Some binary option traders incorporate binary option signals in their trading strategy. There are many different companies that will provide you with signals – free or for a fee. Relying solely on signals can be risky. It is better to learn the basics first; once you are more familiar with binary options trading it will be easier for you to determine the quality of various signal providers. You will also be able to evaluate individual signals with a critical eye.
Free binary options signals
Companies that provide free binary option signals need to make money some other way, and many of them do this by encouraging or requiring their clients to sign up with and use a specific binary options broker. Always evaluate the broker before you make any decisions. It is better to pay for signals – or not use signals – than being stuck with a broker that isn’t suitable for you.
Single-source vs. multiple sources
Some signal providers obtain their signals from an individual analyst or an individual signal generator system. Others provide a service that compiles signals created by several analysts and systems. Some of them will only send you a signal that has been recommended by several sources.
If you are interested in paying for signals, it can be a good idea to start by signing up with providers that will give you a free or heavily discounted trial. This way, you can evaluate the success rate of the signals before you proceed any further. You don’t even have to risk any money trading, simply set up a demo account with a binary options broker and let the signals you receive guide your trading in the demo account. Are you making money? Are you losing money?
Some signal providers are hesitant to offer free trials because they know that they are providing low-quality signals and that clients are unlikely to return for more after the free trial period.
What to look for
Here are a examples of points to keep in mind when looking for a binary option signal provider.
- What do you want? Entry, exit and stop loss figures? Exact figures or just guidelines? Do you want supporting information too, e.g. technical analysis? Supporting information can make it easier for you to filter out bad signals.
- Price, number of signals and signal frequency. These points tend to be tied together. How much are you willing to pay?
- Is the provider willing to share past performance history? How often is this signal service correct? Can this history be verified by independent sources?
- Is it to good to be true? Is this signal provider essentially promising you instant success; huge rewards with hardly any downside? Does the provider seem to be oblivious to the risks involved?
- How is the provider making money? Will you be forced to sign up for any paid third-party services or make deposits into a broker account? Is this a subscription that can be cancelled any time, or are you signing up for a 3-month package, 12-month package, etc?