Bitcoin trading seems like an exciting, alluring, and potentially life-changing career. When you begin investigating how to trade Bitcoin and other cryptocurrencies, you’ll start seeing adverts and links for free and paid signal groups.
Many Bitcoin traders come with extensive backgrounds in stocks, forex, and day trading, while some Bitcoin traders are self-taught. Whereas, a signal group provides a steady stream of Bitcoin and altcoin price suggestions, when to enter the market and when to cash out.
It sounds like easy money. But here are seven reasons against joining a paid signal group.
What Is a Crypto Signals Group?
As the price of Bitcoin rises and falls, cryptocurrency traders analyze trading charts to find patterns that reveal which direction the price is heading. Make the right call, and the trader can earn a heap of Bitcoin or fiat currency. Make the wrong call and, well, the trader can lose it all.
Part of what cryptocurrency traders are looking for are signals. If the signal is right, it is time to enter the market at a specific price.
A crypto signals group attempts to make crypto trading easy for beginners, illustrating exactly where and when to buy a cryptocurrency and when to sell it to make a profit.
There are two main types of crypto signals groups: paid and free. A paid crypto signals group offers more insight, a higher frequency of signals, covers more cryptocurrencies, and in some cases, provides hands-on cryptocurrency trading advice. A free crypto signals group will churn out signals, potentially without regard for the users, depending on who is running the group.
7 Reasons Against Joining Crypto Signals Groups
Crypto trading for beginners is overwhelming, especially if you have no background in trading, finance, stocks, and so on. The idea of someone leading the way is comforting, but it is extremely risky. Here’s why.
1. They Target New and Inexperienced Traders
Paid crypto signal groups target those without experience. Why? Because those people are looking for a foothold in the world of Bitcoin and crypto trading, so they will pay a monthly fee and accept the information being passed their way.
The tales of massive profits made on incredible clutch trading deals are easy to sell, too.
But there are very real consequences in attempting to day trade using a crypto signals group.
2. They Don’t Encourage Crypto Trading Education
Following on, paid crypto signals groups don’t encourage education. Sure, there are some well run paid crypto signals groups. The best groups are run between several full-time traders, offering extensive analysis on each call.
For the most part, however, crypto signals groups spoon-feed buy and sell calls to subscribers, who never learn why the call was made, how the crypto market is moving, or anything else.
3. They Cost Money, Every Month
Working on a subscription model, a paid crypto signals group can set you back anywhere between a few dollars to hundreds of dollars per month. If you don’t have much money to begin with and are being sold a Bitcoin trading dream, it will only take a few poor calls (or even one!) to wipe out all of your funds.
4. They Will Pump and Dump
Not all crypto signal groups offer the same service. Some crypto signal groups focus on delivering quality technical, and fundamental analysis.
Other signal groups have one focus: pump and dump scams. A crypto pump and dump scam group will target a cryptocurrency with a low market cap. The group leader will purchase large amounts of the cryptocurrency. Then, the group leader begins to hype up the rest of the group, getting members ready to all to buy one coin on a specific platform, the effect of which sends the price of the crypto soaring.
The group leader posts a buy signal then sells their holdings of the cryptocurrency as it rockets to the moon, while the other group members struggle to purchase the token before the massive dump takes place. Inevitably, people are left high and dry, holding onto a worthless cryptocurrency, waiting for the next pump and dump to come along—if it ever happens.
Thankfully, these groups are easy to spot, thanks to novel names like ” Big Pump Signal Bitcoin Investment Group” and so on.
5. They Steal Crypto Signals from Other Groups
Many paid crypto groups are amalgamations of other crypto signals groups. Some groups subscribe to larger groups, filtering down the premium crypto signal calls and gatekeeping the best.
Or, how about free crypto signals groups that provide a constant stream of crypto buy and sell options without providing a shred of analysis? Those free groups siphon off every call from every Bitcoin and crypto signal group, regardless of the group reputation, how it performs, and whether it is a good call.
The sheer number of crypto signals coming through makes it appear like you could pick up an incredible opportunity at any moment. It is quite the opposite.
6. They Can Manipulate Their Performance Record
How would you choose between different cryptocurrency signal groups? Cost? The number of calls? Or, how about the signal group’s performance over a set period?
Many groups like to advertise their monthly or weekly performance based upon a standard investment level. For instance, they’ll say you could have made a 346% profit this week if you started with $1,000 and followed each crypto signal call to the minute.
However, without heading back through each post and analyzing the market, you never know exactly how a signal group is performing. A signal group can make unrealistic promises about the profit you can expect to lure you in, massaging (or lying) about their figures to get you through the door.
7. They Get Trading Info from YouTube and Crypto Twitter
There is nothing wrong with browsing YouTube and crypto Twitter to find trading information. Many of the best traders post analysis about their actions, their picks for the future, and so on.
But that information is already available on those platforms for free. You don’t need to pay to access it. Furthermore, if you go to the source, you’ll learn a lot more about trading, rather than responding to signals.
8. They Can Disappear Overnight
By “they,” I mean two things: the people leading the group or the group itself. If the people leading the crypto signal group decide they have made enough money, there is a chance they’ll evaporate in the night. When that happens, there is a strong chance the signals group disappears with them, along with any money already spent.
Don’t Trust Crypto Signal Trading Groups
Not all crypto signal trading groups are scams. There are numerous excellent signals groups on Telegram and Discord, sharing crypto trading information and helping each other make sense of the volatile crypto markets.
But there are a lot of scammers out there hoping to make a quick buck, and there’s a lot of people out there that want to believe.
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