Is it possible to make a living at a full-time career out of following someone else's signals? So what an interesting topic this is. Can you make a living by following someone else's trade signals. Very important. Certainly for us anyway because we work for forexsignals.com. Joking aside, it is a valid question. And I think it needs no further analysis. My experience over the last... you know 20 years or so trading the trading the screens. I've seen a lot of people come into this business, trying to give up their day job. Thinking they're going to be a trader. This is their road to riches. It's a get-rich-quick scheme, okay? They don't like their current jobs and they think they're going to be you know just switching on the screens and making a living. People are looking quite often for the easy way out.
And this approach has really led to a real growth industry in the forex signal service business. Basically, what a forex signal service is, is exactly what it says on the tin. You know you pay a subscription. A monthly or annual subscription or whatever payment plan you have with the provider. And that provider will send you a signal to your email, to your smartphone or what have you. And that will be a buy or sell with stop loss levels, take profit target levels might even have some risk management in there as well. So what a signal service will do? Send you the signal you as a trader will take the signal and off you go. You try and make money. You've read on the tin that this strategy makes twenty percent in the course of the year, so you think that is great. Well, I thought sure--- I don't think it's a really as easy as that.
And I think you need to put some more analysis into the civil service, and we'll talk about that a bit more in in a moment. But there are certain advantages. Am I following a signal service and the first advantage is: Learning to trade itself is not an easy task. Is not something that you can do overnight. Not something you can pick up a book, read the book and then you become a trader .It takes time. A lot of time. I've been trading for thirty years, twenty years really on the screens. Takes a lot of time and a lot of screen practice.
And that caring love bullets. So for your signal service having faith in someone else to make those decisions for you can be a huge advantage. Now, let's assume that strategy you're using or that the provider is using has been that tested. It's got a good track record. Presumably, they've done their back testing. That testing is an incredibly boring task. It has to be done. You need to know how the strategy performs. So if you want to follow a signal service, you've got to assume that that provider has done all that back testing for you.
He's taken all that hard work out for you. So there you have a strategy. Honest back testing. It's got a great return on investment, off you go with it. Well quite frankly, here is where I think the double-edged sword is. It's not quite as simple as that. When you follow a signal service You basically... shifting the responsibility onto someone else. And it's very easy when you shift the responsibility onto someone else to blame someone else when that strategy goes wrong. Then you start losing, okay? That's a lot of the reasons why people do it. They don't want to take some responsibility. But I think to use a signal service in the most effective way, you've got to take some responsibility. Okay, you've got to understand what's going on behind the strategy. So you've got to understand the characteristics of that strategy.
How it informs in volatile periods. What the maximum drawdown is. What the maximum number of consecutive losses will be. What's the maximum number or potential gainers you're likely to see as well. It's only really have their the information. That you're able to have more trust in the actual signal service itself. Very easy to throw out a signal service because you've had fire losing trades. Then you move on to the next signal service. And then the next one and the next one and the whole cycle repeats itself.
So you need to do some further analysis into the signal so that you've got confidence to stick with the strategy indeed when it does have those drawdown pillars. You need to know what is going on behind the scenes behind that signal. Now the other thing I think I want to talk about is the risk management. Risk management is crucial when you're trading. A lot of these signal services that you see they don't really include the risk management. The big picture. They might say only risk 1% on the trade, but they're not looking at the big picture in terms of your trading plan. Where you want to be in a month's time, six months time, a year's time, in two years time. This just basically a quick profit and that's what they're basing themselves on. To become a successful living making a living out of trading, you've got to have a plan.
You've got to have a strategy in terms of risk to take you forward. A lot of these strategies these are similar services don't provide that for you. So what you need to do basically quite frankly, is follow a single service. But know what's going into it. What's the backbone behind it and the bigger picture. Psychology, risk management. Now here at forexsignals.com, we do exactly that. We provide signals of course. We also provide the education.
The education behind the strategy. We teach you why we're taking such trades. We teach you the thought process what's going on behind the strategy. We talk to you about how to back test. How to analyze a strategy. How to actually see if this is credible going forward. What's the expectancy. That basically means what you can expect from that strategy. How many losses you could potentially have on the bounce. How many potential winners you can have on the bounce. We also factor in the risk management as well. We look at that in a very serious matter It's so so important risk management, so we cover that as well. The other thing you need to look at is the psychology behind training. Psychology it's pretty much 70% of everything we do as traders. Even if you're following a signal service or even if you're trading yourself. Psychology is crucial. You can follow a signal service. Have some losing trades. You then start doubling up or you then start throwing it out and getting another strategy. All this is the psychology. Getting a signal service without that analysis can lead to danger.
So I think it's fair to say there is a work, there is a space for a signal service. But you've got to look into it in the big picture. You've got to look into it is as part of your trading plan. Sure it takes some hard work away, but you've got to put a little bit more work into it. Believe me, there's no signal service out there that you can plug in follow religiously to give up your day job.
But there's certainly a space for it. I hope this video was insightful. And if it was, give me a thumbs up. If it wasn't, give me a thumbs down. Of course always leave a comment below. We'd love to hear from you. Love read in the comments. I get back to as many as I can. Subscribe to the channel if you haven't already done so and of course you can follow us on Instagram. In which case you get to see all the work that goes on behind these videos. Thanks again for this thing and till the next video good luck! .
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