By: Christopher Lewis

When using a Forex signal provider, it is important to keep a few things in mind. The fact is that some signal providers are going to be better than others, and as such, diligence is extremely important. The fact is that nobody is going to care about your money more than you – including whatever signal provider you use.

If you live in the United States, one of the most important things that you can do to ensure you are using a reputable signal provider is to discover whether or not the signals are being sent by a CTA, or Commodity Trading Advisor. These individuals are registered with the CFTC in the US, that receive compensation for giving people advice on options, futures, and Forex, as well as actual trading of managed accounts. As such, they are highly trained and can be relied on as people who have completed various trading courses and examinations. While the amount of signal providers that have these people working for them are small – they are head and shoulders above the rest in terms of training and liability.

The second thing you should look for is actual performance. Many of the Forex signal providers out there are advertising results that are based upon hypothetical results. In other words, they are applying their systems to past markets, and can often be doing what is known as curve-fitting. This is when a system is applied in such a way that gives a better result than would occur in real time.

Watch out for performance claims as well. A fund claiming average gains of a few percent every month might not sound exciting, but it is certainly more believable than one claiming 10% ever month. Common sense should be applied. The scammers are counting on your greed to overtake your logic skills.

Another thing that you may want to pay attention to is where the service is actually located. You want the company to be from a country that has a strong rule of law, and as such can be held liable if something goes horribly wrong. Far too many Forex-related companies are located in countries that have a less-than-stellar reputation for business laws. As a simple test, ask yourself if you would drink the local water. If not, you have to think a country that pull it together well enough to have safe drinking water isn’t going to be concerned with a scammer that is selling bad Forex signals.

Even though most of this may seem like common sense, countless people get scammed every year by services claiming to be Forex signal providers who have never traded Forex in their lives. They are simply salesmen that have figured out a way to make a basic Forex system look exciting.  

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