Develop Your Own Signals

we don’t want to imply that all forex signal services are bad. That’s not true and there definitely some reputable products available. These systems are ideal for active investors that want a helping hand in their trading or for investors that don’t have the time to be at their trading computer for an entire market session.

The premise behind most of the good signal services is easy to understand. They simply give you a trading idea, sent via email or accessed through a members-only Web site, and it’s up to you as the trader to decide to take it or not. Of course, we want to know why a system is generating a particular trade and that information is easily obtained by reading your system’s user manual.

For example, if your signals service recommends just one or two trades a day, it probably uses longer-term charts such as 30 or 60-minute charts to find trades. You know this going in, so you won’t be surprised to get a small amount of trades per trading day.

On the other hand, you can take the reins yourself and use a combination of chart patterns, indicators and oscillators to develop your own signals. This would be a good example of “rules-based” trading, which is what you should be doing anyway and we’ll take a more detailed look at it below.