Trading signals services
In general signals
services are not much different from managing and trading bots. The major
different in them is that you can decide – to take signal or not, with what
volume to trade and can monitor overall development of the trade. In fact, a
traditional signal service just gives you the kick – “Dude, Buy!” or “Dude,
Sell!” After this you are scratching your head and trying to come to any
conclusion. NOTE: Some signals services offer link to a “slave” EA that copies
the trades automatically to your account.
And what’s wrong with
it? At least I’m controlling situation and can accept or denied the signal. I’m
my own master. With third part management I do not see anything – trades,
decision context – nothing. With trading bots I also can’t do much, but here –
all the cards in my hands, I suppose.
I tell you, there
are still some scam traps here:
1. One of the possible conditions to get signals, could be
an opening account with some particular broker. For example – you will open
account with us and you will get trading signals for free. Taking into account
broker’s interest (at least fast and flat trading, if not to say worse), you can
imagine what kind of signals they could provide;
2. Some good traders could provide their own signal services
for free, but usually they do it, if you subscribe for some another services,
say trading online room or some others;
3. Take a note that when you take some signal – you
absolutely do not know what the foundation of it is, what’s the context and
reason for provide it, and how it has appeared at all. All choice that you have
is just to take it or not. How do you know, maybe some guy tossed a coin and
say – “Heads – buy, tails – sell” and have sent this signals to you. Other
words, if you trade – you do it blindly. That sounds not too fascinating,
right?
4. Also signal service could be based on some trading bots,
that even you have seen before and denied it. But now those swindlers run the
same bot in their office, get signals and send them to you. In fact, you’ve
bought the same bot, but do not know about it;
5. Human beings psychology is structured so, that it notices
unwelcome event stronger than good ones. For example, if you will not take
received signal today but the market will accomplished it – you will feel
regret about it. At the same time, if you will take 3 losing signal trades in
row after that – you will forget about it as soon as will see another missed
signal opportunity. This lets bad signal services exist and be demanded by lay
people;
6. Here we have to give you the same advice – take a look at
promotion way, remember Dennis The Menace 2. If they promise you gold mountains
with just $50 monthly subscribe for first 2 weeks (to test the service) – be
careful. If their signal service is so good, why do they share with it? Why
they do not just use their signals for themselves?
So, what I have to do
then?
I’ll give you
different ways to act with signal services, depending on what you want to get.
If you want just use signals
1. Meet with our Forex Signals Reviews. At least this will
let you to avoid many pure scams. You can also check the FPA's Performance
Tests of many signals companies;
2. If a signals service comes from a famous trader – he will
not give signals absolutely free. Probably you will have to pay for something
else – books, forum access, software and get signals just as some add-on.
3. Test signals for some time on demo. Better if you will
test them in different market environment – trending and ranging;
4. If signals are provided with foundation and explanation –
much better. In this case you can understand why they tell you to buy or sell,
and you can compare the signals with your own trading plan;
5. Using signals blindly is a dead-end track in trading – no
experience, no success, no profit.
If you want to study
1. That is what we strongly recommend to you.
2. If you follow some trading technique, say, Harmonic
patterns, De Mark, DiNapoli, or Elliott Waves – never mind. Find famous and
successful trader with this technique and subscribe for their signal service or
on-line trading room. This will let you to get access to historic researches,
pass through them and get priceless experience of your technique application to
real markets.
3. Use only those signal services that provide trade
foundations as well. So, that you can understand why they call you to buy or to
sell;
4. At the same time follow your own trading plan. Use third
party business only as add-on or additional check of your analysis.
5. FPA will give you different opportunities here. First,
this is daily signals by Huskins based on fundamental data trading with
explanations. Second, Shoulder of Giants part that provides you with full
foundation of particular assessment current situation on market – as weekly as
daily with video.
6. And last, but not least, by example of FPA, you may see
that it is better to deal with those who have not its own trading business, and
stands independent from trading process. Also FPA services are free. We are
proud are feedbacks of those who use our site content and Youtube.com
subscribers to our channel.
Scam Brokers
Yes they also do
still exist, but we will not speak much about them. Their major tricks are
bid/ask spread manipulation and clients’ stop grabbing. It is normal if you see
1-3 pips difference in quotes of different brokers, but if this spread is 6-8 pips
and very unstable, has a tendency to widen occasionally – that is not good at
all. Maybe this is not crucial for you, if you make 1-3 trades per day, but
imagine how it will be for scalpers. Besides, 5 pips more spread is just for 1
client and 1 trade, but what if they have hundreds of clients with hundreds of
trades per day. This is I can say good money…
Second, is about stop grabbing. The point is that Forex
brokers surely know where clients have placed their stops. That’s normal. Also
as if you trade via exchange you see all orders that have been placed. But
while on exchange there could not be any difference with trading quotes and
historical price among the traders, on forex it could. When price approaches to
clients orders, back-alley forex brokers manipulate with quotes so, that those
stops can be triggered. In reality there was no such price on the market. This
is very easy to do, especially if you recall how quotes are provided by DD
brokers.
I suspect something
like that…
Although regulators
are struggling with such back-alley brokers, and they are much fewer now, still
they exist. Here we can advise you following things:
1. In the US, choose a broker that has been registered as
FCM (Futures Commission Merchant) with the CFTC and NFA. The point is that
there are almost 2000-2500 forex brokers in US, or claiming to be in the US,
but only about 1% of them are registered as a member of NFA;
2. Do not trust any broker by word or advertisement – check
out its status (has it registered with NFA or not) by phone (800) 621-3570 or
on the NFA website;
3. Do not be upset if you’re not in US – many other
countries also have regulators as well I will list some of them in the next
lesson of this chapter;
4. Also the NFA is doing much to prevent frauds on the Forex
market. Once it has released some NFA basic course. We recommend you to read
it;
5. Also we do our own work. We suggest you to read Pharaoh's
education folder in the forums, especially his article on broker choosing
procedure and our reviews of brokers.
6. Do not deal with a broker that is not a member of
NFA/CFTC or other major regulator and do not put money with them. Do not tell
us later that you haven’t been warned.
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