Buying Trade Signals

Before I even mention this website, I want to state that am not a believer in buying trading signals or tips of any kind.  I firmly believe that most people can do better themselves and those providing the signals could be millionaires if their systems performed as they stated. Therefore what would be the need of charging to provide others to profit on their system since they would be too busy making money from trading. 

Anyway, I stumbled upon the site forexing.com which for a limited time is providing free trading signals.  I was and am skeptical of it….

I registered and logged in to view their signals.  Here are their 3 assumptions:

1. A successful Signal is when at the end of the next 3 consecutive trading days a minimum of 15 pips is obtained in the direction of a RISING or FALLING Signal Signal based at or near the posted daily levels which are the closes derived at approximately 4:00 PM EDT.
2. A failed Signal is when at end of the next 3 consecutive trading days a minimum of 15 pips is not obtained in the direction of a RISING or a FALLING Signal Signal.
3. MIXED Signals Signals are excluded from quantified results as the model assumes no trade should have been placed.
4. Entry at or near 4:00 PM EDT in direction of Signal with 15 pip criteria based from closing price.

They have a success rate of over 90% and have results to prove. 

Even after reading, I am quite skeptical of this considering what they define as a successful trade.  For instance, if they recommend a long EUR/USD position at 1.724 and if at anytime during the next 3 trading days, the price reaches 1.739, they deem this a successful recommendation.

So if there are 260 trading days and 50% of the time, they actually provide a rising or falling signal, then 90% of the 130 days would have produced a profit of at least 15 pips.  They provide signals for 4 currency pairs.  So if each pair could produce a minimum of  117 days of successful signals with profit of 15 pips, the total profit per pair would be 1755.  For the 4 currency pairs, it would be a total profit of 7020 pips for 1 year…..

My above assumption would be to close out any position once it has reached a profit of 15 pips.  The question is though, when do you set a stop to limit your loss.  You could not set a stop and just wait for the signal to be right but what if it never is right.  So even though those 117 days, you get a successful signal, the other 13 could prove as failures while you wait.  Let’s just say you wait for it to hit 100 pips for it to hit, you would still be up.  But how do you know how many of their successful recommendations didn’t initially lose over 100 pips before rallying to make at least a 15 pip profit.  You don’t.  

I’m working through this as I write so this could just be a ramble.  I don’t know, they don’t provide entry points or stops.  It doesn’t seem credible.  Let me know what you think. Here is a screenshot for recommendations for 11/16/2005 trading day:

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