FX signals have always been the topic of harsh debate. The trading community is divided into two camps, namely advocates and enemies of FX signals. We stand on the latter side. Before explaining our point of view, we would like to remind what actually Forex signals are.
Generally, traders rely on signals as they are meant to provide the accurate info about the entry point for going long or short. Forex signals are not random, most often they are based on the set of technical indicators that work together to generate the trading decision.
There are two types of Forex signals – some are created manually by the trader, some are produced by the special automated software. Nonetheless, trading signals are mostly unreliable in the live Forex trading. In this article you will find out all the reasons.
Common pitfalls of FX signals
Forex signals are thought to be developed by the seasoned veterans that watch over the market 24/7. Therefore, they do not object to sharing their wisdom. In reality, such situation would rather be an exception. No one really knows who produces the trade signal, as the traders or software companies rarely share any info about their experience or whatsoever. This raises a lot of questions about the precision level of each trading signal. If the FX signal is fake or false, you will eventually lose money.
We can tell more about Forex trading signals here. There are many trade signals which are available for free. Traders mistakenly believe that the absence of costs is the advantage. In case the signal is free, what is the motivation for the signal provider to develop the high quality? There is none in fact. Free signals often display wrong information or simply do not work in the real trading environment. Other signals are available for additional fees, but you are not protected from the frauds here too.
Another problem is the automated FX signal system. The purpose of such system is to automatically generate buy/sell decision based on the algorithms and technical data. Therefore, human negative interference or hesitation are entirely eliminated. However, if the system was the 100% profit maker, why would anyone share it? Logically, such advanced technologies are not revealed to the retail traders. This substantially undermines any trust in automated signal system providers, which means that most of them are pure scams.
Conclusion
Getting or purchasing Forex trade signals from someone else can be unjustifiably risky. Do not waste your time and money on elusive opportunities and pointless expectations. We should admit that in Forex or any other industry there is no holy grail for making great profits. The success depends on the skills and knowledge of the trader. Thus, it is much better to devote more time to the market analysis and the trading strategy. Afterward you will be able to interpret different trade signals just by looking at the charts.
