These service providers are either teams of professional traders, or individual professional traders that research and analyze different investments and make recommendations to the investor based on their findings. They typically will perform both technical as well as fundamental analysis on the product as their basis for recommendation. The recommendations they send are called signals and are constantly refreshing and being updated.
After completing their research and analysis, the signal provider will send signals to the investor that acts as a message to act now to purchase or sell currency, stocks or commodities. The provider essentially acts as a guide to maximise profit allowing the investor to merely follow their direction, or signal, to get the highest return.
There are some things to consider when operating Forex using signals. The investor must be standing by or able to receive the signals. Foreign exchange is fluidly changing and, as such, there are very short windows within which to act upon the recommended signals. If the investor is unavailable or unable to act at the time that the signal is sent, they may be missing out on potential profits.
Also, investors may choose to communicate with a signal provider that is a live professional, or choose to communicate with an automated provider. Some may choose to have a combination of both. While there are advantages and disadvantages to both, the accuracy of the signal will dictate the market performance. So, this is an important factor to consider.
Investors are encouraged to research different providers before choosing one they think will work best for them. Signal providers are reviewed based on the performance of the signals that they send. It would be wise to research the history of each provider's performance based on the signals they've sent for the particular investment of interest. For example, if one planned on trading USD / EUR, they'd look specifically at the performance of past USD / EUR signals.
Investors might also want to consider the level of time and effort that you want to dedicate to Forex when choosing a signal provider. There are automated providers that take the amount that you intend on investing and make the best choice on your behalf with no further effort from you, all the way up to more advanced providers that give the freedom to manually make trading decisions based on the signal indicators .
One of the downfalls of trading signals is that they are not always accurate. The key is that they should be accurate most of the time. You want to be winning far more often than you are losing. Investors may consider having multiple signal providers to compare and contrast what other people are doing in the market. Doing this will reveal trends to show the majority of other investors doing the same thing, which is usually a good indicator of success.
In conclusion, Forex trading signals are recommendations that are sent to investors based on in-depth research and analysis that is done by professionals. They provide a constant, and time-sensitive feed on what and when to buy and sell. The multiple levels of service offered by providers allows investors to choose a provider based on their level of expertise as well as the intended time commitment.