If you are interested in trading the stock market, forex market, crypto market or even the commodity market you probably found trading signal providers. If you take a deeper look at it you will find out why trading signals never work and will only cost you money.
First of all if you did some research in trading help, trading tools or trading bots you will see that the market is full of scams. The one we are going to talk about in this article is trading signals. Most of the trading signals providers only want to sign you up, get your information and want to sell you a subscription. But first let’s break it down to different points here
The way signals work: You sign up to a signal provider. The provider is a professional trader who analysis the markets for you. This trader spots trading opportunities and will send these opportunities as a ‘signal’ to the subscribers. The signals can be send via email, whatsapp or a popular way is telegram. You will receive an entry, take profit and stop loss point. Sounds good, someone who does the work for you. But it isn’t that simple.
Before someone completes his analysis, made a text and send it to the group there can be some moves or events that changed the market. Besides, before you read the text and opened a trade there we be at least some minutes past. Therefore you are in most cases always to late to enter at a good point.
When you use Google, Facebook, Twitter or even Instagram to look for a signal provider you will be overwhelmed with traders who are successful. They show off with ‘Financial freedom’, Ferrari’s, expensive clothes, golden watches etc.. I think you get the point. They try to convince you with all these material stuff and let you think they are really successful. And of course because of the greed and trust we have as humans we fall for these things.
But think about it: if these guys are really that successful in trading, why should they sell subscriptions for trading signals? Why should they put all the time and energy in this business model if they can also open a trade themselves and make the same amount? Most of them aren’t that successful in trading but only make a lot of money because of the subscription fees. Do the math yourself! The average fee for receiving trading signals is between $50 and $200, but let’s take $50 a month. If you only have 100 subscribers you will receive $5.000 in your paypal account each month. And believe me, they don’t have only 100 subscribers. So the money they make is a lot on only subscription fees.
To take a deeper look at the different groups, how come they offer a ‘starter’ group and a ‘VIP’ group? Most of the signal providers offer different types of groups. Depending on the subscription you choose you will receive between 1-10 signals a week or 20-40 signals a week. This is a big red flag! You cannot force the market to give you that many trading signals. If you look at our strategies you will see that some weeks there are 10 trades made and other weeks none. You only want to trade when the markets gives you a possibility that fits your strategy and plan.
There are also trading signal providers who offer you a free period, what is wrong with that? Well, keep in mind that nothing is really free. In most cases you will probably have to sign up with a broker and use their link for that. After the registration is successful and you made a deposit you will be added to the group. Sounds free, and it is for you.
But the signal provider will get a fee from the broker for bringing a new client. These fees can be up to $1000 for 1 client! So good money, and they trick you with their signals. If you signed up, made a deposit and made some trades the signal provider will receive the fee from the broker. So the signals
they send you will only help them to make you trade so they get their fee.
If you are not convinced yet why trading signals never work you can always think about how professional the trader you follow really is. I don’t believe that a professional would ever work as a signal provider. A professional knows that there is no way with all the latency and high broker fees that a signal follower will make goof profits with signals. Most of the signal providers want to stay anonymous for a reason. The trading signal providers come and go. They only show you the good trades that are made in the past and happy customers in their groups.
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