Forex trading by which international currencies are traded has become popular over the past few years as the business has become deregulated, allowing traders with all sizes of bank accounts to get in the fray. Advertisements for foreign exchange trading systems, brokers, signals, as well as robots seem to be ubiquitous. So how does one use forex signals to earn money?

Find a forex signal service with a solid background. There are thousands of services out there today. A number of them work; most of them don’t. A website called ForexPeaceArmy.com (look for a link in the References section below) has ratings for many brokers, signal services and softwares. They’re all reviewed by users and the site is free to join. This is the first place you should look to find a dependable service. Go to the site and then click “Reviews” and “Signals.” Choose a service that has a minimum of 60 votes and has four stars or maybe more.

Evaluate the track record. Some services claim returns of thousands of pips a month, but when you look closer at their records they only give you entry prices and use the highest that the trade went at to be a basis for their track record, whether they actually told you to exit at the high. For example if the signal was to enter at 1000, and the position went all the way to 1500 and then reversed, they would claim that you could have made 500 pips on their record. While this is true, unless they told you to get out at the top there was no way to know that it was the top. So when you review track records be sure they include an entry price and an exit price.

Choose the way your signals are delivered. Forex is a 24-hour-a-day, six-days-a-week market and orders can come anytime. You should be able to have an option to choose whether you want your signals delivered by e-mail, by SMS, or both. As a rule of thumb you need to choose both so that you don’t miss any trades.

When you get a signal make sure to enter the limit price the order will execute at, the stop-loss, and the target that you’ll take your profits at. All signal providers must provide these three recommendations.

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