The idea of using Forex signals sounds great.
You sit back, receive an email or text alert, place a trade and watch the money roll in. Then wash, rinse, repeat.
What more could you ask for, right?
Let me stop right there because it isn’t quite that easy. As the saying goes, if it were that easy, everyone would be doing it.
While I can’t and won’t sit here and say that all Forex signal services are “bad”, what I can say without a shadow of a doubt is that they won’t get you to where you want to go.
And where exactly is that, you ask?
That’s for you to decide. But if your goal as a trader is anything other than becoming self-sufficient, you may have chosen the wrong profession; and the mere act of using a signal service flies in the face of that very goal.
So if you are currently using one of these services or thinking about joining one, you will want to read this post first so that you know what you are getting into – or rather, not getting into.
1. It's All About Your Confidence
Let’s assume for a minute that you are an expert on all things astronomy. It’s something you have had a passion for since you were a child. You studied it in college and now you teach it to others every day.
I know nothing about astronomy. Aside from what I learned in my Astronomy 101 course in college, it’s a completely foreign subject to me.
If you and I both gave a lecture on the subject, it’s safe to say that I wouldn’t stand a chance. Your presentation would be much better than mine.
Why?
The obvious answer is that your knowledge of the subject matter stretches far beyond mine.
But aside from the knowledge itself, you would have something I could never have without years of studying – confidence.
You would have much more confidence giving a presentation on astronomy than I would. This confidence would give you the ability to articulate and expand on the subject matter, something I simply wouldn’t be able to do without having that same level of knowledge and confidence.
And when it came time for those tough, thought-provoking questions at the end of the lecture, you would be much better suited to answer them. Again, it all goes back to having confidence in the topic at hand.
The same principle holds true when it comes to trading the Forex market. You have to know why you are trading something in order to have confidence in it. And trust me when I tell you that confidence is a huge factor if you intend to become consistently profitable.
Think about it this way, how many of the self-made professional Forex traders or fund managers out there rely on someone else’s signals to make consistent gains?
I can’t think of one. Can you?
Chances are you won’t be able to either, and there’s a good reason for that. It’s because each of those individuals had to put in the “sweat equity” to get where they are. Nobody handed it to them on a silver platter and they certainly didn’t put their future in the hands of a stranger.
Sure, those traders had mentors along the way. But any good mentor knows that the knowledge acquired by any individual is only as strong as the effort it took to acquire that knowledge. In other words, knowledge acquired through great effort will always be superior to that which is acquired through little or no effort at all.
This is why the really good mentors in life will always ask that their students present every problem with a proposed solution. It isn’t because they’re lazy. It’s because they know that in order for that student to truly acquire knowledge, they must first put in the effort.
How much effort does it take to follow Forex signals blindly?…
At the end of the day it all comes back to having confidence in what you are trading. If you don’t know why you are trading something, it will be extremely difficult to hold on to the position through volatile market conditions – an ability that only confidence can give you.
2. Forex Signals Won't Fit Your Style
Regardless of the service you end up using, the signals provided will never fit your style.
What “style” am I referring to, exactly?
Your trading style, lifestyle and even personal style.
The process of developing a Forex trading strategy is more than just putting some rules together. Even if those rules help to stack the odds in your favor, there is always more to it than simply jotting down a few bullets points on a piece of paper.
The only way you will ever become consistently profitable is by developing trading rules that have been forged in the fires of tribulation. Stated less poetically, you have to put in the time and effort in order to find what fits your style.
By using a Forex signal service, you will never achieve the level of consistency that you desire. This is because the signals are not yours, therefore the rules by which those signals are produced are also not yours.
This creates a disparity between what you are doing and what you ought to be doing to appease your inner voice that calls for something more inline with your individual style – a vital task on the road to success. And when you try to suppress, or worse, ignore that inner stylistic voice, it only gets louder with time.
This is why most Forex traders spend years jumping between trading strategies. It isn’t because all of those strategies are worthless, as I’m sure there are one or two diamonds in the rough.
Traders do this because it takes time and effort to find a way of trading that fits their style. This explains why some Forex traders find success strictly using fundamental analysis, whereas some, myself included, use technical analysis. There are even some who use a combination of both fundamental and technical analysis.
It isn’t that one is better than the other, which is why a Google search for, “best Forex trading strategy” will never offer the answer many are hoping for. That answer can only be found by looking within while experimenting with a variety of different styles of trading.
Jack Schwager, author of Market Wizards sums it up perfectly with the following quote…
There are a million ways to make money in the markets. The irony is that they are all very difficult to find.
What he is saying here is that there are in fact a multitude of strategies that can “make money”, but you have to put in the work to find the one that will make money for you. Because if it doesn’t fit your style, it won’t make you money, regardless of how profitable the strategy may be for someone else.
This is exactly why I offer a 30 day money-back guarantee on my course and community. I never want someone to be stuck with a style of trading that doesn’t work for them.
3. No Effort Equals a Lack of Responsibility
This is a biggie. If you aren’t putting in the time and effort to do the analysis and make your own trading decisions, the idea of taking responsibility for your actions will be extremely hard to come by.
You may be thinking to yourself, “not me, I know that I am in complete control of my actions even if I am using a Forex signal service”.
But are you sure about that?
I will give you this, you may be making the final decision to buy or sell, but do you really know why you are buying or selling when it comes time to pull the trigger?
Probably not, and that can be just as dangerous as having no control at all.
If traders who use these signal services were really in control of their actions and taking responsibility for those actions, why would they ever leave a negative review about the service?
If they were truly in control, that review would only serve as an alternate means of self-reflection. But, as we know, traders do leave reviews and often talk negatively about these services on the internet. Comments such as, “xyz service made me lose 800 pips” or “I lost $1,500 trading xyz’s signals” are all too common.
My point is this…
When I take a trade, the only person I can point a finger at is the person staring back at me in the mirror. There is no way to avoid taking full responsibility for the decision I just made; it all falls on my shoulders.
It’s that kind of responsibility that allows me to reflect on what I did well and what I could possibly do better next time. Until you are able to do that without pointing a finger in the opposite direction, you will find it extremely difficult to improve your trading performance.
I’m not saying that you can’t learn from someone else. Clearly my own services show that I’m not of that mindset.
But there is a very stark contrast between learning from someone who is successful and blindly following their lead. While doing the latter may allow you to stumble across a few successes along the way, you will never be able to take full responsibility for your future until you put in the effort and start making your own decisions.
I provide the services that I do because I believe in what I do and how I teach it. My members know that there is no silver platter and they appreciate that. They know that it’s a combination of hard work, perseverance and structured coaching that will elevate them to the next level of their trading career.
Ditch Forex Signal Services for Good!
Before we talk about what may be a better path to success, I want to reiterate something I mentioned at the beginning of this post.
I am in no way saying that all Forex signal services are “bad” for your trading account. Given the sheer number of them out there, I couldn’t possibly compile the kind of data necessary to make such a claim.
That said, what is good for your trading account this week and what is good for your trading career are two very different things. So while a service that provides decent trade setups may make you a few pips in the short-term, it will never get you to the level you need to become a truly profitable, self-sufficient Forex trader.
With that in mind, let’s move on…
First things first, if you are just starting out, it’s important to learn the basics of Forex trading. The good news is that there is a plethora of free information available on the internet to get you started.
The bad news is that for every accurate piece of content available, there are likely three inaccurate ones.
However, you’re in luck because if you just want to learn the basics of Forex trading, there is one source of good content that you can rely on. My personal favorite is the Forex trading school over at babypips.com.
You should also check out my Forex beginner’s section for more.
If you are someone looking for more advanced material, as I know many of you are, there is also a ton of information available online.
Unfortunately, however, I cannot recommend any of it.
Why?
Because I simply don’t believe in any of it enough to give it an endorsement. Yes, I have my own site with my own services. But even if that did not exist, I still wouldn’t be able to stand behind a recommendation to any other site or resource.
Since 2007, I have spent the better part of my life developing what has become a very profitable style of trading. It is something I believe in wholeheartedly, which is exactly why I started Daily Price Action.
That said, I will be the first one to tell you that my own course and community isn’t for everyone. As I have said many times, in order to become successful as a trader you have to find a way of trading that works for you.
Maybe you find that with my site, maybe you don’t. What is important is that you find a style of trading and a mentor you can believe in, with the ultimate goal being to develop a level of confidence that will allow you to succeed.
Final Words
While joining a Forex signal service may seem like the ideal way to make a few pips, the truth is that it won’t do you much good. Sure, you may get lucky and find a service that provides decent signals, which may help you make a few pips here and there. But you won’t be any closer to your goal of becoming a successful Forex trader.
Truth is, if you are serious about making it in this business and becoming self-sufficient, you have to put in the time and effort. There are no shortcuts.
My intent with this post was not to claim that all Forex signal services are “bad”. I’m sure there are a few out there that do actually provide decent setups.
However, what I am saying is that you should not expect to become a stay-at-home Forex trader by using one of these services. If you truly want to become a professional trader, you have to put in the sweat equity; there are no two ways about it.
Frequently Asked Questions
What is a Forex signal service?
A Forex signal service is a service that provides buy and sell trade ideas (signals) to its subscribers for a fee.
Are Forex signals reliable?
Most often, the answer is no. Think about it this way: if most signal services made their subscribers consistent returns, why wouldn’t everyone join instead of learning how to trade?
Are trading signals worth it?
I think it’s far better to teach yourself how to trade. Sure, you might be able to make some money from trading signals, but how long will that last? By spending time and effort teaching yourself how to trade, you stand a much better chance of enjoying a lifetime of profits.
Your Turn
Do you agree or disagree? Use the comments section below to ask a question or leave some feedback.