Many traders rely upon a signal service to help them gain an advantage within the marketplace, and you can even use this to help you move your binary options trading forward. However, you do need to be careful with these. Some of these services are not as effective as others. Signals can be generated automatically by a computer, or they can be written up by a computer. Some signals will be accompanied by an explanation while others will not. Basically, what you should be looking for out of these is timely and accurate advice. As these are predictions, they will not have 100 percent accuracy, but you do want something that is well above random chance.
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The first thing you need to ask yourself is why you want a signals service. Do you want something to help supplement your own predictions so you can double check your work, or do you want someone else to do the work for you? Either choice is fine, but it will influence your decision making process. How the signal is sent is also quite important. You want something that you can receive automatically because of the quick paced nature of trading. Having a downloadable program that allows you to receive updates instantly will be your best choice, but receiving texts or emails are also options.
When you are trading binary options, signals can be very effective, especially when it comes to predicting the end of a current trend. You want to also make sure that your signals service matches the type of trading that you will be doing. If you trade 60 second options, a service that emails you once per day will not be effective when it comes to helping you. If you trade short term binary options, you want something that will alert you instantly as soon as a signal becomes ready.
The main benefit of a signals service is that it can give you a more exact approach toward executing trades. Instead of guessing or approximating an entry point, a good signals service will give you an exact entry and exit point. You can use this method for giving your trading a mathematical edge, or you can rely completely upon it for making your decisions. The thing you need to remember is that the majority of services rely on technical analysis, which means that they are geared more toward the short term trades. At these, they can be very effective. Whether you want to rely solely upon a service, or you simply want to have a professional helping you to supplement your own strategy, a good service will be able to spot more trading opportunities than you would be able to find on your own. Even if you decide not to use all of these, you will be expanding your reach and broadening your choices, and this will be a good thing as it increases trading flexibility.
The big problem with a signals service is that most of them are geared toward a very specific timeframe. If you want to trade 5 minute options, for example, you might find that not all services can predict this effectively enough to make a consistent profit. Furthermore, because binary options are still fairly new, most services are not designed especially for binary options. This doesn’t mean that they won’t help you, but a certain amount of adaptation might be necessary. A service can still be a very lucrative choice if they are being used in a correct fashion. Just make sure the service you use will benefit your style of trading.
It would not be wise to sign up to receive binary options signals before properly evaluating the service being provided. The truth of the matter is that anyone can say that they are able to provide winning signals at a high rate, but only a few are able to actually deliver. Furthermore, the way in which these services work does differ, so it’s important to only subscribe to a service that is suitable for your schedule and how you like to trade.
The first area of evaluation should be the win rate. This will be the percentage of winning signals as opposed to losing signals. A solid win rate would be in the area of around 65% to 70%. A few, but not many signal providers are able to provide a winning percentage of higher than this. Each provider is going to advertise their top rate, but how do you know that the claim is true? The most reliable methods include:
Testing: Sign up for a free trial (if available) and put the trade alerts to the test. This is the best way to see what the performance actually is. If signals are provided around the clock, you will of course not be able to make use of every alert. Even so, through testing you should be able to determine an average win rate for the times of day that you typically use the service.
Result File: If testing is not possible, contact the signal provider and ask how you can see the actual results for the past few months. Some providers make this information available on their website, while others retain files of past results. Not only will this information tell you much about the success rate, it will also show the typical times of delivery, which assets and expiry times are used most frequently, and how the information is presented to traders.
The internet is loaded with binary options traders, and this fact means that traders are able to easily connect and share information. In some cases, the best way to judge the reliability of a broker or signal supplier is to ask others who have used the service. Message boards, chat rooms, and social media sites are just a few of the places where you can find fellow traders to confer with.
With the success rate matter handled, the next step will be to check on things such as delivery method, hours of delivery, and which assets/expiry/instruments are being used. The delivery method may or may not be important to you. Some providers offer several methods, including website, chat, text, and more. So long as there is at least one method that is suitable to you, there should be no problems. The hours of delivery are much the same – you just need to make sure that binary options alerts will be arriving during the hours you typically trade.
The assets, expiry times, and instruments are less important in that you should be willing to use whichever options are provided in order to turn a profit, but quite important in that you will need to make sure that your broker does provide those options. Each broker is different in what they provide, so do compare notes to make sure that the signals that come through can actually be used within the trading platform that you have chosen.
Signals have become an extremely popular tool for helping new traders to start earning right away. They can also help seasoned traders earn even more than they would alone. When they come from the right source, there is certainly value in paying for such a service. With that being said, it is extremely important to completely evaluate any provider of binary options signals before paying for a subscription.
We hope that, by now, you have gained enough understanding of binary options trading as well as its important features. You may also have shortlisted some binary options trading brokerage firms to open your account with one of them.
Let’s talk about binary options trading signals now.
Remember, we said earlier that there are two basic ways in binary trading that may be used to decide which position to take for a particular asset. The first method is to gather all the relevant data from various sources and conduct a technical analysis of historical data to predict future price movements. This is the conventional method and, while it has its own uses, it may require a lot of experience, background knowledge, and time to conduct a successful analysis. In reality, many traders, especially the newcomers, may not have one or all of these but one of the important ones that you have to pay attention to is the best time to trade binary options.
The other way to predict price movements for binary option trade is via binary option trading signals.
These signals are generated by highly sophisticated computer software that has been created for a very specific purpose. Data, information, news, and the latest developments are continuously fed into the system. With the help of high-speed internet, big servers, and super processing speed, big servers, and super processing speed turn all the data into useful trading signals in real-time.
These signals are periodically transferred to the traders (via an email or notification), and the trader may decide to automatically or manually execute trades on the basis of these signals. The binary option trading signals provide single-line information about which position to take for a particular asset in order to earn profits.
These signals are usually time-sensitive. Hence, it is often recommended to execute these signals with the help of an automated trading software to ensure prompt exploitation of time-sensitive opportunities.
Many binary option trading platforms will provide such signals free of cost to traders who are registered with them. Similarly, there are some firms that specialize in binary signals, and a trader may subscribe to their signals in exchange for fixed monthly or annual fees.
The fees usually range from $5 to $250 for one month. However, remember that high-priced signals will not ensure better profitability. So, make your decision by carefully analyzing the track record of a service provider.
The goal of end of day binary options signals is to predict where prices will be at the end of a particular market session. In order to accomplish this, you need to have a heavy reliance on fundamental analysis and a decent understanding of technical analysis. Using a succession of call or put options is the best way to trade this, even if you find a boundary or touch option that you think would fit in with your goals. Calls and puts will almost always be easier to use here.
Let’s illustrate this a little bit better with an example. Let’s say you are trading within the U.S. stock market, and you are focusing on Disney’s stock. You know that the experts expect the company to rise by about $5 in the next year, giving the corporation a mild upward trend. If Disney is currently trading at $95 per share, but starts the day at a lower price like $94.50 for no easily explained reason, then you can now determine with technical indicators how far the company is likely to drop before bouncing back up. If that likely relative low is established, than you can take out a call option as the upward trend is the most likely outcome.
As you can see, this is a very generalized binary options signal at first, but you will specialize and become far more technical as you proceed. In fact, this is a really good thing to work with, most of the time. Starting with a general binary options signals framework helps you to narrow down your potential trade list, and then you can pinpoint better choices as you get more and more exact. This does take some time to establish, but the big benefit of working in this manner is that you get your trades done and out of the way so that you can focus your attentions elsewhere. If you have other trades to conduct, this gives you time to do them, and as the day progresses, you can keep a handle on how things are developing and uncover even more opportunities as you go. This will help you to use your time efficiently, and it helps you to hedge positions if there is an absolute need to.