Can you Recommend a (Forex) Alert Service?
LONG ANSWER
The Chinese Proverb
For the purposes of this FAQ, an alert service is an umbrella term that’s used to describe vendors who provide all manner of signals, tips and alerts about what to trade and when. They tend to be distinct from trading coaches and mentors who, generally speaking, teach people how to trade. The difference between the two camps is summed up well by the Chinese proverb: ‘Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for life’. By and large, vendors of alerts services tend not to want their subscribers to learn how to fish (trade) by themselves because, as soon as they can do that, they’ll no longer need an alerts service! If you’re interested in learning how to trade, then there are 2 sibling FAQs which might be of interest to you:
Can You Recommend a Mentor, Coach or Trading Course? and
How Can I Distinguish Between Scams and Reputable Vendors?
There is No ‘One Size Fits All’ Service
Although the original question is specific to the Forex market, the principles described here apply to all tradable markets. By its very nature, this curious niche of the trading industry changes on a daily basis and is populated by market professionals at one extreme and common crooks at the other. Because it’s such a volatile and fluid environment, any recommendations made here will be out of date in no time at all. Additionally, because the range of services is so wide, as is the spectrum of prospective customers who buy them, there isn’t really a ‘one size fits all’ service. Therefore, rather than making specific recommendations, this FAQ will endeavour to outline how members can set about finding the right service for them, tailored to fit their budget and personal circumstances.
From Macro to Micro – There’s a Service for Everyone
Alert services range from being quite vague and general market observations, through to very specific, detailed and unambiguous instructions. An example of the former might be a list of stocks in a weekly newsletter which, in the editor’s opinion, are set to sky rocket to the heavens or plummet to the ocean depths. No indication is given about how to trade them, i.e. where to enter trades, place stops or to take profits etc. At the other end of the spectrum is a mobile text message which reads:
‘Buy XYZ now at XXXX.00 or lower. Stop at YYYY.00, 1st profit target at ZZZZ.00’. A half way house service might be a daily e-mail before the market opens which reads:
‘XYZ is considered bullish if it breaks above XXXX.00 and bearish if it breaks below YYYY.00’. As with the equities newsletter, it’s then up to the subscriber to decide how best to use the information.
Finding the Right Service for You
Before embarking on your search for an alerts service, it’s worth giving some thought to the sort of service you want and will be able to take advantage of. If you’re in full time employment, a text message to
‘buy XYZ right now’ might not be suitable. It’s bound to come just as your boss calls you into his/her office for a meeting and you don’t have time to place your orders. Murphy’s Law dictates that the trades you miss are winners and the ones you catch are losers. The other factor to consider is your level of trading knowledge and experience. If you’re a complete novice and don’t know your bid from your ask, then a comprehensive ‘all singing, all dancing’ service might be the best option. On the other hand, if you have some trading experience, a more discretionary based service might suit you better.
Set & Forget
A popular route that is often seen as being the holy grail of alert services – regardless of your trading skills and personal circumstances – is the ‘set and forget’ service. Some of these will require you to place your own stop or limit orders, while others will include some software that plugs into your trading platform and does all the clever stuff for you. So, even when you’re having that meeting with your boss, or you’re asleep in the dead of night, you don’t have to worry about missing potentially profitable trades. Your computer is merrily toiling away, making the six figure salary from your day job look like beer money. Well, that’s the theory anyway!
Chat Rooms
Another popular type of alert service which has enjoyed huge growth in recent years is the live chat room. Courtesy of modern technology, you can be sitting in your study at home, while listening to a trading guru based on the other side of the world, offering their market insights and making live calls. Chat rooms offer some distinct advantages over most other types of alert services. Firstly, they’re live, so they’re difficult to beat when it comes to timely alerts! Secondly, they’re interactive, so you can ask questions and, thirdly, scam merchants tend to shy away from them as their lack of expertise would be quickly exposed by any knowledgeable customers in the room. Talking of scams . . .
SCAMS
The Nearest Thing to Legalised Fraud
Unfortunately, there are loads of unscrupulous vendors around, many of whom know next to nothing about trading. They can’t trade profitably for themselves or anyone else. Their skill, such as it is, is in selling dreams to the gullible. Most vendors aren’t regulated, so anyone can put up a website offering a signalling service for $99.00 per month – or whatever. It’s very tricky for law enforcement agencies to prosecute the rip-off merchants because their service is merely to provide the alert itself. If you pay a monthly subscription for a daily e-mail and you receive one, then the vendor has fulfilled their obligation to you and provided the service that they’re contracted to do. The fact that you lost money on every single alert that you traded is neither here nor there. Without doubt, for unscrupulous vendors, offering a trading alert service is tantamount to legalised fraud. Before parting with any money for such services, you need to proceed with extreme caution, undergo due diligence and heed the wise Latin warning: ‘caveat emptor’.
Navigate the Storm with the Help of T2W
Filtering out the good from the bad can be like finding a needle in a haystack. It’s time consuming and often quite difficult. Prospective punters that don’t know anything about trading are especially vulnerable, as they don’t know what questions to ask or the tell tale signs to watch out for. However, it must be stressed that while the rogues are ubiquitous, there are good services to be found, run by experienced and successful traders who charge a fair price. The next section of the FAQ will outline some of the points to have on your check list which, hopefully, will sieve out the worst of the cowboys and help you to find the right service for you.
HOW TO AVOID THE ROGUES AND FIND THE PROs
Common Sense Approach
First and foremost, a common sense approach is required. How likely is it that a service you pay $99.00 a month for is going to enable you to take the £500 that great aunt Ethel left you in her will and turn it into a million pounds in six months? You’d be amazed how many services make such outlandish claims. The old adage ‘if it sounds too good to be true, then it probably isn’t’, is a good starting point for filtering out the cowboys. Sites that continually make reference to ‘financial freedom’ and ‘live the life of your dreams’ and are scattered with images of fast cars, big houses and yachts adorned with scantily clad lovelies – are generally to be avoided.
Trials & Guarantees
Many alerts services will offer a free trial period. Be wary of those that don’t - unless they provide clear reasons for not doing so. Failing that, they should at least offer some sort of guarantee. Extreme caution needs to be taken here though, as many guarantees aren’t worth the virtual paper they’re written on. A common tactic adopted by dubious vendors is to offer a guaranteed 100% full refund if you can demonstrate that you’ve taken every alert provided and executed all trades exactly as the vendor specifies. Usually, this is over a prolonged period of time. If you miss any trades, or enter or exit them in a manner different to the way they advise – you won’t qualify for a refund. In reality, it’s highly unlikely that you’ll execute trades exactly as they specify, day in and day out, even with plug-in software executing trades for you. There are just too many variables, e.g. computer performance, connection speeds, different brokers, trading platforms and slippage etc.
Independent Reviews
Do a search on T2W for the service(s) you’ve shortlisted as there may be a thread about it. If you’re not sure how to do a search, this sticky explains all:
Essentials Of General Trading Chat Additionally, there may be a review in the
Reviews section of the site. Lastly, you could always start a bespoke thread of your own, asking members for their comments and experiences. A note of caution about any review - be it good or bad. Reviews that are overly gushing in praise need to be taken with a pinch of salt, as do very negative ones. On the one hand, friends and family of vendors have been known to write very positive reviews while, on the other hand, competitors offering similar products / services have been known to trash the opposition.
Testimonials & References
Many sites will offer testimonials from satisfied customers, many of whom will claim to have made huge sums of money very quickly. Whilst it’s understandable why vendors provide them, they don’t have much value and no decisions should be made on the strength of them. Ask for the contact details of a fully paid up subscriber who’s willing to provide a reference. Then ask that person detailed questions about the service. Are they making consistent profits using the service and what are its strengths and weaknesses etc.
Google Searches
Do a Google search with as many variations on the search criteria as possible, i.e. don’t just search the name of the service itself. Perhaps the sales copy refers to a bespoke system, technique or strategy that you could also search? Good companies will, often as not, produce few search results. The real rogues will produce many results (often with ‘scam’ in the title) and have threads devoted to them on sites like
www.scam.com Even in such cases, care should be taken, as legitimate vendors can be victims of internet trolls or unhappy customers who have unrealistic expectations. Sadly, for some people, there can be a massive discrepancy between their naive expectations and cold, hard reality!
Names & Faces
Is there an individual – or individuals – running the service that you can research? Look under the ‘About Us’ section of their website to see if individual company representatives are listed. If so, search them. (Be very wary of sites that don't list one or two of the key people behind it or provide ways of contacting them.) Some of the best known sites trade on the reputation of their owner. One or two are big names in the industry; others often have a long standing and credible track record with sites like T2W. The greater the public profile of the vendors, the easier it is to research them and, hopefully, to eliminate them from the list of rogue cowboys.
Professional Website
When it comes to everyday purchases over the internet, for many of us, a professional looking site offers some reassurance. However, with alerts services, some of the better ones are often very plain, even dull looking. The reason is that such sites tend to be for existing subscribers to use and aren’t really designed to attract new customers. The sites that shout the loudest and make the biggest claims are often the ones to avoid. The point being that an amateur looking site isn’t necessarily a reflection of the service that’s provided. That said, be very wary of sites that offer few contact details. Ethical vendors with a legitimate product or service have nothing to hide and should make it easy for (prospective) customers to contact them. Besides an e-mail address, they should provide a telephone number and a snail mail address too. If there’s a number – phone it. If there’s an answer phone, leave a message and ask them to return your call. Make a note of the name of anyone you speak to and their position within the company.
Have an Exit Strategy
This suggestion is a tad negative as it assumes the service is poor or, at the very least, that it turns out to be of no use to you. Before subscribing to a service, put yourself in the shoes of a paying customer who is unhappy with it and wants to get out. How easy (or difficult) is it to do that? What can you do now to avoid thinking in a few months time: ‘if I knew then what I know now – I’d never have signed up in the first place’. Imagine it’s a disaster; you don’t want to regret spending large sums of money that are unlikely to be refunded. So, don’t fork out big sums in advance, regardless of how tempting any introductory offers might be. Always opt for the first month at a high price and then sign up for the cheaper six month or annual deal if you really like it. Don’t buy any custom software without trying it first. Even if you’re in a live chat room and can see signals being generated, it’s important to use proprietary software yourself to ensure that it works for you. If you assume the worst and the worst then happens, you won’t be too surprised and, hopefully, you’ll be suitably prepared and able to extricate yourself from the relationship with minimal financial loss.
And Finally . . .
Understand and accept that there is no (guaranteed) simple short cut to great wealth. If there was a way of paying out a modest monthly fee and guaranteeing a profit month in and month out consistently, then everyone would know about it and sign up! With most alerts services (but not all), there will be a large degree of discretion involved in terms of how you use the information provided. It’s entirely possible – likely even - that two subscribers to the same service will have completely different results. One trader will make money consistently and think the service is great, while the other loses money consistently and think that it’s pants. In most cases, it’s not a black and white situation whereby all customers either make or lose money. Ultimately, even with an alerts service, the responsibility for your trades and the profits or losses they generate, rests with you alone and not with the vendor. Good luck in finding the service that’s right for you!
