Many novice forex traders consider using signals to help them make profits. While finding a reliable signal provider is difficult, if you find the right one, you can make some money. But can forex signals help you get rich?
Forex signals can’t make you rich since forex is a long-term endeavor that you can’t pull off through signals. Although they may help you earn money in the short run by helping you place profitable trades, signal providers don’t offer money and risk management strategies for long-term success.
Keep reading to see how forex signals can help you become better traders and how you can find a reliable signal provider.
IMPORTANT SIDENOTE: I surveyed 1500+ traders to understand how social trading impacted their trading outcomes. The results shocked my belief system! Read my latest article: ‘Exploring Social Trading: Community, Profit, and Collaboration’ for my in-depth findings through the data collected from this survey!
Table of Contents
Are Forex Signals a Myth or Reality?
Forex signals are buy-and-sell suggestions and ideas that tell traders where and when to enter or exit a trade. The Internet is full of Forex signal services that promise to make you rich by telling you what to do.
As great as the idea sounds, it may be too good to be true. Imagine sitting at home, waiting for a text or email telling you to place a trade, and you do what it says. But if it’s that easy, why do many people go through the pain of learning, taking forex courses, reading books, gaining experience, and even failing repeatedly?
Plus, if a person or company is confident that their strategies work, why don’t they place the trade themselves? Have you ever seen a top forex trader use other people’s suggestions to base their trading on them?
Many of these services are scams that take advantage of people’s greed and unwillingness to learn and put in the time. They promise you astronomical figures and profits, which every trader worth their salt would know can’t happen.
However, not all signal provider services are scams. Sometimes brokers decide to give free or paid signals to advertise their brokerage. Or it could be that selling forex signals is a profitable business. Suppose the service has 500 clients, each paying $50 of monthly fees. $25000 a month isn’t so shabby to ditch the whole forex trading business and enter selling signals.
4 Things To Consider When Selecting Forex Signal Providers
So, forex signals can help you make profits on forex, which is not guaranteed since no one can be sure the signals pay off. But how should you pick a reliable signal provider?
Regulations and Legal Matters
The first thing to consider is that companies and individuals provide forex signals. Which of them are better? Forex signal providing is a business that requires full-time care and studying market trends. An individual can’t do all these things alone, no matter how much time they put into the work.
Therefore, it’s better to look for a company to get forex signals. Plus, it’s easier to check these companies’ reliability based on official data. They’re more transparent since they have to provide a valid bank account and detailed information about the company founders and directors.
Ensure the company is registered with your country’s regulating bodies, which significantly narrows down your options. This way, you ensure that an expert provides the signals and not a scammer who sends false signals to benefit your broker.
Track Records
To determine a forex signal service isn’t a scam and can help you make money, carefully study their track records. If the company is reliable, they’ll be more than happy to give you anything that convinces you to work with them.
You could also go online, check forums, and ask people on social media to get a better picture of the service providers. But remember, even the most successful track records can’t guarantee future success.
Their Profit Claims
A reliable signal provider never promises 100% wins. It’s a known fact that forex trading comes with many risks, and even the most successful traders experience drawdown periods. If they don’t give you a risk disclosure that describes all potential risks, steer clear of them.
Automated or Manual?
Forex signal providers can use human traders who monitor market trends and make decisions accordingly. They can provide signals by considering market psychology. Alternatively, a specific software can give you signals by tracking market trends, which is more reliable because there are no human errors involved but they can’t consider market psychology.
So, it’s up to you to decide which one can help you better. Talk to the service provider and do extensive research before putting your hard-earned money on the line.
Can You Rely on Forex Signals for Long Term?
Let’s say you’ve decided to subscribe with a signal provider and trade based on their signals. How far do you think you can go with them? Can they help you get rich?
The answer depends on what you want from them. If you want to make some profit here and there, a reliable signal provider can help you for a short time. But what about the big picture? Do you want to establish yourself as a profitable long-term trader? In this case, signal providers aren’t for you. Here’s why:
Risk Management
Most signal providers don’t include risk management strategies in their services. But it’s a major factor that affects your success as a trader. They may tell you to avoid risking, say, more than 1% of your capital. But that’s not a solid risk-management plan. They don’t know anything about your risk appetite and how it fits into your trading style. They just plan for one specific trade and make sure it’s profitable.
Trading Strategy
Not only do signal providers fail to provide a risk-management plan, but they also don’t consider your trading strategy. That’s because they don’t know -and care- what you want to achieve in 6 months or a year or ten years. The signals they provide don’t consider your take profit, trading style, and the big picture regarding your trading goals. So, they may be able to help you make some pips in the short run, but they can’t help you get rich and profitable.
What Should You Do Instead of Buying Forex Signals?
If you want to be a profitable forex trader and get rich, you have to educate yourself. There’s no way around it. It takes lots of time and effort to get the market right, understand the market dynamics, and devise a well-thought strategy. You could use all the help you want, subscribe to signal providers, and even get a mentor, but it all boils down to one thing: if you want to get rich, you have to pay for it.
However, if you insist on relying on forex signals, make sure to do your part as a trader, too. Don’t put the whole responsibility on the signal provider because trading is personal. If you want to get rich, the signal provider can do 30% of the job. The rest is up to you.
First, educate yourself through different ways, such as getting a mentor or taking online courses. Then, try to come up with a robust strategy that includes money and risk management plans. Make sure the forex signals are in line with your strategy whenever you try to act on them.
Last but not least, the discipline and patience needed for trading as an independent trader plays a crucial role here, too. Even with forex signals, you have to control your emotions, avoid overtrading, and observe market trends.
Author’s Recommendations: Top Trading and Investment Resources To Consider
Before concluding this article, I wanted to share few trading and investment resources that I have vetted, with the help of 50+ consistently profitable traders, for you. I am confident that you will greatly benefit in your trading journey by considering one or more of these resources.
- Roadmap to Becoming a Consistently Profitable Trader: I surveyed 5000+ traders (and interviewed 50+ profitable traders) to create the best possible step by step trading guide for you. Read my article: ‘7 Proven Steps To Profitable Trading’ to learn about my findings from surveying 5000+ traders, and to learn how these learnings can be leveraged to your advantage.
- Best Broker For Trading Success: I reviewed 15+ brokers and discussed my findings with 50+ consistently profitable traders. Post all that assessment, the best all round broker that our collective minds picked was M1 Finance. If you are looking to open a brokerage account, choose M1 Finance. You just cannot go wrong with it! Click Here To Sign Up for M1 Finance Today!
- Best Trading Courses You Can Take For Free (or at extremely low cost): I reviewed 30+ trading courses to recommend you the best resource, and found Trading Strategies in Emerging Markets Specialization on Coursera to beat every other course on the market. Plus, if you complete this course within 7 days, it will cost you nothing and will be absolutely free! Click Here To Sign Up Today! (If you don’t find this course valuable, you can cancel anytime within the 7 days trial period and pay nothing.)
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Conclusion
Many beginners consider using forex signals to avoid learning the basics of trading and make profits more easily. If they don’t fall into the trap of scams and find a reliable source, they can indeed make a few pips.
However, if they want to get rich by trading forex, they can’t rely solely on forex signals. They need a trading strategy with a robust risk-management plan to help them succeed in the long run. Plus, they have to be patient and don’t give in to their emotions.
BEFORE YOU GO: Don’t forget to check out my latest article – ‘Exploring Social Trading: Community, Profit, and Collaboration’. I surveyed 1500+ traders to identify the impact social trading can have on your trading performance, and shared all my findings in this article. No matter where you are in your trading journey today, I am confident that you will find this article helpful!
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