Education: Why you should NOT buy or trade signals!

24 ก.พ. 2021

"Give a Man a Fish, and You Feed Him for a Day. Teach a Man To Fish, and You Feed Him for a Lifetime" - unknown origin*




🔴What does this quote mean, and how does it related to trading (signals)?
The quote means that you can indeed resolve an issue by providing a hungry man a fish, serving his immediate need, but if you really want to help him you should teach him to become self-sufficient.
Similarly, while providing a signal, you can provide the signal to a winning trade to someone, but if you really want to help him, you teach him how to analyze the market and become self-sufficient in trading.



🔴DISCLAIMER
This post will probably get some backlash from users who provide signals, be it paid or not, because it goes against their "business model" and might reduce their revenues in one way or the other. But that is fine by me, this is my personal opinion, and I advise every single reader of this publication to draw his own conclusions.



🔴What are trading signals?
Trading signals at a minimum constitute of an entry price and a direction. Example : buy GOLD at 1825 USD.
Some (but not all) signal providers also give you a Profit Target and/or a Stop Loss. They give you actionable information on where to open a trade, which direction you should trade and sometimes when you should close the trade.



🔴That's easy! Nothing wrong with that, it can make me money, right! Right???
Yes, it can, you are absolutely right that you can make money off a trading signal.
However, there are a couple of questions that you need to ask yourself :

How many trades, what percentage, can you expect to win?
If not provided, where should you take profit or cut your losses?
What is the reason for entering the trade?
What confidence do you have in the trade if you're just following someone elses instructions?
What if you lose 10 trades in a row, was this expected?
Who is responsible for your losses? You, or the signal provider?
What do you learn from trading signals?
What are the emotions you have to go through during the trade?
What if your signal provider stops?

🤔 Additionally the question arises why the signals are provided.
Is it altruism? Or is it conceivable that the provider does not make enough by trading and wants to top-up his gains(?) by selling signals. Income from trading is not guaranteed, when you sell signal you make your profit the moment the transaction takes place, independent of the outcome of the trade. That's guaranteed 💰.
And yes, people will be unhappy and no longer order the providers' services, but there are always new "potential buyers" coming to the financial markets.

💡 "Trading signals does not guarantee your income, it guarantees the signal providers' income."




🔴OK, fair enough, but what should I do if I don't know how to trade?
Allow me to be blunt here, if you don't know how to trade, you should either learn how to trade, either keep your money in your pockets.

Ask yourself why you want to trade? What is the end goal?
► If you say that you just want to make some extra money, then taking up a 2nd job is a much more reliable source of income than throwing your money at the markets based on something someone else said, don't you agree?
Other than that, as said earlier, if you depend on a signal provider, that income (if any) will disappear the moment the signals do.
► If you want to become a trader, become financially independent, get rid of your daytime job, get out of that hamster wheel, I strongly suggest you invest the time and effort to learn how to trade for yourself.



🔴MY ADVICE
Don't be lazy
Don't trade signals and
Learn how to trade
Hustle
Grind
Fail
Learn from your mistakes
Fail again
Don't give up
Don't expect to become rich overnight
Keep learning
Do your own research and analysis
Rinse and repeat until you succeed....
That, imho is the only way you will achieve the financial goals you have set for yourself and feel good about it...



So, let's take our initial proverb and give it a trader twist:
👉🏻👉🏻👉🏻 "Give a Man a Signal, and You Could Feed Him for a Day. Teach a Man To Trade, and You Feed Him for a Lifetime" - Nico Muselle

💥The decision is all yours, if you want it bad enough, you can do it!💥

🔴Useful information
This TradingView article gives you some additional information on the things you shouldn't do ... Give it a read before you hand out your hard earned money.
tradingview.com/support/solutions/43000570848-5-things-you-should-never-do-on-tradingview/

Do you agree? What is your view on signals?
Let's open the discussion in the comments below ...

✌🏻 PEACE OUT

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