Things To Look For When Choosing A Forex Signal Provider
Red flags hover about that you should be able to spot rather easily that can assist you in protecting your forex account. Traders normally come equipped with third party signal providers, some only stay that way for a couple of months, or even worse, weeks. The truth then comes to the forefront that they are really ticking time bombs ready to go off at the least opportune moment.
This article is meant to assist you in uncovering and bringing to the front a few items you need to be aware of and avoid. Do not consider it to be an all-encompassing document of alerts. Look for:
Trading With No Stops
Even the best trader cannot control all facets of a trade, so the ones without stops must not be on your active list. Power outages and connection disconnects are always possible, no matter how smooth everything else looks. Since you are dealing with immediacy here, news can take the market on a swift and lengthy journey. The last trader you want working with you is the one without stops. This is the first trader to avoid.
Win Sizes Out of Proportion to Losses
Some traders get excited and pull profits off of the table far too early. Generally this is a good idea for a losing trade. You want to cut your losses short and let your winners run. This should cause your winners to be bigger than your losers. Any trader who regularly takes 10 pips of profits and has 200 pip losers on his books is no one that you want trading your account.
New Trading Accounts
These are not actually red flag traders but you should still avoid them. Any trader with only a few weeks worth of records should not be traded on a live account. You can absolutely run them on a demo for a month and take a look at the results, but if the trader is worth trading, they will still be there in 6 months. And by then you'll have a much better idea of who you're dealing with.
Large Gains Following a Draw Down
Abnormally big winners are the sign of a trader who has seen the end of an enormous draw down and is betting it all on one last ditch effort. The account indeed recovers and to the new onlooker's eye, the guy looks like a true winning trader. The reality is for every 10 tries, the trader is lucky if even 2 make it to survival and recovery. These are the 2 that are wafting about in cyberspace searching for you. At their next draw down, they will almost certainly go for the "hail Mary" pass and the end could be ugly. Better not to pray your way into a winning situation, stick to more scientific methods.
There are obviously many more tell tale signs that a trader should be avoided and this article is only intended to get you started. - 23222
This article is meant to assist you in uncovering and bringing to the front a few items you need to be aware of and avoid. Do not consider it to be an all-encompassing document of alerts. Look for:
Trading With No Stops
Even the best trader cannot control all facets of a trade, so the ones without stops must not be on your active list. Power outages and connection disconnects are always possible, no matter how smooth everything else looks. Since you are dealing with immediacy here, news can take the market on a swift and lengthy journey. The last trader you want working with you is the one without stops. This is the first trader to avoid.
Win Sizes Out of Proportion to Losses
Some traders get excited and pull profits off of the table far too early. Generally this is a good idea for a losing trade. You want to cut your losses short and let your winners run. This should cause your winners to be bigger than your losers. Any trader who regularly takes 10 pips of profits and has 200 pip losers on his books is no one that you want trading your account.
New Trading Accounts
These are not actually red flag traders but you should still avoid them. Any trader with only a few weeks worth of records should not be traded on a live account. You can absolutely run them on a demo for a month and take a look at the results, but if the trader is worth trading, they will still be there in 6 months. And by then you'll have a much better idea of who you're dealing with.
Large Gains Following a Draw Down
Abnormally big winners are the sign of a trader who has seen the end of an enormous draw down and is betting it all on one last ditch effort. The account indeed recovers and to the new onlooker's eye, the guy looks like a true winning trader. The reality is for every 10 tries, the trader is lucky if even 2 make it to survival and recovery. These are the 2 that are wafting about in cyberspace searching for you. At their next draw down, they will almost certainly go for the "hail Mary" pass and the end could be ugly. Better not to pray your way into a winning situation, stick to more scientific methods.
There are obviously many more tell tale signs that a trader should be avoided and this article is only intended to get you started. - 23222
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posted by X - Men @ 5:54 AM
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