The idea of using a trading signal service sounds great. You sit back, receive an email or text alert, place a trade and watch the money roll in. Then wash, rinse, repeat.
I will not be telling you that signal providers are bad, in fact some trading signals will give you quite a winning edge see ATLAS but I want to illuminate why using a signal service flies in the face of being a professional trader, which you want to become.
As a student, amateur or intermediate trader your goal is to become self sufficient. That is to trade and profit at your leisure. To have your own system, your own money management rules and to control your destiny in the currency markets by following a signal provider you are violating this goals in the following ways
- You have zero opportunity to grow: An alert pops in your phone, it’s a buy signal for GBP/JPY with stop loss and take profit levels. You take the position. @ hours later take profit is hit and you have made money, you are happy. But you have no clue why or how it was a buy and why those exact levels. And you will probably not recognize the opportunity when it repeats itself again. Because you never learnt anything. “Food” is gathered for you, prepared for you and chewed for you. All you do is swallow like a little bird. Professionals know the hunt because they gather their own food! If you are okay with swallowing good for you but don’t call yourself a trader.
- Your goals are limited to your service: Majority of good signal providers don’t send signals all day, once they get a win they cower back to their huts. Suppose your goal was to grow your account by 5% everyday and that GBP/JPY signal above only moved 100 pips a 2% increase with good money management you would have to wait for the next day and who knows whether you will profit? and your goal would be -3% behind.
- Your destiny is not in your hands: This one is particularly obvious. If the guys you are following are having an unlucky streak you are also having an unlucky streak despite the fact that you drew the sun this morning(a tarot card reference). And if they quit trading well, you get lost trying to find another provider.
- Missed opportunities: Let’s go back to the signal in (1). Suppose after you closed on take profit the asset further sky rocketed? You missed out because you did not know how could you? Your job was to swallow and what of the same trade on GBP/USD, GBP/CHF and a reverse on EUR/GBP aren’t they co-related? You would have had 4 positions in massive profit but because you’d rather swallow you ate only boiled eggs on a breakfast buffet with fruit salads!
- You won’t become a millionaire: Name 5 Forex millionaires who follow signals and which signals they follow, oh wait there is none. You want to actualize yourself in this trade you have to get down to the markets and learn a few tricks. There is no shortcut.
- You have a dependency culture: Like the little birds you are depended on your provider, if they don’t trade for a month you don’t trade either, to hell with your bills right? You are sheep! And you know what they say about sheep in trading… Bulls make money, bears make money and sheep get slaughtered. You’ll get slaughtered eventually.
- They are an additional expense: Trading signals are expensive thus they drive your trading costs up. For example if you have only $100 for investing following the ATLAS system will cost you $85 plus transaction fees by your bank leaving you with only $14 for investing but if you were independent you would begin with $100.
I could go on but let’s finish, If you truly want to achieve financial freedom through trading the markets. Ditch your signal provider, or better yet while still subscribed start learning how to trade seriously yourself. I’m out!