A lot of people have written to me recently, saying that they have signed up for a free forex signal service, traded on a live account, and then lost money. In some respects, I have little sympathy with these guys. After all, what do they expect for nothing? Just because you enter your email address and name in a contact form on a website, what right does this give you to make profitable forex trades based on information received in emails from an anonymous source, hiding behind a website?
One of the things I tell these people, is that if you want to test out their signals, great, but do so on a demo account, not on a live account. If you blindly follow the advice of website, even for free forex signals, on a live account, then you asking for trouble. You should always demo a strategy on a demo account for at least 3 months before going live, especially with free forex signals.
Secondly, don’t be afraid to contact the webmaster of the website in question, and ask about how they go about taking their trades. Are they trading based on technical analysis, or just a hunch about where they think the market is going. It is all very well handing out free forex signals, but anyone can toss a coin, and decide on that basis if the EUR/USD is going to go up, or maybe down, on any particular day. Ask to see their own trading account details – of course, they can black out the account details – but if these are true traders, they will have their own account, and will not be afraid to show you their accounts – indeed, most would be too happy to show you, if they had made huge profits on their account!!