Frozen lake -> MQl5 platform;
Ice fishers -> MQL5 trading signals; occasionally, some of them break in and vanish, but who cares, as long as we have those handful of guys standing tall and catching some of those fishes, right?
Fishes -> well, as discussed previously, not the large investors, those are fully aware that the average fisherman on the lake is as dumb as it gets; we are left with all the small fishes, that are drowning on their own due to lack of food (capital) so why not to try to take one or another worm?
- The average subscriber has the same capital problems as the average forex trader has. Not only that, the average subscriber needs to cover the costs of VPS and subscription fees, resulting in at least 40-50 USD per month. Most of our readers would say that capital size of 1000 USD would be enough for them to consider investing -> let' s play a game of maths to understand how bad it gets:
- As a subscriber, on monthly basis You should earn at least 50 USD to cover the costs of subscribing; because You are taking on risks on Your side as well, You would expect to have at least 30 USD on top of that, in total 80 USD, right? - well, if You start with 1000 USD capital, that would mean... what? - 8% profit per month? sounds reasonable?
- For such a signal service, that would total in 152% cumulative growth through year; tell me, wannabe investors, do You know any mutual fund that would show these types of results? or any particular stock? or any other active and repeatable investment that would bring in such values? - well, we all know the answer to these questions, don't we?
- So what do mutual funds, for example, make on yearly basis? - 10-12%? - if divided on months, that would be a grand total of... 0.9% per month. And this is the point, You, boyz, should get serious about - large fish investors are looking on these investments as the most reasonable and reputable, while You are hunting 10x of that on monthly basis? - is that reasonable or sustainable? should You be shocked when these tremendous investments blow up in Your faces? - hopefully, we are getting to a common answer here.
Investors, here is point about You - are You aware of how bonds work and what are risks, coupon payments? - most of Your chosen signals are bonds that have risks higher than advertised and showed in the past, yet, the coupon payments are insignificant when compared to the real risks.
- Remember the point about some decent signals being left outside the screen? - well, that is very much alive. Like in all businesses, if there is demand, there will be supply (and vice versa). Here, in MQL5, there is a huge demand for aggressive and poorly thought-out signals that ignore the basics of money management. While these signals get a ton of recognition, others, with lower, yet, sustainable returns, and far more efficient trading are being ignored. For these other traders, there is no need to keep up their work if that' s not being evaluated by others, thus, they decide to leave MQl5 platform and join some other where these aspects of trading are recognized (like, Darwinex);
- All in all, we are being stuck in this loop-hole, which brings together unreasonable investors with real lack of capital (=gamblers) and those traders that try to live up to these unrealistic standards. Everyone else is staying away from this lake-fauna, yet, who cares as long as there is the lake, right?
Some of our readers (especially, on investors' side) could get annoyed at this point - we are criticizing a lot, but where is our advice for improvement? - Well, hear these out:
- If You are an investor that looks to earn more than 3-5% per month and hope to receive sustainable and secure service, You are not an investor, You are a gambler. In this case, don't rush to subscribe to anyone -> accumulate the capital and join the party when Your risk tolerance and general idea about investments will be more clear;
- Some may think that changing MQL5 platform to something else will improve anything as somewhere else could be potentially better trading signals offered -> don't bother, capital is Your problem, not individual signals. Even with other platforms, You will have Your indirect costs - as long as those cannot be covered with 3-5% of profit, don't even bother;
- Due to Your unwise investing decisions, money flow is brought to "wrong" signals. In the result, signal providers have higher incentives to create a few more of such signals when the old ones go bust. Remember supply and demand rule, it applies here as well. If everyone would accumulate their funds and invest when they are really ready to go, expectations would be totally different and so would be the supply.
If traders can always adjust to the demand, are the investors the main source of problem? - probably, yes, but certainly not the only problem, it's the fault of all system. Remember, trading in general is risky and messy, for stocks the rate of success is higher, approximately 15-20%, but its still far from perfect. In the result, even if the very best industry professionals were to offer their services, we would still have an enormous part of negative and losing signals. What is more, MQl5 and its management of all this system doesn't make things better by any means. Here are FX SUmo set of changes that should be made ASAP in order to improve the overall quality of signal supply: