Are Forex Signal Provider Pip Results All That Are Important?

Using a Foreign Exchange signals service is a simple solution for people who don’t want to go through the long learning curve of learning to trade currency, or simply don’t have the time to sit in front of the computer looking for trades. And when looking for a Foreign Exchange signals service to subscribe to, the most important thing is proving the results of the service. Without a doubt, you want to subscribe to a successful signals service that can prove the results they claim really are the results they are getting.

Does More Pips Mean More Profits?

Most often, results are reported in terms of pips won or lost. For this reason, many people think more pips naturally means more profits. Unfortunately, just knowing the number of pips is not enough information to effectively rate the Forex signals provider.

The value of a pip is going to be determined by your account balance, the stop loss value and the risk management strategy used to calculate the lot size to trade. It is very possible a signals service reporting 200-300 pips a month can be much more profitable than a signals service showing 1000 pips a month. Make sure to study how stop loss size and risk management effect the bottom line before deciding using only average monthly pip numbers.

The value of a pip is determined by the lot size you use when you take a trade. The lot size differs for each trader because of different account sizes and risk appetites. This needs to be taken into account when determining the profitability of a Forex signals service.

Think about placing a trade with a 20 pip stop loss. The size lot you use should be very different than if you were placing a trade with a 200 pip stop loss. For example, if you were to use 0.1 lots, you would be risking around $20 on the first trade, but that would be about $200 at risk for a 200 pip stop loss trade.

The point I am trying to make is that pip values alone are not enough information to determine the profitability of a Foreign Exchange signals service. You should look deeper into the results of the service. Only then can you make a wise choice about which Forex signals service is right for you.

Set And Forget Forex Signals reports an average between 200 and 300 pips a month. While this might seem low to you, you can make nice profits with this service. Instead of just reporting pip numbers, they provide risk management case studies so you can see the gains or losses using different money management strategies. It might surprise you to see how much you can make with 200-300 pips a month.

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