Are accurate Forex signals just a myth or dream?
Are you chasing rainbows?
The first and most important question when it comes to accurate Forex signals is: How do you define accurate? If you define accurate as 90% winning trades week in, week out, then you’re chasing rainbows.
“Accurate,” is more complicated to pin down when it comes to currency trading and signals than yes or no. Finding a good Forex Signal provider is more like getting into a relationship than simply choosing a service; a union that requires trader and signal provider to work in harmony.
While the signal provider is going to work to provide accurate and reliable signals, it will be up to the trader to execute the trades. Realistically, overall accuracy will have as much to do with the individual trader as it will have to do with the accuracy of the direction. (Buy or Sell) Let me explain:
Forex Signals
A trade signal is sent to BUY the EUR/USD, with a stop limit 35 pips below entry price, and exit level 45 pips above entry price. But you’re not greedy; you just want to bank 10 pips.
You go ahead and set your stop as instructed to let the market “breath.” The order fills; after 20 minutes the market moves and you bank 10 pips, the trade continues on for total 68 pip move. (The signal was right!)
Having good results and seeing accurate signal direction, you take similar trades two more times with the same result; so far you have banked 30 pips. ($300) You think to yourself “That’s the wife’s minimum credit card payment and it’s only Wednesday.”
Feeling confident in your signal provider’s ability to read the market you take the next trade with 3 lots, identical entry, stop, and exit levels, but this time the direction is wrong, the order stops out; you lose 35 pips in 3 lots (-$1050) leaving you down -$750 for the week. Did you receive accurate Forex Signals? Yes. (3 winners, 1 loser. 100 pip gain in 4 trades according to provider.) Did you have good results? No!
Granted, the above example is a rookie mistake. (Poor risk management.) But consider other areas where you as a trader can be taking defeat from the jaws of victory. Do you only trade one or two currency pairs and ignore signals on other pairs? What if you take a losing trade on a particular pair and get an alert shortly thereafter for the same pair; will you take it? What about a week of break-even or negative results; will you continue to follow alerts the following week?
The point is that “accurate” is relative when you’re talking about accurate Forex signals. The accuracy must be looked at over reasonable yet sufficient period of time. You must find a signal service that suits your trading strategy or you must trade the strategy of your signal provider to achieve comparable results to those claimed. And avoid situations like the above example.
Think of it like this: Accurate Forex signals is like a good fitness trainer. No matter how perfect the trainer’s program may be, if you follow the workout regiment but don’t follow the diet plan you’re not going to reach six-pack, Greek-god physic. On the flip side, even a less than perfect program will achieve results if both trainer and athlete are consistent and committed week in, week out, to a good diet and workout program.
You can defiantly find accurate Forex signals, they do exist. Yet, just as there is no pot of gold at the end of the rainbow or magic pill to get in shape; there is no get rich quick, risk free, effortless method to trading currency. Even with the most accurate signals in the world, you will take losing trades; you will have a tough week or month. It is commitment and consistent adherence to good trading strategy and reliable accurate signals together that turn dreams into reality, goals into achievements.
