So how can you find the best Forex signals for your trading? How can you avoid being scammed and learn to judge whether a signal service is legitimate or not?
I’m going to tell exactly what to look out for if you’re looking for FX signals so you’re in a position to choose what’s best for you.
Why look for signals?
Let’s first explore what motivates people, and quite possibly you, to look for signals. I’m going to lay down three broad-brush types who cover 90% of those looking for trading signals.
The lazy trader
This is the trader who wants to put as little work in as possible and thinks that by copying a signal it’ll be the short-cut to trading riches. This ‘trader’ usually has dreams of owning a ‘Lambo’ and is attracted to outrageous claims of claims of wealth that the signals he purchases will apparently generate.
The logical trader
This is the trader who has thought about signals in a seemingly logical way. They’ve thought about how people learn new skills in other occupations and walks of life. This usually consists of learning from people who are already experienced and copying them, thus why signals make sense.
That leads them to conclude this is the way to approach trading signals.
It’s logical, makes sense and they are half right. We’ll explore the issues with this position shortly.
The $10 hero
This is the trader who thinks they are going to turn $10 in to $10,000,000 by following signals. It doesn’t occur to them that in order for this to happen they’d have to pretty much make the greatest returns in history. They believe the Forex signals they sign-up to will do this for them.
The issue with trading signals
Let’s cut to it and dive in to the issues with signals before we look at how signals can actually help you and make you profit.
Most signals providers aren't traders
The reality of trading is that most people offering education, which includes Forex signals, aren’t actually traders themselves. They are just trying to make money through selling the signals or via other related means. All they need is a constant flow of people paying them to make it worthwhile. It doesn’t matter that they can’t trade, they can just fake the performance stats (more of that later) which will sucker-in the next dreamer to part with their money.
As I am literally typing the last paragraph, this comment has been made on another article. I get dozens of these a day on this website and our YouTube channel that I have to delete and it provides a perfect example of the sort of marketing that scammers produce. It must work, or it wouldn’t be constantly there.
The industry is full of this type of BS and you need to be aware of it.
It's hard to verify performance
There are services which allow a trader to post their trading performance. The issue is these can be manipulated and faked so you really need to know what you’re looking at. For example, if I show a lot of people a graph like this:
You may think, wow, a near 12,000% return in fewer than four years with hardly any draw down…
“Follow my signals and you too can achieve this!”
The problem is the graph is fake. And worse still it could be made to look real if a dodgy off-shore and unregulated broker is used as the source. I’ve had said dodgy, off-shore and unregulated brokers approach me asking to take part in such schemes where they’ll show the account as being ‘real’ when it is in fact a demo account or just made-up
I write and say this a lot – if it sounds too good to be true, it probably is. Especially with trading.
Signals don't work on their own
When you receive signals, you more often than not have no idea what’s behind them. That’s usually not OK because you, the potential follower, probably have an interest in trading and the markets.
What’s the strategy? What’s the methodology? What is the signal provider seeing to make them trade?
Perhaps you think this doesn’t matter as it’s only the outcome that matters. That’s where it begins to fall to pieces and why signals don’t work on their own. Here’s why:
Signals needs confidence
Trading is all about confidence. Confidence when it’s going well, and confidence when it’s not going so well.
You need rock-solid confidence to believe in your strategies and abilities. This is primarily because of draw down. Draw down is where we a trading strategy has periods of losing. It’s measured in a % from the when it starts to when it ends.
All sustainable, professional trading strategies will experience draw down. If someone claims to have a ‘no loss strategy’ or something similar it’s BS.
The chart below is one of my strategies I’ve been running since the end of August. As you can see it doesn’t go straight up. There a periods where losses create draw down and periods where it goes sideways.
Assume I sent all those trades to you as a signal. You’d be up 35% in 18 trades (based on 2% risk per trade). Awesome.
The problem is you wouldn’t be. You would never have followed them as instructed. Trade 4 was a losing trade and trades 5, 6 and 7 were basically break even. It took until trade 8 to get back to new equity highs over a period of 3 weeks.
I had the confidence to know I’d get back to new highs and exceed the draw down. The problem is you wouldn’t have shared that same confidence. That’s because you don’t understand the strategies I am trading and reasons why I got in to the trades.
You’d have seen a losing trade and a couple of break even trades over a period of 3 weeks and probably have abandoned ship and looked for another ‘solution’.
So what is the signal solution?
You may be ahead of me here with these solutions.
Ready for it?
You need to learn the strategies and reasons why the trades are being taken in the first place. If you understand the strategies then you will have confidence to take any trades and be able to keep taking them when there is draw down or the trading performance is going sideways.
Even if you manage to find someone legitimate you need to understand the strategies.
So what do we do?
We run a Telegram channel where we send all our trades to. That looks like this:
The essentials are there. A trade chart along with the entry, stop and profit targets.
The difference with us is the people who have access to these signals also have access to our live trade room and members’ area where all our course and trading strategies are contained.
This is some of our members’ area showing you some of the courses / strategies we offer which provide the foundation to have confidence in the signals.
We then reinforce this by traders being able to come and watch us trades the signals live. This solidifies the understanding.
Best free Forex signals
I could write quite bit here but I’ll get to the point and work out from it.
Is it going to be good if it’s free?
It’s fair to say traders are motivated by money to some degree. There’s no problem with this. It’s nothing to deny or try and hide.
What makes you think any trader is going to want to give away signals for free? Let’s break down the work involved with trading profitably using the ‘3 keys to trading success’.
Each one of these components is a lot of hard work. Ever-changing market conditions require changing and adapting different strategies. A professional trader’s trading psychology needs to be rock solid to remain consistent, and proper recording and analysis takes hours of work per month.
A Forex signal provider isn’t going to do all this hard work and not benefit from it. That’s how business works. That’s how life works.
That’s not to say you should be charged a fortune. Whilst there’s nothing wrong with a trading educator making money, they should (in my view) be motivated with wanting to help people, too. I couldn’t in good conscious take lots of money off people.
Usually when people are offering ‘free Forex signals’, it’s some scammy front to get you to purchase something else. The classic sign is the MT4 mobile screenshot, which will no doubt be a demo account, showing profit to draw you in.
A screenshot like the above is a massive red flag. Be very critical of any provider who tries to draw you in with something like the above.
Conclusion
You’ve learnt an essential reality about Forex signals and trading signals in general. If you do not understand why the signals are being sent then you will not trade them the way they’re intended.
If you have any questions then please contact me on WhatsApp or Telegram below. If you have any questions about our membership or how we can help you then please see this page.