What are crypto signal groups? 5 reasons why you shouldn’t trust them

If you are looking for an easy way to start trading crypto, you might come across crypto signal groups. But what are crypto signal groups and how do they work? Most importantly, should you trust them with your own money?

What are crypto signal groups?

Crypto signal groups are online communities founded by crypto traders who share information about the market, their trades, crypto and more. You can usually find crypto signal groups on popular social media platforms such as Discord, Telegram, WhatsApp or Twitter.

The idea behind a crypto signal group is quite simple. As a member, you will be informed about the best time to buy and sell cryptocurrency. Signal groups can also tell you about new and exciting projects so that you can get in right at the project’s launch.

But are all crypto groups worthy of your trust?

5 Reasons Why Crypto Signal Groups Are Untrustworthy

Ideally, all crypto groups will provide reliable and precise signals, leading their members to spectacular profits. But this may not always be the case, as you should not trust crypto signal groups.

1. You don’t want to learn about crypto trading

If you’re looking for a crypto signal group to join, there’s a chance you’re a newbie to trading. It may not be the best solution if you are looking for a way to learn about crypto trading.

Most groups, especially those you can join for free, provide little or no information about the trades. The admins just post a message about which token you should buy and when to do it. And most of the time, there is not enough time for you to properly research the project yourself.

Of course, some groups give a thorough explanation about the following trades, but they are the exception. And these groups are usually not free.

2. The crypto “Signals” are probably copied from another source

The truth is, you might not be the only newbie in that group. If the admin continues to post trading signals without explanation, these signals can be copied from other places.

Many traders post their trades online, so it shouldn’t be too difficult for group admins to find the next “signal”. Now they can do this to build authority if they are not knowledgeable enough. Then, as their “signals” stand the test of time, they can switch from a free trading group to a paid one.

3. It can be expensive

As we’ve mentioned, there are crypto signal groups you can join for free, but you shouldn’t expect too much from them. Joining a paid group can be expensive, as you can pay hundreds of dollars a month.

Even if you pay good money, it doesn’t make your trades risk-free, so you can break the bank, especially if you follow every trade signal recklessly.

4. It can be a carpet cover

As the crypto market has grown exponentially in recent years, the number of scammers has also increased. If someone creates a crypto token for the sole purpose of pulling the curtain on their crypto investors, they need to market the token to attract investors.

So they can create one or more crypto signal groups to get new buyers for their soon to be worthless coin.

5. The group assumes no responsibility

The more members a group has, the more successful it is. So sometimes admins can exaggerate the results to increase their audience. If you show the difference between their claims and the reality, you can quickly get banned.

If the admins are the only ones who can post in the group, it’s a clear sign that they don’t want anyone challenging their expertise and authority. Also, nothing stops the moderators from leaving or deleting the group as soon as they make enough money.

What to do instead of joining a crypto signal group

If a crypto signal group seems shady to you, it’s better to trust your instincts. In this case, you should look for alternatives to understand how the market works and find out which are the best practices.

Fortunately, you can gather useful information while avoiding not-so-trustworthy crypto signal groups.

1. Go to social forums

There are plenty of crypto-dedicated social forums, and you can easily find them on Reddit, Twitter, Telegram, etc. On these forums, you can learn about trading, market sentiment, new crypto projects, mining, and everything related to crypto.

As you might expect, many forums are filled with irrelevant information, hopeless crypto projects or scammers. However, there are many crypto forums that share authentic information.

2. Learn on a recognized platform

When it comes to crypto, many personalities and websites proclaim their knowledge of crypto. So it can be difficult to choose one to learn from.

Your safest bet may be to learn from a well-known crypto platform, such as Binance or Coinbase. And the best part about it is that these platforms will pay you to learn about crypto.

3. Copy experienced traders

In addition to teaching you about crypto, some platforms allow you to copy other people’s trades. This way you can check how experienced traders manage their assets and see the results.

This is a good way to start trading if you don’t have the time or experience. However, you should keep in mind that someone else is making the decisions for you.

4. Start with fake trades

Once you’ve got your trading system together, it’s best to put it to the test before investing your money. Test your strategy using a risk-free crypto trading simulator so you won’t lose a dime if your plans don’t go as expected.

Once you are profitable and feel safe enough, you can start investing real money in your crypto trading.

Should you trust crypto signal groups?

When it comes to crypto signal groups, make sure it doesn’t sound too good to be true. If the admins are secretive about their identity, it’s best to stay away.

However, you should continue to learn, as the more you know about cryptocurrency, the more comfortable you will be when trading. Fortunately, there are many tools to learn, such as YouTube channels, forums or podcasts.

​The information on this website does not constitute financial advice, investment advice or trading advice and should not be considered as such. MakeUseOf does not provide advice on any trading or investment matters and does not recommend that any particular cryptocurrency should be bought or sold. Always perform your own due diligence and consult a licensed financial advisor for investment advice.