Trading Signals

Hi guys, Andrea Unger here, and sometimes I’m asked about trading signals.

And what my opinion is and so on. So obviously, you know that my main activity has been to teach you how to develop your trading systems because I believe that the way to develop your own stuff, you’re totally comfortable with it. And I push; expect to teach how to fish rather than give you a fish to eat.

The point is that if somebody really wants to purchase trading signals instead of developing his own stuff, there are a number of things to consider. First of all, who’s selling you these signals? You must trust that person; you must believe that that person is a decent person where you can trust anything they do and that he is not certainly cheating anyway. This is very important. It’s not easy because you can’t really know, personally, everybody, but it’s something you have to try to understand.

The second point, very important one, is what kind of signals are you getting? How are the signals delivered? If, for example, you get a signal suddenly in the day, I entered here a 10.42. Oh, now I have to go immediately and enter– So, I mean, if you are a worker in a factory and you are there on the machine, you cannot stop your activity to go and place the order. This is not doable; it’s not doable, so you have to be careful about what you’re purchasing because if you cannot use it the way it should be used, you will not take any advantage of it—even in case it were a good service because you cannot use it properly.

So, you have to cope with your daily activity and to check how you’re getting the signals, what kind of signals and to see if you can merge the two things together. If you can really see that you can use a service you’re purchasing 100% the right way, this is very important. And another thing is to analyze the service itself, what they promise. If you see sort of this equity line, well it would be very nice if it were true, but I have some doubts when I see these things. I mean, when it’s too good to be true, normally it is not. So, you have to start being suspicious about that.

One thing you have to try to check out is the average trade. The average trade is a measure of how robust the trades are when you apply them. So, if the average trade is too small, you know that any small change in the conditions in your application might change, completely, the outcome. If, for example, you trade the Eurobond and you have an average trade of €12? Guys, the Eurobond has a tick-value of €10. So, already, one tick is cancelling all the gain. Moreover, if commissions are not included, you have also to calculate that you have to add cost, trading costs from the broker and so on. So actually, you have to be careful about what you purchase; and if the average trade is not large enough, to be sure that if you don’t apply exactly the same conditions that you’re told, your trades will still get something out of that money [PH 03:43] you don’t reach to. Write [PH 03:45] everything in the worst way; that means entering at different prices that do not lead to any profits anymore. That is very, very important.

So actually, I still suggest to you to learn to develop your own strategies because once you develop your own strategy that is really fitting your characteristics, you’ll get a winning tool. But if you can’t because you’re not willing to, because you have no time—which is possible; you may have so much to do that you cannot really apply this. This is not something that you learn from morning to evening. You have to study hard, you have to trade and so on. So, it takes time. If you don’t have the time, but you still want to take advantage of the skills of somebody, you can consider purchasing his signals. But, again, be sure that what you’re purchasing is [inaudible 04:40]: who, how and what it looks like. Everything is very important to be evaluated.

If you can study, do it yourself. If you can’t, then you will take advantage of somebody. Like if I were to be investing in a fund, I want to take advantage of the skills of those people managing the fund—perfectly fine.

Check carefully. Check, carefully, what you’re getting out there, if it fits you and if it has been at least true. That’s it for now. Ciao from Andrea Unger. Stay tuned.

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Author: Andrea Unger

Known as the only Four-Time Trading World Champion (2008, 2009, 2010, and 2012), Andrea Unger is a full-time professional trader since 2001 and part of the Scientific Committee of SIAT (Italian Society of Technical Analysis). Appreciated author, he is often invited as a speaker all around the world.

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