The Truth About Multiple Take Profits. Why TP1, TP2, TP3 is SCAM ( Gold XAUUSD Trading Signals)

Do not buy GOLD XAUUSD trading signals with multiple take profits before you read this!

Multiple take profits is a common scheme scam signal providers use to fake trading results, hide losses and mislead traders. 

In this article, I will share with you a simple guide how to verify and test multiple tp's signals. You will learn common red flags that are easy to recognize and the instances when multiple take profits can be profitable.

Let me show you how to expose scammers on Telegram, WhatsApp or any other platform or website.

Remember This

And let me tell you from the start that multiple take profits is not always a scam. At the same time, however, the majority of the scam signal provides use multiple take profits.

First, remember a simple rule:

the more take profit levels a signal provider uses, the higher is the chance that it is a scam.

WHY?

The main reason why so many scammers use multiple TPs in their schemes is that it provides a legit way to manipulate a trading statistics.

Let's take this Gold signals Telegram channel GARY GOLD TRADER.

He provided this free XAUUSD signal:

Gold sell now @3226.5 - 3229.5

sl:3232.5

tp1:3223.5

tp2:3215.5

This signal has 2 take profits. 

According to the trade management rules of this trader, when the price reached take profit 1, you should close half of profits and move stop loss to entry.

Here is his update when the price reached the first take profit.

"Close half profit & set breakeven now"

And this signal has an important red flag you should learn to always spot. Let's study his trade on a price chart.

Expose Fake Results

That's how this Gold trading signal looks on 1 minute time frame.

I underlined the entry level, stop loss and 2 take profits.

After the trading position was opened, the price reached the first target, a half of profits was closed, stop loss was moved to entry.

The price indeed reached the first goal and some profits were made. The market reversed and the rest of the trading position was closed on entry.

What is the problem? 

Let's study that setup from the percentage perspective.

If we take that sell signal on Gold with 1% risk per trade,

we will get 0,8% of profits when the price reaches the first goal.

When we close half of that, we will make 0,4% reward.

When the trade is closed on entry after a reversal, our net gain will be 0,4%.

From the statistics perspective, it is a winning trade.

But from the reward to risk ratio perspective, it is a very small winner.

You risk 1% to get less than half!

So you need at least 3 winning trades in a row that reach only TP1 to recover 1 losing trade.

Scammers usually set their first take profit very close to entry, to increase the chances that it will be reached, to tweak their trading results.

Look how this guy reported this trading signal in his journal.

He claimed 40 pips win.

The distance from the entry to TP 1 was indeed 40 pips.

But in fact, real reward was just HALF of that.

How to Expose?

When you check a telegram or any other signals channel with multiple take profits, check a reward to risk ratio for the first target.

Reward for TP 1 should be strictly bigger than the risk. The bigger - the better. 

Measure a reward to risk ration for the first target, it should be at least 1.2 to 1.

Trade management with multiple take profits is quite complicated, especially for beginners in trading, so you can use such signals with Take Profit 1 only for easy backtesting and trading.

Also, a Forex, Gold signal provider with multiple take profits should provide trading results reports in percentage %, not it pips.

Pips statistics will not reflect real results at all.

Not Always a Scam

If a trader applies multiple take profits, it does not mean that he is a scammer.

Personally, I use 2 take profits in trading occasionally, when I take a trend following trade and try to catch an extended price movement, booking some profits earlier.

In my trading academy, sometimes we discuss the trading setups with 2 take profits. 

That's one of such signals.

EURUSD Long From 1.110

Take Profit 1: 1.185

Take Profit 2: 1.1238

Stop Loss: 1.1063

Let's examine that trade on a price chart.

You can see that the distance from the entry level to TP 1 is quite substantial.

Reward to risk ratio for the first target is 2.3 / 1.

Closing half of profits when the price reaches Take Profit 1, you would make 1.1%, or trading with just 1 TP only, you would make 2.3%.

In that trade, multiple take profits strategy helped me to increase the gains.

More Than 2 Take Profits

If you encounter a signal service that has more than 2 take profits: 3, 4 or even 5, I strongly recommend not trading such signals at all.

Trade management with so many targets is extremely complex.

Such signal providers will most likely provide false trading reports and results statistics.

My Advice

If you just started trading and if you are looking for a reliable free or VIP Forex Gold signals provider, I suggest choosing the one that uses 1 TP.

It will be much easier for you to follow such signals and expose false claims.

When you mature and understand how to manage trades properly, you can try multiple take profits signal providers, just make sure that you test them with my guide!