You can’t scroll for 2 minutes on social media now without seeing forex signal sellers advertising huge profits from signing up to their groups. It seems like a no-brainer, right? Getting hugely profitable traders sent right to your phone, just to copy and paste into MetaTrader. Just like that, you’re a forex trader! But is it actually that simple?
Forex signal groups are a scam, ran by marketers that failed at forex trading. They are completely unprofitable and the ‘experienced trader’ running the signal service only cares about your referral bonus and signup fee. If you could copy and paste your way to wealth, everyone would be wealthy, right?
What Are Forex Signal Groups?
Forex signal groups are usually on either WhatsApp, Telegram or just via SMS. They have been around for the last few years and have plagued the industry, primarily brand new forex traders. Signal groups are usually ran by an ‘experienced trader’ who will send out a bunch of random trades to the group members. It’ll look very similar to this:
AUDUSD Long. SL 50 Pips. TP 200 Pips. Price – Market.
In this signal, the trader is being told to buy AUDUSD at the current market price, with a 50 pip stop loss and a 200 pip take profit.
Depending on the signal group that you’re a part of, trades like this could come multiple times per day, or even weekly. Some forex signal groups are completely free, which we will touch on later in this article. On the other hand, some groups are very expensive and you can be paying up to £200 per month to receive these trading alerts.
Why You Shouldn’t Use Forex Signals
There are multiple reasons why relying on forex signals is a terrible idea. Here are some of the main reasons why you should never use signals:
Signal Sellers Have No Fixed Trading Strategy
Signal groups send out random trades, typically across multiple timeframes. This means that there’s no strategy behind the signal group – it’ll be completely random when trades are sent out. Even experienced traders can’t predict when a trade will come, so the traders sending out these signals are simply copying random charts that they see.
Signal Sellers Cannot Gauge Your Account Balance
What if you’re trading a small account? If you’re just starting out and actually need to make money, it doesn’t really matter where price is at at this moment. What matters is making sure that you’re trading with decent risk management rules. If you have a £1,000 account and are trading for 50 pips at a time, you can’t simply lose half your account in one shot.
Even still, with a £1000 account, if you were sent a buy signal on XAUUSD, with a 200 pip stop loss, you’re going to lose a HUGE amount of your account even with a 0.01. This is one of the biggest reasons why using forex signals is an awful idea.
There Are No Profitable Forex Signal Sellers
You’ll never make money trading forex signals. Signal groups are made for brand new traders to get scammed. These sellers never actually take trades themselves – they make their money selling you signals! You’d need to see a verified MyFxBook track record of 6+ months before even taking the chance.
I promise you that no one has ever made money following trading signals. Think about it… You think that you can make millions, or thousands of dollars per day just by copy and pasting the work of someone you found on Instagram?
No! There’s no such thing as a profitable signal group. Not one person has ever made money trading forex signals – it just doesn’t happen!
I was scammed multiple times by the top UK forex signal groups when I first started trying to learn forex many years ago.
You Won’t Learn To Trade Properly
Most people get into forex as they want to make more money and become self sufficient. With that in mind, you cannot achieve this by blindly following someone else’s trades.
If you want to learn how to trade, follow a course. If you just blindly follow signals from a random trader, you’ll quickly get burned out and be back at square one with no idea of what forex trading can do for your life. This is why it’s so important to use free resources online – don’t get scammed by forex signal groups!
The concept of copy trading has been around for a while now. For those who are new to the idea, it means that you’re following other people’s trades – no matter what they are. Some traders won’t care about this concept as much as others, but in most cases, it’s just flat out stupid.
How Forex Signal Sellers Make Money
I’m telling you that forex signal sellers are not experienced traders, at all. They’re often unprofitable marketers who are looking to cash in on their subscriber numbers. So, how are these marketers making money from us?
The number one way that forex signal sellers are making money, is through charging you to be in their group. We’ll call this a subscription fee.
The price of these groups can range from £1 – £200 per month and it’s safe to say that I’ve seen every single price point in the past! Some people do speak of handsome ROIs (return on investment) but you should be very careful before signing up. Sure, they may be making £10k per month from the group, but how much of that money is made on trades? None!
The truth is that most signal groups don’t break even. The ‘owner’ might indeed be sending out daily signals to everyone subscribed, but they are on average losing more than they are winning. They are just trying to get as many people in the group as possible, so that they can get their subscription fees.
I’m sure you’ve seen ‘free’ signal groups, that allow members to join and start trading their signals without paying a penny. This is the smartest scam of them all.
If a signal group is free, they will ask you to sign up with their affiliated broker. Once you’ve done that, you’re by far more likely to open an account with the broker. These ‘free’ groups are usually partnered up with unregulated brokers who pay them per signup and deposit.
The group owners gets paid for each person they refer to the broker. So, instead of taking your £200 per month, they are making a quick £800 referral fee from the broker. If you’ve been burnt by a signal group before, I can almost guarantee it’s been from one of these ‘free’ groups.
Affiliate commissions for forex brokers go up to £800 a pop – so it’s easy to see how these unethical signal sellers and marketers are making a huge amount of money, without ever learning how to trade forex.
The Benefits Of Using Forex Signals
In terms of the benefits of using forex signals, there aren’t any. People that follow forex trading signals don’t make money, nor learn, nor really get any value out of the groups whatsoever.
Don’t join a forex signal group, they are not worth your time or money.
Forex trading is hard enough when you’re fully equipped to do it right. You need to be spending all day watching educational videos, reading online blogs and testing out strategies – not blindly following some teenagers analysis.
If you’re looking to start with forex trading, it’s important that you don’t join a signal group. They’re just flat out dumb and they will not help you become profitable quickly. If it was a case of copy and pasting trades to become a millionaire, no one would be working jobs – would they?
Do your own research and don’t blindly follow anyone else – especially if they seem like marketers or scammers!
In Summary – Should You Use Forex Signal Groups For Trades?
In conclusion, forex signal trades are a scam. The groups are setup by marketers that tried and failed at forex trading. If they’re able to show you their profits and fancy lifestyle, just remember that your subscription is funding that, not their trades .
Don’t fall for the tricks of marketers, just trade your own plan and you will become profitable. Don’t join free ‘forex signal groups’ as they’ll only refer you to unregulated brokers that pay them per deposit and sign up.
Learn forex trading on a solid platform like BabyPips where the costs are nothing but all the tools you need are provided, instead of just blindly following a teenager on Instagram until you blow your trading account.
Have you been scammed by a signal seller? Let me know!