There are many Forex trading brokers, providing free as well as paid signal services. Each of them offers different trading strategies regarding the amount of capital, money management, signal entry and exit, indicators, currency pairs' choice to trade with, and other issues.
How to distinguish the best Forex signal service, giving the most reliable alerts? There are two things in Forex that rarely lie — trading statistics and time. Referring to the statistics, the ratio between the winning and loosing trades is very important — the greater the number of profitable trading signals compared to losses — the better. Even if you have more loosing signals, the total profitability is achieved by extending profits of the winning trades and cutting losses short. This way even one successful trade could outweigh two, three or even more loosing trades, bringing profits in the long run.
Referring to the time factor, I suggest checking the provider's proven trading results in 1 or 2 years time. Weekly and even monthly data will be of no use here if you want a solid proof of profitable trading record.
I suggest choosing Forex signal services offering long-term or daily trading strategies, because dealing with hourly or minute-based trading timeframes requires much more dedication, and those who opt for trading signal services, usually, do not have time for this kind of luxury.
Another reason, why I would rather choose longer term trading is because of many false short period indications and signals. Trading on a 4-hour or daily chart is different than trading on 15-minute chart. First of all, long term trading gives you the opportunity to avoid many false trade signals and even if a daily trade entry proves to be wrong, the number of losing trades will be significantly smaller than when trading on a small timeframe. The only thing you have to pay close attention to is the way how you handle your money management.
The last reason is psychological — it is better emotionally to have only one loosing trade in a day or a week and accept it, waiting for another opportunity, than to have five losses in one day and continue trading irrationally, desperately hoping to redeem your losses.
The strategy of a currency trading signal provider is also important. I would choose a simple and clear trading technique, based on a 4-hour or daily timeframe in a trending market as well as ranging. Stop-losses that exceed more than 5% per trade are a no-go for many FX traders. Besides, applied indicators are also of great importance. If your signal provider uses SMA (25, 50, 100, 200), MACD, resistance, support and price channels, chart patterns, etc., he can be trusted more than the one using super duper 500% profitable scalping "technique".
If you do not want to waste your money trying out which currency trading signal service works best, you may subscribe to several free services. They may not promise you mountains of gold, but you definitely will not get your account burned in a month's time.
Finally, use your own judgment. Read comments about your preferred broker or signal service in Forex forums and blogs. The best tool to avoid the scammy signal providers is reading reviews and comments. Finally, the right information can always be found by googling not just one but a few sources and reading reviews of the customers already using the services that you need information about.
However, the reality is such that most probably, you will not make profit with either free or paid signals. To be profitable in Forex, one has to learn and practice.