Forex signals can be so cool.
Especially for the fact that you just have to keep your fingers crossed.
Relax and patiently wait for your so-called “signal providers” to send you trading signals ALERT!!!
You quickly open up your MT4/MT5 and place trades.
You win.
You rinse and repeat the process & hope it keeps playing out this way.
You are happy and rely solely on these signal providers to make consistent profits for you on a monthly basis.
Either you dreamt about doing this or actually leveraging it.
But the reality behind it is just “FANTASY”
As a trader who has worked with multiple investors and has passed through this phase in ones trading career, I will use the medium of today’s post to educate you guys so that;
You’re going to understand the myths behind forex signals,
How reliable & sustainable can they be in the long run?
And why you should never rely on signals as a trader.
That said!
First of all,
Key Takeaways
- Forex signals won’t make you rich
- Relying on signals kills your confidence, especially during losses, and adversely affects your trading psychology.
- Using signals disrupts your trading system and prevents you from developing and improving your own trading skills and strategies.
- Many signal providers, especially on social media, are scammers, making it hard to find trustworthy sources.
- Forex signals do not teach you the necessary skills you need for long term success in trading.
What do we call “Forex signals” and who are “signal providers”?
Forex signals are trade setups from signal providers that tell you when to buy or sell in the currency market.
They make trading decisions for you.
While Signal providers are traders who provide these setups.
In other words,
They made the sets of forex signals readily available for signal consumers.
Who are signal consumers ( traders who rely on these signal providers to make a trading decision for them)
In most cases,
These signal providers charge a set of fees either monthly or annually to get these trades setups (Either you win or lose).
And these usually happen when traders,
Who aren’t confident in themselves,
- Traders who are IMPATIENT
- Traders who believe they can’t be successful in this market
- Traders who are not learning the most realistic way to trade forex right away and Lastly,
- Traders who are obviously looking for shortcuts to success end up In the hands of these signal providers.
Are These Forex Signal Providers Reliable?
A query usually pops up like this when you hear signal consumers say stuff like
“I will be getting Signals from a professional/profitable trader & follow their sets up and become successful like them too”
These mindsets can be misleading, especially when you are starting out (more on that discussed later).
Nobody wants to pass the stress of going through trials and errors for a couple of months just to learn how to trade forex profitably.
Everyone interested in forex just wanted that quick win right off the bat, if only it were that easy, and if yes, everyone would actually go for it.
So the answer is “NO” they are not reliable and there are myths behind these forex signals and how they work.
Myths Behind Forex Signals
I am not a fan of giving out forex signals and I never started out that way.
I only go on my youtube channel where I show my charts on potential trading setups to trade and also how I analyze the market.
No BS.
“Fores Signals Aren’t Going To Make You Rich”
Hate it or Face it.
These signals aren’t going to build the self-dependent life you desire as a trader.
Here is why?
It Kills Your Confidence In Trading:
The point is,
You sign up for a paid plan with this signal provider firm.
You were given signals to trade a couple of times and it results in a win.
GOOD!
Moving down later, You started experiencing some drawdowns, more drawdowns, and even more.
In terms, this actually results in more losses for you.
Now at this stage, you may be wondering
“What the HECK is actually going on?”
“Could it be my stop loss was so close to the market”
“I should have waited a little more before I entered the market”
“Oh, I entered the market too soon”, Bla Bla Bla……………..
At that point, your confidence strikes in.
Once the confidence has been triggered, it toils with your emotions negatively.
And that is the foundation of falling down from 100 back to zero.
The market is always changing and due to its dynamic nature, traders always give room for little drawdowns and that is where risk management comes in.
Most times when setups from signal providers start to experience massive drawdowns, especially when they don’t actually know more about the trader behind these signals, and how they interpret the markets, you are subjected to failure in the hands of these signal folks.
In other words,
You don’t know how their trading strategy works?
You don’t know, at what point is their entry triggered.
You get the whole story.
So Know this and Know peace.
As far as trading is concerned, Confidence is a huge factor & it is what differentiates struggling traders from profitable traders.
You definitely won’t want to toil with your confidence aka psychology as well.
It Messes Up Your Trading System:
If you’re starting out as a trader,
This is not the most realistic way to develop or improve your trading skills.
With that, You sit back, relax & boom…
Those signal folks have delivered some nice setups in handy for you.
You start using them.
Luckily for you, they can be a GREAT win.
But in the long run, your profit lies in the hands of these signals folks.
Whenever they shut down or close communications, you are left out.
Sounds BAD right?
And that usually happens because you rely solely upon the hands of someone else.
And then, you’re left with nothing.
And now you try to see if you can put it all by yourself, but you just can’t because you don’t know how they execute their own setups.
The earlier you know the better.
You are Prone To Scammers:
It is easy to source these signal providers but there are a lot of scammers especially on Instagram than good ones.
Luckily for you, if you land yourself in the hands of the good ones.
The reverse is the case when you meet the bad ones.
Most signal providers will try to offer free trade setups and use that to trigger you to opt-in to their brokerage firms.
But the truth is, no free signals are out there.
They only use the word FREE to enable you to sign up for their partnership firms..
With that, they earn commissions whenever any purchasing decision is made.
There is a correlation here, more like a referral contest kind of thing.
The more transactions you made or each open position you place, they get a commission fee for that.
In most cases, you end up paying recurring fees for their signals and still don’t get the desired results.
Who cares anyway, you wanted it so FACE it.
This should be a Red Flag for you and besides these folks are all “gimmicks”.
Not a Sustainable Way To Learn Trading (Cost You Money):
If you want to learn forex trading then be ready to give it all that it takes.
Understand that it never going to come easy.
It is not a quick process
Knowing setbacks is only part of the process when you experienced them during your learning curve.
YES, setbacks will always happen and your dedication to them is what keeps you going till you reach your GOAL.
Who cares anyway, the end result is rewarding.
But, starting with signal providers cannot let you achieve your desired results.
For instances,
At the learning stages of your trading career, you had these signals providers dropping nice setups for you.
You both are absolutely smashing it with a high win rate.
Remember you are still in the learning phase.
At some points when you experience some setbacks and you feel it hard to give up.
Just because you wanted to be perfect and be like these signals folks whose signals are great.
Yes, it can be great but remember, these folks once had those experiences too and they never gave up.
Because if they did, you shouldn’t be leveraging their trading setups.
Your Profits Lies In The Hand Of The Signal Provider:
You meet the good signal providers, yes!
The ones whose signals are usually profitable.
Good for you.
But have you ever thought of scenarios like this?
What if something happens to these traders
What if the path of communications between us shut down?
What if they change their terms that I couldn’t meet up with
With that, It will definitely end within a twink of an eye and then you go back in search of other signal providers too.
You became lucky again to meet another good one too and the process repeats.
For how long are you going to rely on someone to feed you by hand?
Think about this
How many self-made millionaires or hedge funds rely heavily on forex signals to make money for themselves,
If they had, everyone would be a MILLIONAIRE.
Final Words
Trading with forex signals from good providers can be a great way to start getting that quick wins especially if it has a higher win rate, but what happens when things go wrong?
And That will surely come to pass so you don’t want to be left out.
To succeed as a trader, there are multiple factors behind it and one most important of all is your mindset and dedication towards it.
If your goal is to make money trading forex then,
Why can’t you give yourself time to learn how to fish by yourself rather than letting someones feed you for the rest of your trading days?
In conclusion:
forex signals are definitely not a reliable and sustainable way to make money trading forex.
