Trusted Forex Signals are not what meets the bare minimum.
Trusted Forex Signals are more than just signals that are not scams like one would find on Twitter, Facebook and Instagram. No, to be a trusted signal, it must be a signal that is honest and transparent in its operation. It cannot merely be not a scam nor even have verified results on its own, but rather there are more criteria that evoke trustworthiness to a potential subscriber.
Criteria #1: Verified Results by a Neutral Third Party
In order to be considered trusted, a Forex Signal must have verified results by a neutral third party. The neutral third party provides all of the metrics and data for the particular Forex Signal. Examples of neutral third parties are MetaQuotes and MyFXBook. Every trade is available to the public to be scrutinized and the risk/reward factors are all published. There are no backtested results here, just real life un-photoshoppable figures. The good, bad, ugly and even incomplete are there for all to see.
Criteria #2: Trusted Forex Signals are Consistent
It must be obvious there is some sort of a consistent element to the trading strategy. A signal cannot go from swing trading XAU/USD to scalping EUR/USD, it just does not make sense. If there are inconsistent lot volumes per trade or if the trading frequency is inconsistent, this is a problem. A Trusted Forex Signal is what it says it is and the moment it deviates in an overt or covert fashion, it cannot be trusted anymore. Reviewing the track record and auditing the trades made while subscribed is important (one of Freevestor’s services for clients).
Criteria #3: Automated Signals are Best
Humans are imperfect and often make trades based on what their eyes see and even where their emotions take them. A consistent signal could be from the coldest human being on the planet, but the trades are still made by a person interpreting the situation rather than software program following through on ensuring that the rules of a system are met for the purposes of entry and exit. There is no wiggle room with a software program, it is matter of meeting the specifications or not. Humans can be more generous in their approach whether it be toward the side of aggression or conservatism.
Criteria #4: Automated Signals are Transparent
This fits in line with consistency, but the transparency is about the expectations that the Signal Provider sets for the current and prospective subscriber. What is the minimum amount someone must have in their account? What is the Signal Provider actually trading. Nobody wants to be overexposed to a particular position with a particular currency pair, but without transparency it is impossible to prevent such a situation from occurring. Of course, that would not be good.
Criteria #5: Trusted Forex Signals need to avoid technical issues
If a Trading Signal is operated by a person or company with poor internet, trading opportunities are missed and if there are any sort of contingencies based on situations with the automated trading system, it could result in larger losses than anticipated or delayed take profit opportunities.
Criteria #6: Sample size
It’s one thing to overtrade, but some signals charge subscribers and do not place enough trades to evaluate properly. Is the signal provider overfitting or taking advantage of rare anomalies? Is it worth $20 to $300 for a signal that may place three or four scalp trades per month?
Maybe the signal is brand new, which means that there may not be enough results to make a qualified decision. Get a more substantial sample size and then make a determination.
Consider your own personal risk/reward and the associated fees.