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Is it unethical to provide paid for signals

Discussion in 'Beginners Bootcamp' started by Kpnxn, May 3, 2010.

  1. Kpnxn

    Kpnxn Recruit

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    Hi,
    I currently using a breakout system on demo, mainly because I'm too scared to use my own money (of which I don't have a lot of) in a real account. The system works wonderfully well and showed a consistant profit. My question is, will it be that wrong to provide 4hourly paid for signals @ $20/month if I haven't even tested it in a real account myself? That way I will make $$$ to start real trading with someone else's money and also build up nice 2nd income through the signals I provide.
    Another thing, will it be possible for someone to program an ea for me which will detect the signals on different pairs, combine it all in 1 email and then sent it out to my customers via email? I know it's far fetched, but hey, I have to try, right?
     
  2. Pharaoh

    Pharaoh Colonel

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    If you FULLY and CLEARLY disclose that you've only tested it on demo, I wouldn't see a major ethical issue.

    Why not open an account that lets you trade 1 cent/pip? Then you can test it in a live environment.
     
  3. Ricex

    Ricex Sergeant

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    wow..... and there I was about to join in another verse of 'kum-ba-yah'.

    Your asking about ethics! in forex?....... excuse me while I split my sides....

    Your question "can I sell something that I don't even know if it works?".....errrrmm

    Pharaoh, are you just telling him it'll be ok if he puts a big enough sticker on the box saying "I have no proof that this will work......but buy it anyway you might get lucky"

    ..... isn't this site about preventing this sort of second parasitic type industry, people who have stumbled upon something, don't trade it themselves, then rebundle it, maybe put a sticker on the box, maybe not, then flog it?

    ....come on guys help me out here, it's the 'second coming' over on the Felix shrine page and twisted ethics here from desperate beginners asking how much they can get away with ripping their fellow traders off.....

    are you all being eaten by the beast?
     
  4. Forexwatchman

    Forexwatchman Sergeant

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    As the old saying goes "You have to have money to make money" I think you'll find that to be the case here. Even if you do provide a high quality signals service, no one will know about it unless you promote it through advertising, which means you still need money in order to make it. There are many free ways to promote a website or a service through the web BUT they take a really long time to have an effect and show results and being in a niche market like forex makes it even harder to reach "target" consumers and not some 12 year old in Brazil who stumbled upon your website by mistake or sheer boredom. I run my own website but don't sell anything, I don't even have ads on the website, but I promote it fairly well for free and still don't generate anywhere near the traffic this site generates which is where you need to be in order to start generating profit. I simply want to teach and hopefully meet like-minded traders along the way... but I digress.

    You sound like you have great ambition and genuine motivations behind wanting to profit off your signals because you believe that they work, you've seen it in your own demo account, and so why not let others pay to use it as well. I'll tell you why though. Instead of devoting attention away from your trading skills and into the marketing of a product, keep adapting your strategy and learning from others because in the end you will gain far more from the experience than from any income generated through your signals service. if money is that big of an issue then just forget about investing real money until you can stand to lose a small enough sum to open a micro account with a reputable broker. In the meantime learn the markets. I assure you that is your biggest goal here, not the money. If you want to do this forex thing, then learning it is the most important part.

    But as far as ethics go, you definitely have to test it out on a real money account first because real accounts differ from demo accounts. And furthermore you should register with one of the many websites designed to show live trading results for other aspiring traders looking to start their own hedge funds and signal services and create an account in order to broadcast your performance to the world. Its like a certification that your signals work and you aren't another scam artist, plus its free to do so why wouldn't you. Network with other traders through social forex networking sites and see what others are doing that fit in with your desires. And as far as designing an EA goes, if you got enough time to waste on another one of those then you should be trading a live account and using that time to increase your wealth through your trading and not a stupid robot. Those are my thoughts.
     
  5. Pharaoh

    Pharaoh Colonel

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    If he's willing to put a big enough warning sticker on the front of the box, that puts him in a better category of ethics than so many EAs that have nothing but backtests (if even that) and claim to have been developed by an experienced guru who finally found "THE secret to profits" (but were really just purchased from a coder). Many of these are turned lose with all sorts of bogus and highly unethical claims.

    I'm not saying that an EA that's never been forward tested on a live account is a good thing or a desirable thing. I am saying that full and clear disclosure of the development status of the EA would cover any serious ethical issues. Untested (or not live tested) isn't inherently unethical. Lying or being deliberately uninformative about how a product was developed or tested is unethical.

    Overall, I think the best thing to do is to test it on a tiny live account.

    Here's a fun experiment. Someone code up a simple EA. Backtest it enough to verify that it's unlikely to demolish anyone's account in 10 minutes. Market it as "an experimental, untested, and unproven" EA and see if anyone buys it.
    :D
     
  6. Ricex

    Ricex Sergeant

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    The truth or not of ethical judgements is not absolute of course, it's all relative to the traditions, convictions, or practices of your particular group in society.

    Mine tell me that in probably any other type of business this style of behaviour would be viewed with suspicious eyes, and with what new traders have to already cope with in their baptism of fire, I think this sort of idea should not be promoted.

    Kpnxn, you've asked the question, you yourself have to decide in the end of course, but if your under financed that much you would be advised to stand aside until such times as you can get together sufficient funds.

    Rather than worrying about ethics and dodgy schemes, ask yourself if you really think your fear will vanish when you have more money. Your problem, in my opinion, is psychological not ethical, don't mean to sound harsh but there it is.
     
  7. cowmadagan

    cowmadagan Sergeant

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    I've currently got three ethics books on the go, including 'philosophy of law' by Mark Tebbit which I finished about three weeks ago and am doing a second run through.

    So, from both the base of law and ethics from the stance of 'never rob Peter to pay Paul' one should try the profitability of a strategy or EA for over six months so as not to risk feeling guilty on either the bad side of tort law or their death bed.

    Admittedly, I say six months because my experience has shown that a monumental WTF moment occurs once every three months in the market, but some times waits for six months to pass before labeling the market with a big WTF trend.
     
  8. Kpnxn

    Kpnxn Recruit

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    Thanks for all the comments, I really appreciate it! In all honesty my mind was made up before I even started this thread: I will test it on a small live account, and in the meantime provide my signals via zulutrade- I suppose I just needed confirmation. My thinking behind using zulutrade is to build up a name for myself, and maybe later (if all goes well) start a clickbank product providing the signals.
    Thanks again.
     
  9. Danny boy

    Danny boy Recruit

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    Kpnxn, can fully understand your "ethics issue" as new and in similar situation. I know it may be different for you but i only recently started trade for "real" and its worlds apart!!!

    What you think you knew will change completetly once its your hard earned cash on the line!!

    I am just trading small account @ 10p per pip.

    Good luck.
     

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