urgent need to learn to trade by themselves. Their dependence on using signals will get in the way of their becoming professional, expert traders in their own right.
You should work against this. Your ultimate goal should be to become a well-skilled Forex trader yourself. When you become one, you will be able to eliminate third-party influence from your trades. Only then will you be completely objective about your knowledge and skills and the trades you take based on them.
Nevertheless, as a newbie Forex trader, the odds are against you. To tilt them in your favour, you might want to consider using a signal service. 1000pip Builder is the one you need to protect yourself against beginner's loss and on your journey towards becoming a consistently profitable trader.
You should sign up for their membership here.