Trading signals are trade ideas presented by professional traders that amateurs or beginners can follow to profit in the same manner. These positions are handed out through copy trading websites, social media apps such as Telegram, WhatsApp, etc., and via trade copiers. Most of the novice traders in the industry choose to follow signals as it helps them get through their learning capital without losing much equity.
Key Features Of best Signal Providers
There are tons of signal providers in the financial marketplace, and it can be confusing to choose the right one. It is sad to note that most of these services are run by scammers who show fake statistics to rob novice traders of their money. The best trading signals have the following characteristics:
- Records. Genuine traders will track their performance through verified websites such as Myfxbook. They make their records public so that others can gauge their output before choosing to follow them.
- Transparency. One of the key features of a good trading signal is maintaining a clear and transparent forum or chat history where traders can converse with one another and ask questions directly to the providers.
- Distribution Method. The best signal providers will ensure to provide their trades through automated systems such as a trade copier. This eliminates all the troubles of manually following signals such as latency, lot size adjustment, trade management, etc.
- Pricing. The cost should be decent enough and within reach of an average retail trader.
Benefits and demerits of following signals
Trading signals comes with the following advantages for traders:
- As mentioned before, traders with no experience are able to follow trading signals while learning about the markets. This helps them from big drawdowns that may incur while trading on their own
- The right signals can be a source of a good amount of passive income
- Mentors can provide their signals to their students for teaching purposes
- It eliminates the hassles of scanning the charts and news for finding profitable trades. It might have a better effect on the psychology of a trader
While the disadvantages may be listed as follows:
- With so many signal providers out there, finding the right one can be a big hurdle. Most of the companies scam traders by only showing profits
- It can be hard to follow signals that are sent manually through social apps. Traders can miss out on trade entries and exits, which results in different outputs that the provider
Many signals promise to provide gains of up to 10000 pips a month to attract traders. If such a consistency existed in the financial markets, then the hedge funds and banks would have hired these highly profitable traders and be gazillionaires. Slow and steady is the only way traders can progress in the markets.
Are trading signals available for forex only?
Trading signals are available for all types of markets. Some forums have daily postings in their market research sections which traders can read for free and get a general idea of how specific instruments forex, stock, futures will perform.
Can trading signals make you a millionaire?
Trading signals are financial advice that can help traders at the beginning of their careers. It can help become a source of a side income; however, the true success in trading is only at hand after crafting your own art and mastering it.
How much do trading signals cost?
Most of the trading signals cost anywhere between $50 to $200 depending on the performance. Sometimes more doesn’t mean the best. There are various other factors, such as records, transparency, etc., that traders will have to look at.