Prices for Forex Signals - The Result of the Competition or the Crisis of the Industry?
Plenty of sites on the Internet offer foreign exchange signals, forecasts, and trading systems and methods, however at ridiculous prices that would cause doubt even in a novice in the business. Indeed, the prices of the forex trading signals, from the majority of Internet resources fluctuate, on average, from 100-300 U.S. dollars a month with occasional pricing as high as 400-500 USD. Some “gurus” even offer their "trading secrets" for as much as 50-100 U.S. dollars, promising a monthly income of 100-200%.
What do most of the forex signal providers offer for 100-300 USD per month? They promise a potential profit expressed in points or pips, which a trader can get by following their instructions. Usually, they post in the performance data a profit of 300-1500 pips per month. Theoretically, if you have 5,000 USD, you can make from $3-15,000 per month by operating one standard contract (lot). That is no less than becoming a millionaire in a short time!
Can trading signals really bring 500-1500 pips per month? They can. However, they cannot do so every month, and not 1,500 pips. At the maximum, trading signals will bring 300-500 pips. The cost of such signals would not be 100-300 U.S. dollars a month. Most importantly, just as there are few world chess champions, there are few companies that can deliver such signals. People who can develop a system that allows for consistently making 300 pips per month are few and far between.
From where did those countless forex signal providers and their symbolic offers come? Maybe there is a refuge of geniuses and benefactors who have discovered the secret of successful prediction who can afford to give advice for a minimum price for the maximum number of people. After all, having a successful trading system to increase the number of clients simultaneously reduces the price for trading signals and thus can be more competitive. There is one big BUT... One can only compete among equals. It is an axiom that only a few successful trading systems can exist. Therefore, we can only discuss the worst among the worst competition. In today's market of forex signal providers, the vast majority consists of bankrupt traders who understand that giving advice is more profitable than trading all alone.
Next, consider the consumers of the forex signals. In large part, they are small traders with capital of up to 10,000 (mostly 1000-3000) U.S. dollars. Their demand for cheaper services accounts for almost all the industry of forex signals and forecasts and their dumping prices. In principle, consumers and providers of the forex signals cost each other. Most of the forex advice comes from cynics (more likely crooks) or advisors sincerely misguided in their pseudoscientific pursuits. There is less to be said for their clients, who are confident that they have the right to expect at least a doubling of their "capital" for a couple of hundred dollars per month.
And the main question: "How much do the forex signals actually cost?" Whatever the exact amount, it is expensive. Trading signals are the derivatives of a trading system, which is rarely the merchandise. In the case of a really successful trading system, the market only determines a very small degree of the value of the trading signals and forecasts. The seller sets the value to a greater extent by the effectiveness of his system, time, and means spent. One should add that the developer of a successful trading system does not actually need customers, which undoubtedly also adds to the cost of the trading signals. Without going into the complexity of marketing, it is absolutely clear that a developer of a successful trading system WILL NOT sell signals by the price proposed by the majority of today's forex signal providers. Moreover, the developer of a successful trading system will inevitably raise signal prices gradually and eventually turn them into elite services, which is what they are. It is rare enough when one customer has a deposit of $10,000, another $100,000, and both purchase trading signals for the same price.
Even a shallow analysis of the Internet today reveals the industry of forex signals as a fake, frivolous, and flawed business. The absurdly low prices and style of presentation of the forex signals sites promotes this impression. This is unfortunate, because the development of a really successful trading system is on the brink of possibility. In principle, if a successful trading system is compared to a cash machine, then trading signals would be like money, or rather, the bills.
We have been dealing with this business for over fifteen years. With today’s sate of the market on the Internet, a fair minimum price for trading signals should be between $15-20/pip.