i. Forex signals are tips or recommendations to buy or sell currency pairs that are received after paying a fee.
ii. Forex signals alone will not make anyone rich.
iii. Could be better off learning the skill and trading on your own, if you can, rather than depending on someone else.
What are forex signals?
Before I go on to discuss the reality behind forex signals, let’s understand what it actually is so that we are all on the same page.
A forex signal is a recommendation to buy or sell any of the currency pairs that are traded out there. This is a type of call or tip sent that is to be executed at a particular price and time.
In forex signals, a trader or a signal provider will send the signal purchaser these signals as and when the strategy they use generates it.
These signals could be automated or manual i.e. signal purchasers may get the trade placed in their account automatically or they may have to manually enter everything and then place the trade.
Some signals will have fixed stop loss, entry price, and take profit levels while some may not have all three and it may be up to the signal purchaser to decide the rest.
There are various types of signal providers out there, each of them trading with their own strategy. It could be scalping, day trading, swing trading, etc.
This so-called industry of signal selling gets a lot of attention and thousands of individuals flock to purchase these services. Despite all this, it has a bad name to it.
Who gets into forex signals?
It sounds exciting that you can sit at a beach sipping pina coladas and you get messages about trades. You just have to spend a few minutes of your time to place the trades and you can enjoy yourself at the beach.
This is the worst thing that I’ve ever heard and every time I hear about people fantasizing about a life trading through a laptop by the beach, I simply ignore such people.
Most people that get into forex signals or purchase signals from traders, often have these kinds of unrealistic expectations.
They treat forex as a means to get rich quickly and they treat signal providers as their messiah to take them out of their normal lives and transform them into a luxurious one.
Some individuals that purchase these signals might do so because they do not have the slightest idea about the forex market or may not have the time to spend learning about it and watching charts but still want to capitalize on price movements of the currencies.
I have even come across and heard about people opting for signals because they are not confident enough to trade their strategies in the live market.
If you are someone that has been buying signals from a trader then you seriously need to read through this blog post.
The reality of forex signals
Now that we know what exactly are forex signals and what type of people get into this industry, let’s look into the darker part of this industry that most people aren’t aware of or often tend to ignore.
Forex signals have their own share of pros and cons or advantages and disadvantages, and if you are someone that trades based on signals provided by a trader, then I would expect that you’ve taken the decision after careful consideration.
The darkest truth or the reality of forex signals is that it will not make you rich. You might earn some money in the short term but in the long term, you will not sustain it.
This is primarily because of one reason, unrealistic expectations, both on the part of the signal provider and signal purchaser.
Signal providers may work out some strategy that gave them good results during backtesting, but they do not have much idea about it would perform in the live market.
They would then sell signals only to find that their strategy was not as good as it seemed and due to poor risk management, accounts went bust.
On the other hand, people who purchase such signals, look to earn quick and large bucks through signals so they exceed their risks limits and take trades.
A good trade a couple of times will make them go on cloud 9, but one bad trade will take away everything.
After each loss, such individuals will look for another trader and trade based on their signals. They will blame the signals entirely for their loss but will never admit that they messed up in risk management.
The cycle keeps continuing.
I have even seen and heard of cases where signal providers sugarcoat details of their strategy and do not provide correct and actual information about their strategy.
This leads to signal purchasers buying the signals based on the data that is shown, only to find out that the outcome or results are completely different.
During this, the signal purchaser loses money, while the signal provider earns money through the fee they charge for providing the service.
Even after knowing all this, some individuals go ahead with forex signals because they do not know how to trade, or don’t have the time to put in.
It should be noted that forex signals will not teach one to trade. You might just learn how to place trades but it is very unlikely that you learn the exact rationale behind the trade.
Forex signals are often looked upon as scams that are run by individuals to trap innocent newbies.
It is very unfortunate that even though these scams have been exposed many times and there are lots of information and testimonials about these scams, people still look to fall for these malpractices.
Regarding forex signals, I would sincerely advise readers to avoid them. You will be better off if you learned the skill and applied all the learnings in the market.
Like I mentioned earlier, forex signals might make you some money in the short term but in the long term, it is not sustainable.
Even if you are someone that is hell-bent upon availing of signal service from a trader, then all that I can say is that you must research properly before you take any decision and make the decision at your own sole risk.
There might be some good signal providers in the market that are not looking to scam or take the money and disappear but they are less in number.
Hence, you will have to put in the work to make a decision.
Do you trade based on signals?
Have you ever purchased a forex signals service? How was the experience for you? Do let me know.
I’d also like to know what made you opt for such services in the first place.
I am sure there will be mixed opinions on this, but nevertheless, I am looking forward to having quality interactions.
Do share this blog post with others and feel free to reach through the comments section for absolutely anything.