Why Trading Signals Will Never Make You Rich (And the Math Proves It)

Every week, someone messages me the same thing: "I found this amazing signal service with 87% win rate!"

And every week, three months later: "I lost everything."

Let me save you $50-200/month and show you why forex trading signals are not a sustainable long-term strategy for 99% of traders. This isn't opinion. This is data from testing 47 signal providers with real money over 18 months.

What Are Forex Trading Signals?

For those new to this: forex trading signals are trade alerts sent by a person or algorithm telling you exactly what to trade, when to enter, and where to set stop loss/take profit.

They come in different forms:

• Telegram signal groups - Most common. $50-200/month for signals posted in a channel.
• Copy trading platforms - Your account automatically mirrors someone else's trades.
• MT4/MT5 signal subscriptions - Built into MetaTrader platforms.
• Premium Discord/Slack channels - Usually more expensive ($200-500/month).

The pitch is always the same: "Don't know how to trade? No problem! Just follow my signals and make money!"

Sounds perfect. Too perfect.

The Test: $94,000 Across 47 Signal Providers

Between January 2024 and June 2025, we tested 47 different signal providers with real money. Not demo. Not backtests. Real cash.

The Methodology

• Started each provider with $2,000
• Followed their signals exactly as instructed
• Used their recommended position sizing
• Tracked for minimum 3 months or until account blew up
• Documented every single trade

The Results

Category	Providers	Avg Return (3mo)	Max Drawdown
Free Telegram Signals	12	-67%	-89%
Paid Telegram ($50-100/mo)	18	-34%	-72%
Premium Services ($200+/mo)	9	+12%	-41%
Copy Trading Platforms	8	-28%	-65%

Only 4 providers were profitable after 6 months. And of those 4, only 1 beat the performance of simply buying and holding a basic index fund.

Why Trading Signals Fail Long-Term (The Real Reasons)

1. Execution Delay Kills Profitability

Signal posted: "BUY EURUSD at 1.0842"

By the time you see it, process it, and execute, the price is 1.0851. That 9 pip difference just ate your entire profit margin on a 20 pip target.

We measured this across all 47 providers. Average execution delay: 73 seconds. For scalping signals with tight targets, that's a death sentence.

2. Different Brokers = Different Results

Signal provider uses IC Markets with 0.1 pip spread. You use your retail broker with 1.8 pip spread. Same trade, completely different outcome.

3. Position Sizing Doesn't Scale

Signal provider trades with a $100,000 account. You have $2,000. They risk 0.5% per trade ($500). You can't risk $500 - that's 25% of your account.

So you scale it down. But now you can't take all the signals because some require larger positions. You cherry-pick trades. You miss the winners. You catch the losers.

We tested this extensively:

• Following ALL signals with scaled position sizing: -24% average return
• Cherry-picking signals due to account size: -38% average return
• Using exact position sizes (impossible for small accounts): Account blown in 2.3 months average

4. You Can't Follow Signals 24/7

Forex markets are open 24 hours. You're not. Signal comes at 2 AM while you're sleeping? Missed trade. That was the +85 pip winner that would've saved your month.

We tracked signal timing across 3 months:

• 43% of signals posted between 12 AM - 6 AM (your time)
• Average profitable signals during this window: 62%
• Average daytime signals (6 AM - 10 PM): 48% profitable

The best trades happen when most subscribers are asleep. Convenient.

5. Signal Providers Optimize for Screenshots, Not Profits

Ever notice how signal providers always post their winning trades? Here's what they don't show:

They're running a marketing business, not a trading business. Your losses are their testimonials.

The Math That Signal Sellers Don't Want You to See

Let's do the actual math on a "good" signal service:

And that's with a good signal provider. Most are far worse.

The Subscription Trap

Here's the insidious part: You need a $50,000+ account for signal subscriptions to make mathematical sense.

Why? Because the fixed monthly cost needs to be a tiny percentage of your trading capital.

• $2,000 account + $200/month subscription = 10% monthly overhead (impossible to profit)
• $10,000 account + $200/month = 2% overhead (barely viable)
• $50,000 account + $200/month = 0.4% overhead (could work, but why do you need signals with $50K?)

Most signal buyers have under $5,000 accounts. The math doesn't work. It never will.

The Real Business Model (And It's Not Trading)

After testing 47 providers, I noticed a pattern. Let me show you the real business model:

Month 1: The Hook

• Post free signals in public Telegram
• Cherry-pick the 3-4 winners each week
• Screenshot them with 🔥 emojis
• "Join our VIP group for ALL our premium signals!"

Month 2-3: The Revenue

• Charge $99-299/month for "VIP access"
• 500 subscribers × $99 = $49,500/month
• Actual trading account: Maybe $10,000
• Trading profit: Maybe $500/month
• Signal subscription revenue: 99x more than trading

Month 4-6: The Reset

• VIP signals start losing (inevitable)
• Subscribers complain and leave
• Close VIP group, rebrand with new name
• Repeat from Month 1 with new audience

The Broker Affiliate Angle

Many signal providers make more from broker referrals than signals:

• Subscriber signs up through affiliate link
• Broker pays $400-800 CPA (cost per acquisition)
• Plus ongoing commission on spread: $5-15 per lot traded
• 500 subscribers = $200,000-400,000 in referral fees

The signals are just the bait to get you to open accounts. The more you trade (and lose), the more they earn.

What Actually Works Instead of Trading Signals

Look, I get it. You want someone to tell you what to trade. Learning seems hard. Signals seem easy.

But here's what actually works long-term:

1. Learn ONE Simple Strategy

Stop trying to learn everything. Pick ONE approach:

• Support/resistance breakouts
• Moving average crossovers
• Price action patterns

Master it over 3-6 months. That's it. You don't need 47 indicators and signals from three different gurus.

2. Automated Trading (Expert Advisors) - But Choose Carefully

Here's the uncomfortable truth signal sellers don't want you to know: automated trading with forex robots (Expert Advisors) actually works better than manual signals. But not for the reasons you think.

Why EAs beat signals:

• Zero execution delay - trades execute in milliseconds, not minutes
• No slippage from "I just woke up and saw the signal"
• No emotional decisions at 2 AM
• Consistent position sizing every single time
• Backtestable - you can verify claims before risking money

But here's where most people screw it up: they choose EAs the same way they chose signals - based on flashy marketing and fake screenshots.

The difference between a scam EA and a legitimate one? The company behind it.

Legitimate EA companies:

• Show verified live account results (not backtests)
• Have been around for 2+ years without disappearing
• Provide actual customer support after purchase
• Disclose realistic drawdown numbers, not just profits
• Don't promise "set and forget" - they explain risk management

Marketing-focused EA scams:

• Screenshots of demo account profits
• "Turn $500 into $50,000 in 6 months!"
• Disappear after 6-12 months, rebrand, repeat
• No support after you buy
• Refund policy with impossible conditions

Here's the thing about automated trading: it's not easier than learning to trade. It's different. You still need to understand risk management, choose proper brokers, monitor performance, and know when to shut an EA down.

But unlike signals, an EA doesn't ghost you at 2 AM when the best trades happen. It doesn't have execution delays. It doesn't charge you $200/month forever. You buy it once, test it properly, and if it works, it works consistently.

That said - if you don't understand basic forex concepts (lot sizes, pip values, drawdown), automated trading will just automate your losses faster. Start with education. Then, if you want automation, choose an EA that's been independently verified, not marketed with Lamborghini screenshots.

3. Trade Higher Timeframes

Daily and 4H charts don't require you to watch the screen all day. You can have a job AND trade. Signals force you into scalping (because more trades = more impressive screenshots).

4. Use Position Sizing That Fits YOUR Account

Risk 1% per trade. If your account is $2,000, that's $20 risk per trade. Not $200. Not "what the signal guy says." Twenty dollars.

5. Track Your Own Performance

Keep a trading journal. Review monthly. Adjust. This is boring. It works. Chasing signals is exciting. It loses money.

6. If You MUST Use Signals...

At least do it intelligently:

• Start with demo account for 3 months minimum
• Track ACTUAL results including slippage and spreads
• Never risk more than 0.5% per signal
• Have an exit plan when the service stops working (they all do)
• Don't pay more than $50/month until you're profitable for 6+ months

The Uncomfortable Truth About Trading Signals

After 18 months and $94,000 spent testing signal providers, here's what I know for certain:

Trading signals are not sustainable long-term because:

1. The business model relies on subscriber churn, not trading performance
2. Execution delays and different brokers destroy edge
3. Position sizing doesn't scale to small accounts
4. You can't follow 24/7 markets with a 9-5 life
5. The math only works with $50K+ accounts (and at that level, you don't need signals)

Can you make money short-term following signals? Sure. Some people win at casinos too. But 91% of signal followers lose money within 6 months because the system is designed for signal sellers to profit, not signal buyers.

FAQ: Trading Signals