For many, Trading signals services provide an option of reduced risk for entering into the trading markets. How is this so? Signals tell traders exactly which trades to take, including the specific instructions for entering and exiting the market.

For the first-time trader, making these decisions can be rather difficult, and many find that they have exhausted their account’s funds pretty quickly while trying to complete the learning curve.

Signals are not only for beginners, however. Many well-established traders also make use of trading signals as a means of boosting their profits.

Understanding what a signal actually provides is important, but so too is understanding how a signal is derived. Although trading signal services can certainly vary in what they provide and how they operate, most use a two-step system for providing highly accurate signals.

The first step includes the use of a computer algorithm which scans the markets for attractive trade opportunities that are going to offer a high level of predictability and therefore a high win rate. Some signal providers stop there, but others go one step further in having the computer-generated signal verified by one or more professional traders.

How are Signals Provided

Trading Signals

Each signal provider will have their own system and algorithm. Traders are free to ask each provider how they arrive at signal information, as well as how they deliver their signals. The most common options for delivery are email, text/SMS, web-based (provided on a website in real-time), social media, and live chat service (such as Skype).

In addition, some trading signal services focus on specific trade times, markets, and currency pairs. All of this information is important and should be requested from a signal provider in advance of signing up and submitting payment.

The two step system often proves be most effective, with many trading signal services who use this system able to provide a steady win rate in excess of 70%. This type of win rate is absolutely critical to being profitable in Forex and/or binary options trading.

What a signal will not tell you is how much to invest in each trade, but there are plenty of money management strategies that can be used, such as compounding. Together, signals and money management can provide a long-term trade strategy that will provide continuous profit growth.

Choosing the Best Signal Provider

As wonderful as all of this may sound, there is more to consider. Not all trading signal services are able to deliver the excellent results that they advertise. It is the responsibility of the trader to do their due diligence by screening trading signal services before subscribing. In most cases, these services are not on offer for free. This means that the signals must be highly accurate and must also provide value for the price paid.

In short, if the signals which are provided do not pay for themselves with the profit that they deliver, they provide no value to the trader. The good news is that reliable signal suppliers will be upfront and forthcoming with their actual performance.

Trading signal services offer something for both new and experienced traders alike. The key, of course, is seeking out reliable service providers who are willing to provide details on their past results. It is absolutely not a requirement that you win every trade in order to be profitable. What is required is a win rate that comfortably exceeds your loss rate. This must be combined with a solid money management plan. Put these two together and success is virtually guaranteed.

In order to use a Signal Service, you need to have a brokerage account set up. If you don’t have this already, then you can choose one of our recommended brokers from the list below.