Why traders sell signals instead of trading their strategy solely?

Question

There are many websites where traders sell their trading decisions - so called "signals"... Some of them are fairly good but mostly are bogus. I wonder, why those people, who actually possess a profitable trading strategy would sell signals to somebody else? Is it an attempt to affect market so that the strategy works better for the owner? Is it a move in a good faith? Greed?

Answer 1

Some may not actually have the capital to trade or may not want to take on risk. Its easier to just get sell 100 subscriptions for 100 each and make 10K a month than to trade 100,000 and make 10% a month.

Really good strategies however,can always be sold to hedge funds for lots of money. Personally I like to trade and I wouldnt sell my ideas. But I can see why some others do it.

Answer 2

It's a guaranteed profit.  

Selling a strategy or trading signals doesn't require him to put his own money at risk.  The person who buys that strategy has to take the risk.

Some of them look good for a time.  Usually a short time.  But NONE of them work over the long haul.  Even some of the best known names begin to fail after they have been publicized.   (Note that it is easy for investors to brag about their gains, than publicly admit their losses.)

Answer 3

To trade a mechanical system, it has to work consistently.  Any system's signals will work on some stocks some of the time.  The ones who are selling their systems have systems that don't work.   lot of them have never actually been tried.  Down in their disclaimers they have warnings about the lack of value in "hypothetical" results.  This means that they haven't actually traded the account.  They just found some historic numbers and are saying that "if we had been trading, we might have made this much money".