A good reliable service,or company, that provides forex calls (currency trading signals) can be very tough to find. Once you start to look around you will quickly notice that there are a TON of “fly-by-nights” that are more than willing to take your hard earned cash, and deliver very little in return. My advice to you is to carry on doing exactly what you are doing right this minute – ie. do you homework, and research, research, research !!
When evaluating a forex calls service there should be a number of factors that you take into consideration.
1) Success Rate
Above all else, this is THE critical factor. A currency signals service that provides rubbish signals, and is a long term loser, is not worth anything.
Try to find out as much as you can about the companies past performance (over as long a period as possible). Bear in mind that the less ethical of these companies have very little problems putting up trading results that can appear to be quite misleading, and in some cases just downright bogus.
Remember, forex currency trading is driven by 2 emotions – fear and greed. Do not let yourself be overcome by the greed at this point :-)
Always keep your wits about you, and remain cautious. If a set of results looks too good to be true, then it probably is.
2) Stops and Drawdown
This should be your second most important factor when evaluating a forex calls service. Make sure that the system that they use is within the risk management parameters for your own trading account.
A trading system that requires you to use stops that are too large for your available trading account is going to be too risky for you. It will not take too many losing trades before your trading account has been wiped out. All systems have losing trades – its the nature of this particular beast. Even if a particular currency signals service results shows that they have won their last 10 trades, there is absolutely nothing to say that they will not lose the next 10.
3) Target/Stop Ratio
Be careful of a forex signals service that makes you use stops that are larger than your targets.
For example – a trading system that targets 25 pip profits, yet prescribes a stop of 50 pips on each trade will need to have winning trades 2/3 of the time (not taking spreads into account) in order to just break even. If their system does indeed have a 70%+ rate of successful trades then you will make a profit over the long term, but it may be wiser to look for a different system.
4) Type of Signals
You will notice that there are 2 main types of “forex calls”.
One system is where the currency signal service will provide you with a fixed entry level and a fixed stop level, and then will make recommendations only as to a suggested level/levels for taking your profit.
The second system is where they will give you a fixed entry level, a fixed stop level, as well as a fixed target level.
If you are a part-time trader (ie. you have a full time job during the day, for example) then you may find that the second type of system suits you better. If you are in a position to “manage” the trade while it is open, then the first system will definitely suit you better.
5) Method and Frequency of Signals
This is another pretty important factor to consider. If the particular forex calls service you are using is trading on short term charts, then they are likely to be getting quite a few trades. These trades could set up quite quickly, and therefore you need to be getting that information timeously in order to take the required action (ie. place the trade). If they are trading on longer term then this is not as important.
Some signals companies offer email and well as SMS for receiving your information. Be sure to choose the best options for your trading style. Also, make sure to check if there is additional costs involved if you pick the SMS option, as some companies charge extra for this.
6) The Cost
There is good reason why I have made this the last factor. That is because it should be the thing that you think about last.
Use all of the other factors first to pick the option best suited for your own personal requirements, and then lastly consider the cost.
Have no doubt, the best and most successful companies know what their information is worth and they do not come cheap. This can be a big problem for you guys who are trading with very small accounts, or trading mini-accounts, where your total monthly income is not enough to cover the cost of the service. Unfortunately very few of the good services price themselves for the small traders :-(
Do not spend $50/month on a rubbish service simply because its all you can afford to spend. You would be better off setting the money on fire – not to mention the damage that may also happen to your trading account from the rubbish information. Rather save your money until you can afford the service that you really do want.
Have a look and see if the company offers a free trial, or at the very least a much discounted evaluation period. Most of the reputable companies will.
Now obviously there are other factors that you should be looking at – for example, how long has the company been running. It is only the successful ones that stand the test of time. But what I have mentioned here are what I would consider to be the most important.
I encourage you to browse around our site at the various options that we list, and I hope my tips here will help you pick a good forex calls service.