In the article, “Forex Signal Providers – Are they Really Worth Your Money?” Hatem Serag questioned the usefulness of signal providers. His overall answer was an overwhelming yes and he even recommends that “automated Forex signals are a good training to start with” for new traders.

I am inclined to agree for a variety of reasons. If you are receiving signals that are providing you a winning edge in the market, your focus can be applied on other important elements in your Forex trading.

Psychology is an important part of trading. Having a weak mindset can literally destroy your bankroll. Traders with weak minds tend to second-guess their decisions. They hesitate to get in when the market is good. When an opportunity arises to exit the market in profit they allow greed to penetrate their mindset and distort it. Fear is another attribute of a weak-minded trader and that can compel them to pull out too early or at a repetitive loss. All of these examples are leaks in a trading system and over an extended period of time it can equate to a humbling amount of losses.

When you have a signal provider that is giving you an edge in the market, your only concern is to place your trust in their success for you. There is no second-guessing. You simply have to enter when you are told to and exit when you are told too. Following instructions is the only thing your mind has to be on in terms of entering and exiting the trade.

Money Management will demand your focus. You can give 10 traders a winning strategy and only one, possibly two of them, will actually profit from the system. The other eighty percent were not adhering to proper money management. When you understand money management, you accept losses because you know that you will have enough wins that will compensate for those losses. Traders that have no regards to money management, chase losses and over leverage their positions. A trading system requires a solid money management strategy for it to retain profits.

Once you have your mindset where it needs to be and your money management in order, you can focus again on the trade itself. A wise signal provider will not share their strategy with you. If they did, they would not be in business, as you would have no reason to continue purchasing their services. However, this does mean you cannot learn from their signals. By continually watching their signals, you can question the reason as to how they came up with the signals. In essence you are learning to develop a skill in technical analysis.

Once that skill is fully developed, you can consider yourself a well-rounded trader. Not only will you be able to read the market, but also you will have the proper mindset and money management required to be a trading success.

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