Most see trading signals, chatrooms, etc. as a scam. If too many people make the same trade, the advantage (edge) is competed away. Which is theoretically true. And if you have an edge why give it away?

Forex is an exception though. Even if you could manage to get a group of traders with $10M in capital, let’s say 1,000 people with an avg. of $10k, you are only at .0019% of the EURUSD *daily* trading volume.

One currency pair on one trading day. This also assumes all 1,000 people make the same trade with all $10k of their cash.

There is no way even a fairly large group getting signals, sharing trades, etc. can influence the foreign exchange market in any significant way.

It’s possible that maybe group of traders with $10M+ capital (combined) can influence the market on a low volume, smaller currency pair.

Assuming the person sending trade signals is sending signals on a few different primary currency pairs, and the members are allocating a small portion of their account to different signals, I don’t see how it could possibly impact the market, or the edge.

This is all contingent on the strategy actually working. There must actually be some kind of edge. And that edge can be exploited by a trading group as a whole without having hindering how effective the strategy is.

Only big players move markets. And in the currency market, “big” means $1B+ per day. Large corporations, banks, etc.

The strategy of small individuals or trading groups should be to trade off the moves the big players are making. Connect the dots. Ride the wave. The trader must know what is happening in the markets and why.

Most forex traders go straight off technicals. You will never succeed as a trader just by reading charts and thinking you can predict moves.

All asset prices are based on the underlying fundamentals. Does that mean technicals are worthless? No. Volume *is* a fundamental. Certain technicals can be used as indicators to help the trader understand what is going on in the market.

There is a difference between trying to trade based on a chart and a bunch of line, and using the technical indicators to help understand the fundamentals and what is happening.

The question really is, can you write a program/develop a trading system that uses technical indicators to make trades based on what that technical indicator may be implying about the underlying fundamentals of the market.

If so, you can automate the trading, send signals, etc. The hard part is actually developing that strategy and system.

And assume you had a great strategy, and were able to develop a trading system or write an algorithmic program that makes trades *and* is profitable. You could sit, do nothing and make money. You did all the work up front and it paid off.

Why sell your trades? Sure, we’ve already determined that forex signals probably wouldn’t ruin your edge. Unless trades were leaked to a quant fund that would probably reverse engineer what you’re doing.

But if you’re making 1% per week, you beat every hedge fund in existence. You could start your own hedge fund and raise an insane amount of capital. Even if you could make 0.50% per week.

The annual compounded return on 1% weekly is 67%.

Annual return of 0.50% weekly is 29%.

Every capital allocator would be throwing millions of $$$ at you for those returns.

So the only reason you would sell signals is if your weekly returns are far less than 0.50%. Maybe just inconsistent.

Maybe not. Maybe the strategy wouldn’t work for a large fund. Maybe it’s a good niche and you can make some decent side income off of sharing the edge. I suppose 30% annual returns is nothing to a young kid looking to make it big.

If you can generate returns of 2x, 5x, 10x per year on a $5,000 account with a small niche strategy, selling it to a bunch of kids with $2,000 accounts may not be a bad idea.

This thread is completely spontaneous and unplanned. Any critique is welcomed.