Should Newbies turn to signal providers rather than trading themselves?

Hi Guys,

I am about to start my live trading forex journey.Every thing was planned out untill I came to this site and found this thing called "Auto Trader" and "signal start service" all promising hugh % returns for my principal...

using my strategy and trading manually, I could at the most get 2% a month...but these traders claim far higher returns..

Question is should a new trader allocate small capital and "learn" to manage risk on that account and go for these signal providers or continue to hone their own strategy?

Any one experienced with these Bots are welcome to answer!

@sid4spd As a new trader you must learn to manage your own risks in the account, only this is how a trader is able to develop his own strategy. However, turning to signal providers will help you get started with trading. The real time is violent, you can have the support of some signal providers and in turn work to develop your own strategy.
So when you grow into Forex you will have security in the trade you are doing.

That is, the supplier will signal as a support point, but you do not put full confidence in it because you need to do your own strategy and do Auto trader.

thanks Yersonov.

I was planning to start my own trading with tight risk management and was trying to see if I could incorporate signal providers or autotrade in another smaller account with tight risk management ...but the thrill of getting hugh gains as stated by these systems was tempting....

...will not put all eggs in one basket!

start by learning

Try signal with demo - it helps a lot.
I'm also in jorney to find the ONE robot in the world full of scamm..

sid4spd posted:
Hi Guys,

I am about to start my live trading forex journey.Every thing was planned out untill I came to this site and found this thing called "Auto Trader" and "signal start service" all promising hugh % returns for my principal...

using my strategy and trading manually, I could at the most get 2% a month...but these traders claim far higher returns..

Question is should a new trader allocate small capital and "learn" to manage risk on that account and go for these signal providers or continue to hone their own strategy?

Any one experienced with these Bots are welcome to answer!

You must start your trade so you do not expect to do Forex. And minimize the risks of your live account using programmers in a demo account. As you become practical in it.

@sid4spd I meant signals.

Surely it is necessary to distinguish your main goal. If you came to forex to get rich by any possible means then you can subscribe to a provider if you find any decent one. Even straight away. But in this case, newbie will remain newbie for good. If you want to turn from newbie into professional, then it is vitally to trade yourself.

Xiantero posted:
Surely it is necessary to distinguish your main goal. If you came to forex to get rich by any possible means then you can subscribe to a provider if you find any decent one. Even straight away. But in this case, newbie will remain newbie for good. If you want to turn from newbie into professional, then it is vitally to trade yourself.

Well said, Xiantero!

I would also add:

just curious, if they can make a lot of $$$ from their signals, why they sell signals to other people to get money?

irwanwd posted:
just curious, if they can make a lot of $$$ from their signals, why they sell signals to other people to get money?

Either because their signals are trash and that's actually how they make money or they make enough money from good trading and provide signals as an additional income.

Also note the cost of the signals are not proportionate to how good they are, there are excellent traders out there that provide free signals as a philanthropic alternative to giving away money, others will provide very low cost signals to boost their capital, but signals are not the core model of their income, trading or fund management is.

An ideal signal provider should have investments, trading or portfolio management (fund management) as part of their repertoire, I would be skeptical of any signal provider that only provides a signal service and nothing else.

Most signals don't survive more than a year without crippling drawdowns for TWO main reasons:

1. If traded MANUALLY, the psychological pressure on the trader will take his/her good judgement away when knowing how many followers he/she has and how much funds are at risk. And as we all know (well, male traders at least...) ""performance anxiety"" is counter-productive. For manual traders to be able to handle emotions (i.e. greed and fear) is as important as the strategy itself WHEN HANDLING LARGE ACCOUNTS and/or TRADING FOR INVESTORS. (Personally I cannot handle these emotions above $10k at risk. I have realized it early and moved to algorithmic trading. I have never looked back.)

2. In case of EAs the problem is that most EAs are NOT ROBUST, meaning that they perform well ONLY in certain market conditions. Since market conditions change ALL THE TIME and which conditions may have HUNDREDS of MANIFESTATIONS, most EAs simply cannot keep up with these ever changing conditions and fail. ""Continuous optimization"" may sound like a solution to this problem, however, by the time an algorithm can identify a new market condition, probably it is too late as market conditions can change very fast. In other words: there is a significant LAG and eventually the never ending EA optimization may resemble to dog chasing its own tail...

You may ask, what about those strategies which survive more than a year or two without crippling drawdowns...?

Well, probably you will not see too many of such, because they quickly disappear from MyFxBook to be run for a small circle of private investors and/or sold to hedge funds.

But just in case IF you found one on MyFxBook it is probably:

1. A ""time-bomb" grid and Martingale strategy, just not exploded yet.

2. Scam broker's collusion with a ""third-party"" miracle signal provider (usually the same entity) who can provide the signals ONLY for accounts running at the scam broker. These are typical Ponzi schemes usually ending by "miracle signal provider" crashing all client accounts due to a technical issue within hours, then "falling off Earth" with or without an ""apology letter""... The scam broker is also ""sorry"", but legally it is not responsible. Then ""rinse and repeat""...

Should you find any non-grid, non-Martingale commercial strategy (i.e. signal) on MyFxBook with more than 1 year and at least +5% monthly profit with less than -25% DD running at a well-known (ASIC/FCA regulated) broker on a verified account, please post it here...

P.S. You may find a few verified, ASIC/FCA broker accounts in my profile running EAs for the past 4-6 months, but I guarantee that you will not find them there in a year... For one of the reasons mentioned above...

Being a newbie I will always suggest you to start with small real account and learn to manage your own risks into the account. Signal providers are also good they simplify your trading by providing you signals, and in the beginning these are helpful to the traders. Or you can open two accounts simultaneously and use EA’s in one account and do manual trading with small amount in other and test the trading results.

The simple answer is No.

Taking signal providers trades is not a way of developing your own strategy or adjusting another known strategy.

How do you know if the signal is valid ? Is the signal provider a trader also ? Can you easily check their claims of success ? Broker Statements can be made to look good and hide the relevant truth. Anything on MyFXBook is at least verifiable with traders registering the accounts they hold.

Think of them like horse racing tipsters who set up a premium line or service quote all the horses in the race as in dividing who they select as a group of subscribers get one name and another group another name. They will crow on that they got it right but only to the group that they gave the winning tip. They have taken your money and laughed all the way to their beach house.

Forex Signal providers only have 3 choices (a) Buy (b) Sell or (c) Neutral and do not trade. They too have your hard earned cash and do not really care whether you have traded the commodity, forex, stock, currency or index.

Hello,
I believe the topic concerns two different points:
* they will be newbies in the beginning and after certain period of time they will have experience
* signal providers - there are people that just want to have diversification in their portfolio. They trade themselves and also have allocated part of their funds under someone's management. Is it good particular signal provider or how to find a good and reliable provider - this is another question :)

Bottom line - this is just a meter of decision taking :)

Best to stay away from signal providers, the whole point of being a Trader is using your own mind not someone else's.

I think if the signal provider is highly reliable you can have it, and you should get the most out of it.

Just getting back into the FX business after a long time off. I must say KUDOS to everyone whom replied. All of your advice was keen and spot on. The new trader asked one of the most excellent questions I have heard in a long time. Because it shows that he has the ability to drop his ego and ask questions and expose himself to the resources available to him in this forum and elsewhere. Like the trader above stated "Don't put all your eggs in one Basket". My advice is to diversify your portfolio. If you have the capital available to have a separate portfolio which you can utilize a good autotrader that is profitable then use it. I prefer a signal or copy service that integrates manual and bots or some combination of other tools to be in profit. Also you should use a service which is verified as well one that has been consistent in in profitability since the inception of the signal and has verifiable results. Along with that being said when your account is in profit, always reduce your risking by taking some profit off the table 10-20% of the gross gain and put 3-5% in some short term and long term interest bearing account which will do two things: create a secondary form of passive income and also give you a 2nd and 3rd etc... stream of income and a back up account as it is growing for you once you have a strategy that is profitable to create multiple accounts and thereby trade more to increase your profit. I also believe at the early stages of your trading business that you only risk 3% of your capital on all trades. and set your stops accordingly in order to have maximum upside profit and less draw down on your manually traded account. There is so much that can be said regarding this topic. I digress and back to the original question? My answer if you choose an auto trader use a demo account if possible to test the EA; backtest if able and learn but do not allow yourself to get stuck in a cycle of over analysis; information overload, shiny object syndrome(subscribing and buying a whole bunch of hyped up products that say they will help you make a lot of money"; If that were the case everyone would be wealthy