Binary Options Trading Signals
Origins of Binary Options Signals
Anyone who has spent valuable time trading the markets will immediately acknowledge that it consumes a whole lot of time and effort. It is very difficult to hold a day job and give trading the full attention it requires. It is also difficult to learn how to trade profitably as it requires a thorough understanding of chart analysis, interpretation of news events, adoption of positive trading psychology plus a whole host of other factors.
Time or a lack of is one reason, most people are inherantly lazy and will always take the easy option, some just can’t really be bothered to do the work and would rather pay someone else! This demand fuels the binary options signals industry.
Methods of Delivery
Binary options signals need to sent out to traders real time so that they can act on the signal immediately. In binary options, a single pip can make all the difference and a wrongly timed, delayed entry can make the difference between a profit and a loss.
There are 3 usual methods of delivery:
- SMS: Here, providers send out trade alerts to subscribers using text messages. They are fast and provide for instant delivery. A modification of the SMS is the use of push notifications in smartphones. These require the subscriber to provide either a phone number (for SMS) or to subscribe to the trade alert app (for smartphones). The disadvantage is that sometimes, network providers may have issues that lead to delays. Otherwise, this is the best system as studies have shown that most people will always have their phones by their side.
- Email: The email was one of the first avenues used to send out trade signals. Emails can sometimes end up in the spam folder, causing the trader to miss the trades entirely. For the purpose of trade alert delivery, emails are not the best method out there.
- Website: Some providers create a members’ area on their websites where signals are then pasted and can only be accessed by those with active logins. Unless the signals have a large window of opportunity within which they can be used, it is not the preferred method.
How to Select a Good Binary Options Signals Service
Many binary options signals services will claim fantastic results on their websites. However, there is no way to independently verify these claims. As such, the only weapon the trader can use is the free-trial. The free-trial period is a period where a signals provider allows the trader a few days to test the signals service. Most providers will make a small charge (between $5 and $7). Use this time to thoroughly evaluate the trading signals using a binary options demo account. This will enable you gauge the claims made by the provider and see if they stand up to scrutiny. Do not sign up with anyone who does not provide a trial period.
Also look out for providers that can give out money-back guarantees. This allows the trader to use the service and evaluate returns against what is paid as subscription fees. If it is not worth it, use the money-back guarantee to claim your funds back.
It is good practice to try out the first month of a signals service on a demo account. That way, even if the signals are unprofitable, your loss will only be limited to the subscription fees paid.
What is a Good Win-Rate for a Signals Provider?
In binary options trading, you need a minimum of 58% win-rate to break-even. This means when looking for a signals provider you should be looking for at least 60%-70% average win-rate.
While the majority of signals and auto-trading sites will be complete scams, reputable signals providers should offer an average win-rate of 60-70%. You should avoid anyone who claims to have a win-rate above 80%, as this is practically impossible.
Does the Opening Price for a Signal Matter?
Yes. The opening price is important because you need to make sure you place the trade in time before the price moves out of your favour. Most signal providers will give you an opening price to take the signal. It’s important you check your broker’s platform to make sure their prices are close to the signal provider’s. Otherwise, you could end up taking trades that finish out of the money when your signal provider finishes in the money.
What’s the Best Way to Check Binary Options Signal Providers?
There three main ways to check out binary options signals providers:
- Ask to See Proof of Results: This is the most important thing to look out for. If they don’t provide any proof on their website, make sure you ask for proof of a signal provider’s results before you risk your own money. This should either include a table documenting their trades and results or screenshots of their trading accounts taken over a long enough period of time.
- Search for Reviews on other Forums, YouTube and Sites: It’s always a good idea to search for reviews of signal providers on other sites, especially forums and Youtube. Forums are best because you can get feedback from other traders that have used the system. Youtube is great because you can see videos demonstrating the performance of the signal service before you pay for it.
- Use a Demo Account: You should try to use a demo account wherever possible before you risk any real money on a signal service.