Forex Signal Providers - How to Use

Forex signal providers can be very important in the life of a forex trader as they can greatly improve on the percentage of winning trades because a decent signal provider has a set of mathematical algorithms which analyses the market, there by removing the human error factors which normally might be present. On the other hand subscribing to just any signal provider could lead to disaster because there are many peddlers of black box systems that never deliver.

Money management must be your watchword as a trader because most of the forex signals providers also give recommended stop loss levels that in theory might be fine but practically can not be associated with every account size. So when using such signals you must ensure that the stop loss level is suitable for your account size or you might see yourself wiped out in no time at all.

Leverage is another area where as a trader using the services of a forex signal provider you easily get carried away especially when you begin to get the initial good trades. Remembering that no signal is 100% guaranteed should help to keep you in check and ensure you do not over leverage your account due to greed, so always remember that the size of your account must determine how much leverage and lots you use.

Demo trading with signals received from a forex signal provider is a very important phase. You do not want to run the risk of testing the accuracy level of signals generated on your live account. Another way to do this while having a feel of the actual market is to trade first on a mini account where loss can be more easily controlled.

Keeping a log of all your trades is a very good practice as this helps you to go back and do a full assessment whether the forex signal provider is actually making you money or just loosing you money consistently. Some might argue that you know if you are making money or not from looking at the rate at which your account is growing, but I do not completely agree with this because if you keep a log of your trades you should be able to see if the problem is with a particular currency pair or all the pairs.

Some signals are stronger with particular currency pair, so if you have been keeping a log of your trades as discussed above you should be able to identify the strengths and weaknesses of a particular forex signal provider and just use it to your own benefit.