About forex signals and forex trading strategy.As we all know, the forex industry for small and medium investors is filled with an almost infinite numbers of advisory companies or inividuals that offer forex signals services. Some of them offer some pretty good and decent return rates on your invested money, but the question is on what cost and risk management? Let me point our a few things that are widely encountered in these prcesses: risk management, money management, profit rate and service costs.
Risk Management.When you rely on someone to provide forex signals or managed account service you need to keep an eye on the risk factor that they use in their trading processs. If someone randomly places a lot of trades into a never ending hedge carrousel, they probably don`t have a good strategy and is more like a gamble, waiting for some trades to close on profit. And this is more dangerous when those trades are not opened with the right lot size.
Let`s take an example here: you have a $4000 forex account and the lot size in a trading session is 2 standard lots /pip which means you trade each pip with $20. If the market goes in the opposite direction for only 100 pips, you are already risking 50% of your equity and that is huge! A good risk for a $4000 account would be 0.2 standard lots, which means $2 /pip. With this risk you are safe if a bigger drawdown is happening while you keep making new profits because you have enough aditional margin to trade with.
Money Management.Someone who is using more than 10% of the whole equity into a trading session is probably not having a good money management strategy. Because you should always trade safe and also because market may turn back on you and you would find yourself in a big margin problem. With a good risk management, having 10% of your account invested, can bring consistent returns with no problems.
Profit Rate.Some traders can`t make 10% per year. Others can safely and consistently make 30% per month and they are not affraid to show their verified performance as a solid proof of what they offer. While taking into consideration a proper risk and money management, you should never aim to make millions in one week with a small account because that would probably mean hitting margin call. Just remember: a good strategy and analysis will always bring profits. And if at the end of the month you have only 1% profit, that means you don`t have -1% loses.
Service Costs.When consider paying for a service that brings you profits keep in mind a few things. Is it worth to pay anything for it? Does it have solid background and proofs? Does it have honest reviews? All those things are requiered as a proof of reliability. And if those are provided and you are convinced, do your math. Let`s say the service costs $100 per month. Your $500 account will likely not make even the service costs so it`s useless. If the service made at least 10% per month in the last year, you should know that $1000 accounts will make $100 profits and if the service cost is $100, you will not make any profit. Of course you can always leave the account to grow in order to make more and to pay from your own pocket for a few months and that, in my opinnion, is the best strategy for small accounts.
Conclusion.Some services are very reliable. And some of them, like Profit Forex Signal , are having all the right reasons to get subscribed for. But remember one thing: the market can be very hard sometimes and if you see a bigger drawddown from time to time, it doesn`t mean the service is not good. Because while handling that drawdown correctly, efficiently and safely, new profits are made with the same proper risk and money management. So it`s realy a long term analysis on that service. If it makes profits on long terms, if the risk and money management is great, then the service is reliable 100%!
With respect and consideration,Nino - CEO & Founder PFXS