Forex Trading Signals and Hedge Fundsby Kathy Lien
Even the largest hedge funds in the world are still looking for the switch that can identify whether you are in a trend or a range-bound market. Most large hedge funds tend to be trend following in the forex market, which is why hedge funds as a group did so poorly in 2004, when the market was trapped in a tight trading range. Range-bound systems will only perform well in range-bound markets, while trend systems will make money in trending markets and lose money in range-bound markets. So when you buy into a system or a signal provider, you should try to find out whether the signals are mostly range-bound signals or trend signals. This way you can know when to take the signals and when to avoid them.
Source: http://www.investopedia.com/articles/forex/06/FirstStepsFX.asp; http://www.bktraderfx.com/site/members-benefits; http://www.gftforex.com/