WHY FREE FOREX SIGNALS ARE BAD FOR FOREX TRADERS?
Forex traders have to depend upon valuable actionable insights generated from existing forex market trends and their past trading experiences to enable effective trading and sustain growth over long periods of time. Forex signals are specially compiled to provide such valuable insights and aid traders in speculating correct trading outcomes.
However, a proper analysis indicates free forex signals actually function more as deterrents rather than facilitators. Discover how forex signals adversely affect traders in this article.
WHAT ARE FOREX SIGNALS?
Valuable trade-related inputs greatly help forex traders in maximizing their ROIs. Forex traders, the world over, often have to make important decisions, especially when they’re trading in high volumes. Trading signals are basically designed to function as valuable guides to aid traders in their decision-making process and help them make informed buying-selling decisions that are profitable. Even new forex traders who’ve just started with their trading account
While most experienced or long-time professional traders tend to depend largely upon their trading knowledge, experience levels, and analytical skills, the majority of forex traders whether they’re novices or have some trading experience in the past think highly of forex signals, and consider them as important insights for undertaking informed trading decisions.Forex signals serve as recommendations made by human analysts or trading experts, or trading software and robots. A forex signal typically provided by a forex signal service provider, contains key information, or data, concerning a currency pair at a predetermined time and price. They’re designed to run in real-time. They can be availed in several ways, generally in the form of SMS notifications. However, based upon your signal provider and your personal preferences, you can also avail them through your website, social media channels, emails and even RSS feeds.
TYPES OF FOREX SIGNALS
A forex trading signal helps a forex trader to analyze and determine whether to buy a particular currency pair or sell it at a given time. They can also be originated from technical analysis charting tools or even from news-based events.
Forex signals can be freely acquired or bought. Some traders order both free as well as paid signals to enhance their decision-making process.
The type of forex signals are determined by the manner in which they’re originated:
- Manual Free Forex signals
The trader has to use a computerized trading system and manually search for emerging currency trends by studying all forex activity taking place in the market, and thereafter analyze the information compiled through the extensive study to reach meaningful and useful results. This typically takes huge amounts of time and can be often very tedious. Moreover, complete mental discipline is also required to dedicatedly spend long hours in front of a computer.
Unlike an automated signal generator, a human trader can assess the forex market in a more intelligent way that automated software and robots can’t. This is because they can understand and analyze currency movements based upon their personal experiences which software cannot do so. They can “sense” the trend rather than “arrive” at it.
However, the downfall of generating a forex signal in this manner is that the trader has to utilize his/her own knowledge and intelligence to arrive at the results. Since humans are liable to make mistakes, all researching efforts can still go to waste if the person does analyze the trends wrongly and arrive at erroneous decisions.
- Automated Forex signals
In the case of automatically generated forex signals, the trader simply inputs some information for a particular currency pair while the software does all the analysis part. The software automatically determines appropriate actions to take based upon your decision to sell or buy a currency pair. It does the fundamental analysis, determines the price action and reduces the complexity of analyzing current forex market trends which greatly helps the trader in saving a lot of operational time. Automated forex signals greatly help in live forex trading since a lot of time is saved. Many forex brokers prefer to remain updated with current forex market trends through the signals.
However, the negative aspect of using automated processes for forecasting how forex markets are likely to perform for a given currency pair is that you’re solely dependent upon the logic contained, or ingrained, in the software algorithm. It can be limited. There’re no guarantees that the software shall be accurate at all times and always provide you with profitable live forex trading insights.
While trading at huge volumes it can prove to be disastrous if you’re completely dependent upon an automated forex signal to make profits.
WHY ARE FREE FOREX SIGNALS BAD?
Traders new to the forex markets think about forex signals as a silver bullet solution for reducing trading complexity and making instant profits. The idea of using a forex signal to facilitate your trading process by making it very simple in the sense that you’ve to simply sit back and wait for the “correct” signal to arrive so you can capitalize upon it, is by no means true or even credible. It’s not as simple as that.
While not all forex signals are “bad,” the way that the vast majority of people think about forex signals and what they propose to achieve for the traders, most certainly is. Moreover, subscribing to forex signals may incur charges. If you subscribe to them for short durations, they won’t provide any long term benefits since the forex market is highly volatile and constantly keeps on changing by the hour. Forex signals change as market conditions change. Using them as and when they’re made available can’t help in generating sustained trading profits and to stop loss from occurring.
- Reduces your confidence
The best example here would be using a calculator in your office or at home for doing calculations. Most individuals, irrespective of their academy backgrounds, don’t find it very difficult to do simple math. But the day you start using a calculator for doing simple calculations and keep on doing it because it’s easy and saves you time, you’re inviting a vice that’s going to dominate you and make you addicted to using it. It would become very difficult, if not impossible to do math without a calculator.
The same rule applies to both free forex signals and paid ones. The moment you start believing in them blindly and become dependent by using them to arrive at your trading decisions, you’ll start losing your confidence. This can be perhaps the biggest mistake you can ever make because traders always gain experience over time as they continue trading and keep on learning from their past mistakes. All professional forex traders have matured out by repeatedly trading the currency markets and learning something new in the process.
- Not tailor-made to suit your trading activity
Forex or trading signals are observations or results, often obtained through statistical processes, and derived at after analyzing the forex trends for a currency pair. The information they provide is generalized in the sense that they reflect the behavior of the pair in the currency market and don’t have anything to do with your real-life trading activity. You can’t avail readymade or specially tailored forex trading signals to suit your specific trading pattern while you trade with money.
So even if you’re ordering or buying forex signals, you still have to put in your own personal thinking with regards to how the signal information can be correctly used to your benefit.
- Losing control while trading
Forex signals, as the term rightly suggests, merely offer “signals” or indications when and how currency pairs should be bought or sold. Many times traders respond automatically to signals and trade because the signal tells them it is a lucrative time to do so.
This is perhaps the most serious mistake you can make. It’s not mandatory to trade each and every time the market offers an opportunity to do so. Regardless of what the signal prompts you to do, you should be in command and do organized and emotion-free trading when you feel is the correct time to trade the forex markets.
- As a trader, you cannot afford to lose money following signal services, free forex signals, or trading signals usually cost around $150 to $300. They typically start as free live forex signals for a period of two weeks and then it would be a paid subscription. There is a saying that we have in the world of forex trading bears make money, bulls make money, and the pigs get slaughtered.
Nowadays you will also find that forex brokers are giving trading signals or free forex signals and these are forex brokers that are not to be trusted as you cannot become a forex trader by merely receiving alerts to your mobile phone.
The most common currency pairs you will find free forex signals for would be GBP/Usd, USD/Cad, and Eur/Usd. Although placing pending orders in trading forex with the appropriate stop-loss levels may seem like the way to move forward using forex signals but it still lacks the technical analysis and fundamental analysis and personally, this is very high-risk trading as you do not have the understanding behind the trades
As a financial trader, the method of placing a trade in the forex market should be as follows:
A)Decide your trading bias based on Fundamental analysis
B)Decide your Entry on Technical Analysis
C)Decide your Trade time on Logical Analysis.
Are you still considering using Free Forex Signals?
An Average trader will lose approximately £3000.00 without the proper education so let’s look at how the breakdown of the loss when using free forex signals.
If you started your trading account with a forex signal service provider, then taking the average fee of £100 a month this means you will be investing £300 just to implement someone else's strategy without the technical understanding of why these trades are being taken. Now if you lose your first three trades then you will try and recover the money by over leveraging and this process of trading will free forex signals will be repeated a minimum of 10 times in a forex traders’ career. Believe us when we are saying this 90% of Free Forex Signals are dependent on clients that have lost in the forex market.
Once you do start to implement the trades on your account without any guidance even if your stop-loss entry and target are given the odds are that you will try and change all three once you have had your first few losses on your forex trading account.
Forex Trading is not a get rich quick scheme and the promises of 1000’s of pips are only possible with a methodology and not just a strategy.
If you are still willing to move ahead with your free forex signals, then consider these points:
- How many years has the company providing Forex signals been established for
- Do they actually trade real funds?
- What is their market credibility if any
- Have they ever worked in any financial institution or on a real hedge fund?
No one can become a doctor by watching a youtube video or taking free courses from uncertified professionals. If you want to earn with consistency then learn from Qualified Financial Traders.
WHY A PROFESSIONAL APPROACH TO LEARNING TO TRADE IS BETTER?
Here at Platinum, we provide a fully personal one to one mentoring service to teach you exactly how to do the trading analysis and trades yourself. You don’t want to be sucked into signals as you can clearly see from the points made in this article. Learning from a professional who will provide you with a professional education will give you longevity in trading and allow you to make consistent profits.
"Learn to trade and stop using free forex signals-Nirav Shah"
We hope from today’s article, that you are able to take away that being involved in signals is not a good idea if you want to give yourself a chance at making money. Take the time to understand supply and demand in the market from true professionals who give you realistic expectations of your profits.
The Platinum Formula:
Perfect Fundamentals + Perfect Technical Analysis + Perfect Logic + Perfect Risk Management = Perfect Trade
THE PLATINUM WAY
At Platinum Trading Academy, United Kingdom, we teach all individuals from different walks of life to become a full-time trader or create a secondary revenue stream by trading part-time. We trade in an Institutional Way by letting the market come to us and being patient. Using Platinum’s Trading system you can take many Pips out of the market. We can ensure using this style of trading your trading will make a turnaround as you will become much more consistent.
If you want to trade like the professionals do, making consistently profitable returns from your trading, get in touch with us and we will demonstrate live exactly how we approach the markets.
Hopefully, you have enjoyed today’s article. Thanks for reading!
Have a fantastic day!
Live from the Platinum Trading Floor.