Signing up for a free forex signal service sounds like a great idea. The alerts will tell you exactly when to trade and you can profit from forex trading very easily that way, without having to do any of your own research or technical analysis. At least, that is the idea. But does it really work in practice?

There are a few things to know if you are thinking of joining a free forex signal service. First, think about why the service is free. Ask yourself why anybody would give away money-making forex signals for free.

Some alerts are given away by companies or individuals who are hoping to you up for some other (paid) service later. Sometimes they will give you all of the information that you need to make successful trades (when to open, when to close, stop loss and profit targets).

This is fine and all you will have to do is accept that they will email you with other services from time to time.

Other times you may find that although they send an alert when conditions are good for trading, they do not tell you very clearly what is the basis of the system, so you are not sure what profit you are aiming to take or what your stop loss should be. This is not so good because you can end up just guessing those things.

You cannot work them out for yourself without knowing the whole system including the basis of the alert. So you could be better off doing the whole thing manually.

Even worse is a situation where the free forex signal is being sent by a hobbyist who has no intention of profiting from it. Sure that sounds great (nice of him, right?) but you probably do not know who he is or what success he has with trading.

Why should you trust his forex alerts instead of trusting your own ability to trade successfully?

In another situation, the company may send free alerts on a trial basis. For example you might receive free alerts for 2 weeks.

This is so that you can test out the service (which you should do in a demo account) and they are hoping that after that time you will want to continue to receive the signals even though you will have to start paying.

This is the ideal situation because the company has a strong interest in making you successful.

The signals they send out in their free forex signal service are probably exactly what their paying subscribers receive, and to keep their business they need to have their subscribers making money.

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