Currency Trading Signal Services

Currency Trading Signals

I cannot help but read time and time again that only a very small percentage of private of private currency traders manage to actually make a profit trading their hard earned cash. I have contacted a few people that I know have lost money over a fairly short space of time, and inquired as to their respective trading strategy. Most were kind enough to admit they had no strategy at all and really just resorted to guesswork as to the future direction of a currency. Others advised that they used various direction indicators, but unfortunately most of the indicators used lagged the market price and therefore were fairly useless.

I tried to explain that the indicators used were just that - an attempt to show the possible direction of the market price. Still not good enough. The best use I have seen using indicators is to wait for the end of a steady uptrend or downtrend of the market price, at which point you should stand a good chance of having a retracement of the market price in the reverse direction, at which point you could open a trade in that new direction.

Unfortunately, you also have the buyers and sellers of the currency to contend with. This means that in a downtrend where there is selling pressure overcoming buying pressure, any retracement back upwards could be short lived by virtue of (to make it simple) selling pressure having slackened and buying pressure kicked off the retracement upwards. Selling pressure resumes, overcomes the same buying pressure and the trend continues downward. The effect is called a pullback, and will allow the poor old private trader, who is still not sure what is happening, to have opened his upward trade only to realise yet another losing trade in a very short space of time. From which arises gloom and despondency and much wailing and gnashing of teeth.

So what can our poor private trader do to alleviate the distress over losing trade after trade ? He could give several thousands of pounds/dollars to a trading broker to manage an account on his behalf. The risk is that the broker could come back at any time asking for more money with an "unfortunately the market..." tale of woe and our private trader is still no better off. Very many years ago I remember futures brokers, mainly in the USA, regularly telephoning potential clients to manage their funds to trading futures. I cannot remember anyone actually making money on futures at that time.

What else can the private trader do? Well, one other direction would be to subscribe on a monthly

basis to a signal service provider, whereby you will usually receive on a daily basis directions as to what currencies to trade, either for day trading or for longer term trading. Such signal service providers mainly offer currency trading signals but they sometimes offer signals for shares or commodity trading. The main reason for offering currency trading signals is that you get more power for your elbow, so to speak, which means that for example a $1 trade effectively controls $100,000.

You could trade as high as 400:1 which means that for a very small market price move your profits are considerable.

The private trader must try and decide which style of trading he feels he would be most suited. There is long term trading, which is usually anything from weeks to months. A shorter term to trade would be day trading, whereby you receive emailed trading signals either the night before or more usually in the morning around the time the London exchange opens for dealing. These signals are for the duration of the day and expire late afternoon or early evening.

Finally there is the scalping type of trade, which again is a day type of trading but the trades are opened and closed usually in a matter of minutes, winning (or losing) a few pips of the market price movement. Quite often anything up to 400 trades are made each day, and you have to be quick for this type of trading as the currency market does not take any prisoners !

Most private traders opt for the steadier day trading, feeling that they could become a nervous wreck at scalp trading especially as they often trade at $10, or up to $50, a pip price movement to improve their profits as they close out a trade after just a few pips movement hopefully in the right direction! A point to remember is that the most expensive signal service providers are not necessarily the best by any means.

Whichever way you look at currency trading there is still an element of luck as no one person or corporation can control the currency markets. Control of the currency markets is in the hands of the buyers and sellers of the currencies. Put very simply if there are more buyers than sellers then the market price will rise, and will go down if there are more sellers than buyers.

One very inexpensive signal service provider I know puts out a very unique type of Hedge combination trade, and provided you are not greedy as to profits it is just about impossible to lose any money. Within reason you can open a trade, or a number of trades, at any time and then have a stress free period of a "set & forget" trade, just checking it out every 12 hours or so, leaving it to make money for you.

You can expect to make a return of anything between 5% to 15% on your money, although in good times it has been possible to achieve a return of up to 35%. I am aware that no person has ever lost any money with this type of Hedge trade. The only problem it seems is that you have to have patience, sometimes a lot of patience, waiting for the hedge to go into profit. It could take one day, or more likely several days, before a profit is realized.

Also given is a daily signal service of up to several pairs of currencies, and again I am aware that there has not been even one losing trade in the last 3 months. The downside is that quite a number of signals given do not materialize, so no trade is opened and consequently no loss encountered. Pip profits are anything from around 25 to 175 daily, and often hit around 700 pip profits per week.

Keywords: