Hi guys, hi from Andrea Unger! Today I will talk about trading signals, how to choose the service that works best for you and what are the pros and cons.
People often ask me questions about trading signals, such as what my opinion is and so on.
You know that my main activity is teaching traders how to develop their own trading systems, so that they can be totally comfortable with them. I think it’s better to teach someone how to fish, rather than giving him a fish to eat.
How to Choose the Best Trading Signals
If you really want to purchase trading signals instead of developing your own stuff, there are a number of things you should consider.
First, you need to trust the person who sells you the signals. You must make sure that he is a decent person, that you can trust anything he does, that he will not cheat in any way. This is very important.
However, being sure of this is not that easy, because you can never really know everyone personally, so you need to understand this relying upon the pieces of information you can gather.
The second point, which is also very important, is the kind of signals they offer you. How are the signals delivered?
For example, you may get a signal suddenly in the day and having to go immediately and enter, but how can you do that, if you work in a factory and can’t stop your activity to go and place the order?
This is something you couldn’t do, so you need to be very careful about what you are purchasing, because if you can’t use it the way it should be used, you won’t take any advantage of it, even in case it was a good service, because you can’t use it properly.
You clearly have to choose signals that cope with your daily activity. Check how you are getting them and what kind of signals they send you, and then evaluate if you can manage to merge the two things together. Try to purchase a service you can use 100% the right way.
Beware of Amazing Equity Lines
Another important thing to analyze is the service itself. What do they promise? If you see a perfect equity line, well… It would be very nice, if it were true. However, I have doubts when I see such equities.
You know it, when something is too good to be true, normally it is not true. So, you have to start being suspicious about that.
Also check out the average trade. This measure allows you to evaluate how robust the trades are when you apply them. If the average trade is too small, you know that even the smallest change in conditions might change the outcome completely.
Suppose you are trading the Eurobond and have an average trade of €12. The tick-value of the Eurobond is €10, so one tick would already cancel almost all the gain. Moreover, if commissions are not included, you will also have to calculate the trading costs of the broker and so on.
So, you have to be careful about what you purchase. If the average trade is not large enough, you can’t be sure that if a change occurs in the conditions you apply (compared to the ones they told you) your trades will still get something out of that money.
You don’t want to run the risk of wiping everything in the worst way, simply because you enter at different prices that don’t lead to any profits anymore. That is very, very important.
An Alternative to Developing Your Own Systems
My suggestion is that you learn to develop your own strategies. Only a strategy you devised yourself can really meet your needs and become a winning tool.
However, you may not be willing to do this, for instance because you don’t have time enough. This is possible; you may be so busy that you really don’t have the time to dedicate to strategy development. In fact, this is not something one can learn from morning to evening. You have to study hard, you have to trade, and so on and so forth, and this takes time.
If you don’t have the time, but you still want to take advantage of the skills of somebody else, you can consider purchasing his signals. But always make sure that what you are purchasing is fitting you: who, how and what it looks like. Everything is very important, so evaluate it carefully.
If you can study, do it yourself. If you can’t, then you can take advantage of somebody else’s work. It is like when you want to invest in a fund and decide to take advantage of the skills of those people who manage the fund—that is perfectly fine.
Check carefully what you are getting out there. If it fits you and if it has been at least true.
That’s it for now.
Ciao from Andrea Unger!
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