How to use Forex Signals Properly (The Right Way)

To Trade or not to trade, that is the question…

It has been said by mentors of mine, that to trade successfully, you must be robotic. Simply calculate the Risk to Reward and take high probability trades. Simple right? Aren’t you a robot? Why not yet in this the year of 2020? Come on traders, get with the times! Trading is easy, so easy in fact it’s nearly impossible. So why not just follow a signal from a proven trader or robot and take the trades you can’t identify on your own? If a robot could do it, a monkey could do it too, right? Wrong. Trading is not simply a copy and paste job, but a labour of love. Otherwise, we’d have monkeys for that by now. Have you ever tried to have a beer with a monkey? It’s pointless. They suck at trading too. 

One of the most common misconceptions about Forex and Trading Signals is that they are firm rules to Obey. They are not. They are called signals for a reason, because they signal where something may be more likely to occur. They are to be thought of as ideas, and you are building a case for court. One clue alone does not solve a case, as there are always two sides to every story. You are looking to build conviction in your case, so you will need to rely on more than one piece of evidence if you are to be confident in your trade. Therefore, to conclude your case based on one whisper is mere hearsay in the court of Forex. You must have conviction, based on evidence and it better be yours or so help you God. If you copy and paste your evidence, you are a poor excuse for a Lawyer trader. You’re just a clown, clown. 

When using Forex signals, you should already have established your trading strategy and method of trading that you are looking to complement, via the aid of a trusted signal provider with whom your style can gel with. One of the keys to trading is you need to simplify your craft down to the basics, and operate with efficiency. You would be surprised at what even a slow connection or an overworked computer can do to your daily profits, and let me tell you it ain’t pretty. Therefore, when actually using your signal provider, you need to make sure you are using them in a way that isn’t cumbersome, but rather helpful to your already established methods of action.

For instance, if you like to trade divergences as I do, using an options service for options trades isn’t going to help me execute on my preferred set ups. However, by using a signals service provider that trades the same markets in line with how I do, and with whom I can also chat and discuss trade ideas with likeminded individuals – now that would actually be of use to me. If I can find a way to work the signal service into my overall strategy and routine, now that ladies and gentlemen of the court, is the glove that don’t fit.

You should approach choosing a Forex signal provider as you would choosing a trading partner. You have to know yourself, and your needs, and you should define them beforehand. This in turn will help you find exactly what you’re looking for. You should look for signals that fit your style, but that also work (i.e are profitable to begin with) most importantly. You want to make sure the Signals provider is legitimate and ideally third party vetted, and that they have back-tested strategies that they are running their signals off of. If not, you are doomed from the start. If you follow your friend to a MLM event that he told you was an awesome party, well then all you did was you got conned into attending an MLM event you know what I mean? You can buy all the fruit juice you want, you’ll still never be the Kool Aid Man.

So ask yourself whether you can trust your signal provider? Are the the real deal? Are they willing to show you track records and statements? Are their signals transparent or proprietary? Is it fishy sounding or are they clear and concise on their guidelines and boundaries and results and history? You should feel comfortable with your chosen signal provider, and make sure they aren’t trying to fleece you softly. You should do your due diligence always and be comfortable ultimately.

In terms of using the signal service itself, some words of caution. No two trading days are the same, therefore check the conditions of the market before blindly placing any trade. Oftentimes, volatile markets may trigger an algorithm based signal for instance, but the market conditions are too fast and too dangerous to place a trade safely. You must know what type of market you are in at all times, no matter what instrument you are trading. If the signal is for a market you aren’t familiar with, well you should probably study this trade signal and set up instead of taking it. Take things at your own pace, and don’t rush to go broke. Operate with caution at all times. If you see a signal, see how it aligns with your overall strategy, and if you like it great, and if not, who cares, throw it aside like yesterday’s newspaper. You should never feel pressured to take any trade, let alone trade for the sake of trading. You should always be focused on capital preservation, so when you see a trade signal pop up, think of it like a sales coupon and ask yourself whether you even need the item. Perhaps you don’t need to go all in Maxxx -Leverage on an exotic pair you’ve never traded before.

Lastly, it’s not just about signals in Forex. Remember your own context, as well as the markets. You need to know when to recognize your own signals in life, for instance, when it’s time to walk away from the charts. Remember sleep? Sleep is important. Sleep is nice. The best players know when to walk away from the markets and call it a night, win or lose.

“You gotta to know when to HOLD EM, you gotta know when to FOLD EM, you gotta know when to walk away you gotta know when to RUNNNNNNNN…..”

Trade safe everyone, and remember, you never copy and paste someone else’s trade idea and expect to get paid for it. You are responsible for everything in this life, and the sooner you realize that, the better. Now get going and get giving to make a living you kitten sniffers. Happy trading!

Who is Op-Ed & Forex Lens

Op-Ed is an avid trader and learner of all things life, with an inspired sense of duty to help others achieve their goals and dreams. Ed has 7 years of financial and trading experience, having both worked on the broker side, as well as prop trading and in trade support. He has also worked as a professional corporate currency trader and focuses mainly on Gold, the S&P and Forex. Ed is also interested in beginning to mentor students more formally, as he has informally over the years. He is always available to talk shop.

Call me or send me a chat now if you want to learn more about how to get started in trading or get started with the Forex Trading Room!