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Yes, Give it to me

Forex Signals Provider: This is What They Hope You Never Find Out 

 September 6, 2018

By  Rayner

Do you want a Forex signal provider that gives accurate calls regularly?

Imagine:

You can rely on their signals and generate consistent profits every month.

And it won’t be long before you can quit your job and have your FREEDOM — no boss, no politics, and no stress.

And best of all…

No money worries because your Forex signal is doing all the “work” for you.

Now, how great would that be?

Awesome!

But…

There’s always a BUT, right?

It’s only a fantasy (I’ll explain why later).

For now, you might be wondering…

“What’s a Forex signals provider and how does it work?”

A Forex signals provider gives buy & sell “calls” so the user can generate profits from the market.

And you’re charged a monthly fee for this service (whether you make money or not).

Still, you might consider it when you see profits like this…

Forex Signals

You’re thinking:

“This makes sense as I’m getting signals from a professional trader. So all I need to do is follow his trades and I’ll be successful like him.”

Wrong!

Let me explain why…

You won’t have the confidence to trade the Forex signals

Here’s the deal:

You’ve no idea how your Forex signals are generated.

It can be a “professional” trader giving out discretionary buy/sell calls, or a “black box” programmed to spit out buy/sell signals.

And this is a problem because…

When the drawdown comes (and it definitely will), you’ll lose the confidence to stick to the trading strategy.

You’ll have thoughts like…

“What’s going on?”

“Did the trading strategy stopped working?”

“Do I still follow the strategy after the last 5 losses?”

Know what I mean?

So here’s my point…

If you don’t know how a trading strategy works, or WHY it works — you’ll never have the confidence to trade it.

You won’t make money even if the Forex signals are “working”, here’s why…

Let’s get real.

Most Forex signals provider charge about $100/month (or more) for their service.

So imagine:

  1. You have a $3000 Forex trading account
  2. You pay $100/month for Forex signals

This means at the end of the year, you need a return of 40% to break even.

And it gets worse.

Because with a $2000 account, you need a return of 60% to break even.

And with a $1000 account, you need a return of 120% to break even.

Ouch.

You’re better off gambling at the casinos; at least you have free booze.

Free Forex signals is a LIE

You’ve probably come across “traders” giving free Forex signals.

But is it really free?

Nope. It’s a lie and here’s why…

Yes, you don’t have to pay a monthly subscription fee but…

You’ll have to sign up at a brokerage of their choice.

Do you wonder why?

It’s because they’ll earn a “commission” every time you place a trade with them.

This means:

  1. The more you trade
  2. The higher your transactions costs
  3. The more they profit from you

Clearly, there’s a conflict of interest here.

So be aware of this marketing gimmick because there’s no such thing as free Forex signals.

The markets are always changing

Here’s a fact…

The markets are always changing. It moves from trend to range, low volatility to high volatility, downtrend to uptrend, etc.

This means your Forex signals might work for now.

But what if the markets change?

Will the signal still work?

Or will it go bust?

You’ll never know.

And that’s why I said…

If you don’t know how or why a trading strategy works, you’ll have no confidence to trade it — especially in ever-changing market conditions.

Right now:

You’ve realized that most signal service is junk.

But, if you still want to subscribe to one, then here’s what you must do…

Put the odds in your favor, here’s how…

Recall:

I said with a $3000 account, you need 40% a year to break even.

However, if you increase your account size, you reduce the returns needed to be break-even.

For example:

  1. You have a $30,000 trading account
  2. You pay $100/month for Forex signals

This means you need a return of 4% per year to break even.

And if you have a $100,000 account, you need only 1% per year to break even.

See the difference?

However, you might not have a large trading capital.

So, what now?

Well, what you can do is opt for a profit-sharing scheme.

Here’s an example:

If you have a 30–70 profit-sharing scheme, you’ll pay 30% of your profits to your signal provider and keep the remaining 70%.

If there’s no profit, you pay nothing.

Do you want to grow your trading account steadily? Then you must have this one thing…

Forex Signals

Here’s the deal:

You can find a profitable Forex signal provider.

You can have the appropriate account size.

But without proper risk management, you’ll still lose.

And this is something your Forex signal provider can’t help you with.

Let me share an example…

There are two traders, John and Sally.

John is an aggressive trader, and he risks 25% of his account on each trade.

Sally is a conservative trader, and she risks 1% of her account on each trade.

Both receive profitable Forex signals that win 50% of the time with an average of 1:2 risk to reward.

Over the next 8 trades, the outcomes are Lose Lose Lose Lose Win Win Win Win.

Here’s the outcome for John:

-25% -25% -25% – 25% = BLOW UP

Here’s the outcome for Sally:

-1% -1% -1% -1% +2% +2% +2% +2% = +4%

Do you see my point?

So as a guideline, you don’t want to lose over 1% of your trading capital on each trade.

This means if you have a $10,000 trading account, your maximum loss per trade shouldn’t be more than $100 (1% of 10,000).

If you want to how to do it, go read The Complete Guide to Risk Management and Position Sizing.

Why you must know the trading strategy inside out

Let’s take Trend Following for an example…

How does it work?

  1. You trade breakouts across many markets
  2. Those breakouts that fail, you cut your losses
  3. Those breakouts that trend, you ride your winners

And WHY does it work?

Because of fear and greed in the markets.

In times of greed, traders keep buying and it pushes the price higher.

In times of fear (or Recession), traders keep selling to stop “the pain”.

So, as a Trend Follower, you can take advantage of this phenomenon as you buy high and sell higher (and vice versa).

Does this work all the time?

Of course not!

Which brings me to my next point…

A simple test to tell whether your Forex signal provider is legit (hint: 99% of them will fail this test)

Forex Signals

One year of trading results isn’t enough to prove that your trading strategy works.

Because market conditions change.

For example:

In 2017, Bitcoin traders were “killing” it as the market was in a strong uptrend.

You could buy and close two eyes and still make money at the end of the month.

But in 2018, things changed drastically.

The price of Bitcoin collapsed 60%, and many traders blew up their account.

Now here’s the thing…

These traders were using the same trading strategy.

In 2017 they made huge profits, but in 2018 they lost everything.

Why?

Because market conditions change.

So…

If you want to know whether a trading strategy will work, you must verify the results over the last 5 years and take into account one major recession.

For example:

A backtest period of 2007 to 2011 is good because it has 5 years of results that includes the 2008 financial crisis.

So, before you sign up for a Forex signal service, make sure they can pass this test.

Frequently asked questions

#1: Do you consider offering Forex signal service which I can follow?

No, I don’t offer Forex signal service. I’d rather teach you how to fish (and you’ll be able to fish for a lifetime) than to simply give you the fish.

#2: Which Forex broker do you use?

I don’t wish to publicise and disclose which brokers to use over here, but if you want more information, you can just reach out to support(at)tradingwithrayner(dot)com and I’ll be glad to give you some recommendations.

#3: If the Forex signal services are provided by professionals, wouldn’t they adapt to the change in market condition?

Yes, that’s possible. If a signal service is given by a professional trader, then the signal could possibly adapt to changing market conditions. But so far, I haven’t come across any who survives in the long run.

Conclusion

Here’s what you’ve learned today:

  • If you don’t know how a Forex signal is generated, you won’t have the confidence to trade it when the drawdown comes
  • It doesn’t make sense to use a Forex signal service if your account size is small
  • Forex signal usually stops working when market conditions change

And if you want to subscribe to a Forex signal provider:

  1. Have a decent account size
  2. Adopt proper risk management
  3. Understand the trading strategy used
  4. Know how the strategy performs over the last 10 years

Now here’s a question for you…

Do you use a Forex signal service and did it work for you?

Leave a comment below and share your thoughts with me.

  • This post was informative. I have felt victim to many signal providers with free signals which are not really free as you said.

    Now I never use signals I trend and trust myself more. Thanx for the information.

  • I pay 100usd for life time services, but the signal its hit SL more than TP. Then alway show the good result for u and let u join them. Its like scam too.

    I wish Rayner can provide signal service for us. TQ

  • What about copy trade? There’s many offers in MT4 site with a flat fee of 30USD and you can see by their past and recent performance and when it look realiable, what will be the down side?

    • I don’t publicly discuss brokers because in this day and age, we have no idea what goes on behind the scenes.

      If you want a recommendation, drop me an email me and we can discuss it.

  • Thanks Rayner.

    I personally would never use such a service.

    Once you have learnt the skill of trading it’s with you for life and you only then have to trust yourself when making decisions. It’s a tough profession that most newbies like myself under estimate i.e “let’s get rich quick”

    You get out of life what your willing to put in.

    I have been trading for circa 6 months and I am still not profitable and it’s not down to the lack of effort as I have put my heart and sole into learning this new skill. The 3 areas I have been weak at and am currently working on are ‘patience’, ‘discipline’ and money management, if you nail these 3 important fundamentals you have at least a fighting chance of success.

    I’ve waffled on long enough but am sure you get the jist of what I’m trying to put across.

  • Hmmm…I’m quite confused. If the one giving the signals are professional traders, then there’s no need to study what trading strategy they use and even if the condition of the market do change, wouldn’t the professional trader just adapt to the change in condition?

  • Dear Rayner, most of your previous recommendations were right, so this one must also be right. I feel guilty earning money on others’ signals. Reading your article, I have stopped looking for free or paid signals. Please keep on teaching supporting software to make trading comfortable. Regards.

  • Hello Rayner,
    I would like to thank you personally for all the personal time you take to share all this great stuff with us.
    I have used many free and paid signals and made money.
    The most important thing is to learn forex diligently, know at least two good and profitable trading strategies which you can get from “tradingwithrayner”.
    With the knowledge and experience strategies you have acquired it is easy to filter and make your own analysis of the signals you receive rather than just trading all of them and losing money on the bad signals.
    Rayner, I would proudly like to say that with all that I have learnt from “tradingwithrayner” both from this site and your “Youtube channel” you are great and experienced trader and if you ever start a paid forex signal service, I would be very happy to subscribe.
    Remain Blessed

  • Do not ask for free service without doing anything better to thank for what you have received and ask how you can learn and search more . If you think money can make you a good learner by buying something it’s wrong for my opinion ! End i will say dat becouse if (x y z) leave or it’s time to quit you lose every thing you didn’t learn yet 🙂 becouse you think your money can buy everyoane work
    Right Rayner?

  • I suspect the posting of solid trading results of traders who tout their signal services, is because they trade both side. That’s how they generate fantastic trading results.

  • I’ve bought signals from two providers. The first one scammed me hard. We kept losing money on every trade. I even felt like switching the SL & TP because his trades always hit the SL.

    The second guy was good and consistent. He gave us(subscribers) risk management plans and an analysis. His trades were very consistent and you’d be tempted to increase your risk at times but thankfully I was too experienced to risk all. It all went down south during the 3rd week. I had almost doubled my account within the end of the 2nd week with good risk management but we started taking L’s.

    It was really disappointing but I understood that its how the game works. I never blamed the trader, he’s really good, I examined him for a full 3months before purchasing the subscription. I noticed he had a bad week every 6 weeks but unfortunately I couldn’t duck the bad week.

    “Defeat is temporary”

    Im still searching for a signal provider because I see it as another stream of income. Thanks for the article Rayner and thank you for being unbiased towards Forex signals

  • So in this case why don’t you guys find a better trading school to sign up to and learn how to trade well and also understand the market well, than trading with other people’s signal whiles you don’t even know proper risk management. And lastly what if the signal is good and it works great and one day the signal provider is no more, what do you think it will happen to your trading life.

  • my friend is charge 4000 usd for signal fee, the acct shows an live account 38000 usd. forex page sent by his broker which trade for more than a week. is this legit.

  • My trading company asked me, yesterday, to buy signal for $1500. $1500!!!. Made a $450 deposit into my trading account and made…$4900 two days later. $4900!!!
    To be withdrawn, and of course, after I complete signal purchase.
    Preach.

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