How to trade Signals and Alerts
- Ronald van Rensburg
- Sep 6, 2022
- 2 min read
Recently I have seen and heard a lot about how inaccurate the weather forecasts are. One day it would rain and was said it would not, or it would be clear skies when rain was predicted. However people do not understand how a weather forecast works and the probability of the forecast. Similarly this is how signals and alerts work and I always recommend staying away from them.
What is trading signals? Many people that trade themselves would post their trades onto social media or telegram, or similar channels, which you either have access to for free or pay to gain access. People would then have the opportunity to decide if they want to replicate these trades onto their own account. Some brokers have this as a trading solution called copy trading where you can automatically copy other traders.
The problem is that the trade setup is specific to the signal provider's trading account in terms of leverage, equity, execution, and time frame which your trading account will not be replicating and most likely the trade ends badly for the copier but well for the signal provider. Also the trading strategy employed by the signal provider might also not be suited to you and will cause more stress than provide you with successful trades.
I always recommend that if you do want to trade signals then you need to do your own thorough analysis on a signal to ensure the viability of the setup and if the information backs the trade. Always do your fundamentals and technicals to ensure that what is told or given to you is correct and your not just trading signals from people that do not know what they are doing.
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