Binary Options Signals
Binary options signals, which are also referred to as trading indicators or alerts, are very popular amongst binary options traders. With the help of binary trading signals both novice and expert traders can easily accelerate their profits and find strategies which can help them generate steady income.
In this article we will cover the following topics:
• Definition of binary options signals
• Why traders choose to use binary options signals?
• The difference between trading robots and binary options signals
• How to choose the right binary signal provider?
• How to find the most effective binary signals that do not cost a fortune?
• Can I really profit from binary option signals?
• Do binary signal providers offer free trials?
This article will provide you with all information you need to have in order to use binary signals in a right way, find reliable signal providers, apply proper money and risk management strategies to your trading and improve your trading performance.
Definition of binary options signals
Binary options signals are great tools that can help traders identify best market entry points and profitable trading opportunities. Binary signals simplify trading process and allow traders to avoid in-depth study of technical indicators and learn economic analysis. Signals predict direction of the price movement at the given period of time. Normally signal providers also indicate a recommended entry price and acceptable deviation from this price, leaving traders with the simple task of executing the trades according to the signals they receive.
Nowadays there are hundreds of signal providers in the market offering various types of trading indicators, which can be delivered via integrated software, live video stream, emails, Skype or phone. They also vary in the assets they use for generating their signals, the number of signals, expiry times and other parameters.
A typical signal looks like this:
EUR/USD CALL 1.2455 Expiry 15:00 GMT
The information in this simple signal is everything we need to know in order to execute a binary trade:
• The signal applies to the EUR/USD currency pair.
• The indicated direction reads CALL, meaning that according to the signal the price of EUR will increase by 15:00 GMT. PUT signal indicates the opposite direction, which means that in our case the price of EUR would fall by expiry compared to the strike price.
• Expiry 15:00 GMT indicates the expiry time of the option. For example, if you receive the signal at 14:00 GMT, your signal provider predicts that the asset price will rise by 15:00 GMT.
Also, please note that this signal is issues for the standard CALL/PUT option type. Let’s not forget that some signal providers also generate binary signals for turbo options, for one touch, long term or other types of options. You might need to check with your signal providers what types of options they include in their signal packages and ask them to give you a sample of the signal format.
Another important thing to keep an eye for is a binary signal strike price. If you receive the signal with the delay and the current price moves away from the given strike price you need to apply sound judgment to your investment decision. Sometimes it would be wiser to skip the signal and wait for another one with better entry price.
Signals are executed on the trading platforms of binary options brokers. You will need to sign up with one if you still haven’t done that. Choosing a right broker is a subject of one of our articles. Also, for you convenience we have prepared a rating of the most reliable binary options brokers, available on the market today.
Why traders choose to use binary options signals?
Binary options signals give traders some serious advantages. Let’s discover what signals can do to your trading performance.
1. Binary options signals help beginner traders to generate profit without having any knowledge or experience on financial market. When newcomers first enter the binary options scene, quite often they are too excited about the trading itself and they underestimate importance of learning technical analysis, fundamental analysis and money management techniques. Without trading signals, beginner traders need to come a long way before they find a trading strategy, that works for them.
Learning process takes time, efforts and money. Unless you have Ph.D. in economics and understand the markets, this process may take a while. And the worst thing that can happen to you during this time is financial loss that can lead to frustration, disappointment and even worse results due to stress factor and lack of confidence in trading decisions. That is the reason why majority of traders quit trading within the first year before they manage to generate any profit.
That is why binary signals are considered the best tools for the beginner traders, as they give them the taste of successful trading right from the start by using knowledge and expertise of professional traders. Steady profit and ease of use are the main advantages of binary signals, which appeal to both experienced traders and newcomers.
2. Quick execution and ease of use makes binary signals a universal toolBinary trading is a time consuming activity and sometimes even experienced traders do not have time to analyze market for hours. Trading requires concentration, distraction-free environment and right timing. Mistakes which happen due to lack of preparation can cost a lot of money and should be avoided by all means.
On top of that, a trader can monitor only one or two assets at a type. A signal provider is using sophisticated analytical software, which allows to analyze multiple assets at the same time and make high accuracy predictions.
Most people have day jobs and they rarely quite them the moment they decide to become professional traders. Normally they take their first steps in trading while they are still employed in order to supplement their income or turn trading into their profession in the future. The lack of time can be a problem even for the most enthusiastic beginner traders.
On the other hand, if you trade with the help of binary signals you do not have to monitor markets and can trade even on the go using your mobile application. It is a matter of a few seconds to receive a signal and place a trade on your Apple or Android device wherever you are, as long as you have Internet connection. You can do it at work, in a traffic jam, in the restaurant etc. Binary signals allow traders to spend more time with their families, travel, and play sports instead of being glued to their computers for hours.
The difference between robots and binary options signals
If you do not want to be involved in the trading process, you may go one step further and choose automated trading, also called binary options robot. Trading robots not only analyze markets and generate trading indicators, but also execute trades on the trading accounts opened by traders with binary brokers.
Let’s have a look at all advantages and disadvantages of binary robots
1. Full automation of trading process. Robots execute trades without traders’ participation in the process. With the signals, a trader has to assess the signal first, then take a decision and place a trade. Every trader should carefully consider if he wants to rely on the robot’s judgment, or if he wants to control and execute every single trade on his account.
2. Robots are compatible only with certain brokers. Robot providers work with limited numbers of brokers whose technical parameters are compatible with their settings. In order to place trades on traders’ accounts, robots need to have integration with the certain brokers. So quite often traders have to open account with brokers recommended by the robot providers. If you prefer to trade with a certain broker, which is not connected to that particular robot, you will have to make a choice whether you want to look for another robot or change a broker. In this respect signal providers are more flexible. Normally their signals are compatible with all brokers, with exception of the platforms that do not have required expiry times.
3. Risk of compromising your broker’s account safety as there is a third party, which is a robot provider, involved. Signal providers do not require disclosing of any information about your trading account. You are free to place trades based on signals or open positions using your own judgment about market movements at any time. If you trade with the robot, you will be asked to provide access to your account, which enables the robot to use your money. The good thing is that you can control robot’s settings, and deactivate it at anytime. But if you neglect to control the robot, you are basically putting your money in the hands of robot provider, so it is always a good practice to closely monitor trading activity executed by the robot and change settings when required.
You should consider all advantages and disadvantages of binary robot trading as compared to signal trading and choose what tool you prefer. Further information about robots and their providers can be found in the robot section of our website. Rating of top binary robots is also available for your convenience.
How to choose the right binary signal provider?
With hundreds of binary signal providers to choose from, for novice traders understanding the difference between their services can pose quite a task. Let’s have a look at major differences between the signals and their providers.
1. The way signals are delivered to the traders
Signal providers can deliver their binary options signals to the traders in a number of different ways and in different formats. One of the most important aspects of successful trading with the help of signals is their timely delivery to the trader. Even a slight delay can turn into a failure especially during the time of volatile market. The most effective means of delivery are considered to be Skype and live stream which are associated with the minimal delay time. Text messages or email can be quite effective as well, but signal providers always should indicate the time when the signal was issued, and traders should pay close attention to the strike price and option expiry time. Signals delivered by the phone are associated with increased delay and possibility of error due to misinterpretation of voice message.
Another thing that is very important for the trader is a binary option signal format. As mentioned earlier the most popular is the format EUR/ESD CALL 1.2455 Expiry 15:00 GMT, where EUR/USD is an asset, CALL is a direction of price movement, 1.2455 is a strike price and 15:00 GMT is the binary option expiry time.
Some signal providers offer so called copy trading. They do not only generate signals, but execute trades before your eyes, allowing you to watch their experts via live video stream. Some signals come with the analytical report, thus explaining trades why the signal was issued. This is very useful for traders as this way they can judge the accuracy of the signals and at the same time learn some important aspects of technical analysis. But note that binary signals delivered via live video stream may require you to invest a lot more time, as usually they are combined in trading sessions with may last for several hours once or several times a day. On the other hand, it is always good to see experts who analyze the market, issue signals and at the same time explain why the signals were issued on your computer screen. It gives some personal touch and allows to build trust and confidence.
2. Accuracy of binary option signals
Most signal providers claim to have the accuracy of their trading signals in the range of between 60 and 95%. These numbers normally apply to their daily, weekly or monthly statistics. The truth is that some signal providers are more accurate than others, but at the same time performance may vary due to markets conditions. Our advice would be to look for consistency rather than high accuracy. It is better to generate smaller profit on regular basis rather than having 100% accuracy one day and 20% the next.
When comparing the accuracy of signal providers, you should always take your time to monitor their performance for a certain period. Remember that it is ok to have losing signals as long as the winning ones prevail and you close your trading day in the money.
3. Binary assets used by binary options signals providers
If selection of assets or asset types is important to you, you need to ask your binary signal provider about the range of assets they generate binary signals for. There are hundreds of currency pairs, stocks, commodities and indices traded on the binary market, and you can hardly find a signal provider that issue signals for them all. Most binary signals providers generate signals either for currency pairs, such as EUR/USD, EUR/JPY etc., or for popular stocks, such as Apple, Google. Microsoft. There are a few providers that concentrate on commodities, such as Gold, Silver and Oil.
A signal provider that monitors and analyzes many assets within one asset class and generates moderate number of signals will likely create signals of high quality due to its selective approach.
4. Number of binary options signals generated daily
Numbers of binary options signals generated by different signal providers may significantly vary. It can be anything between 5-10 signals per day and 200 signals per day. Every provider is facing a choice of delivering only high-grade signals with high probability of win, or mixing them with the signals, which have less probability to turn into a successful trade. This is a dilemma of quality and quantity.
• Traders that want to minimize their trading time and have consistently good results should choose signal providers that send only high-grade signals. Such signals help traders save money, time and simplify trading process. But you need to have a good alert system and ability to enter markets from your mobile device, as such signals with high will rate may be delivered to you during different time of the day, when the market presents such opportunity.
• Traders who want to maximize their profits and are willing to spend more time placing trades should choose a signal provider that sends more signals.
Quite often providers inform their traders that they should take all signals included in their trading package in order to achieve a success rate, stated by the provider. Therefore, every trader should carefully consider the time he is prepared to devote to trading, as well as time when the signals are delivered. For example taking only 2 or 3 signals our of 10 signals offered by the provider might be not the best idea, as it increases the probability of loss.
How to find the most effective binary signals that do not cost a fortune?
The price of binary options signals varies from one signal provider to another and depends on the package you buy (number and type of signals, period of use, win rate, additional benefits, etc.) Most signal providers sell their signals on a subscription basis, which means that you pay a fee for a certain period of time (weekly, monthly, quarterly, etc.) for as long as you are using the signals. Average cost of high quality signals from reputable binary signal provider starts from $250 per month and can be as much as $2000 and more.
As an alternative to subscription, some binary signal providers offer free signals to those clients who deposit money with their partner brokers. In this case signal providers get paid by brokers for referring clients to their business, and traders may enjoy free service. This is a very attractive option for those traders who do not have a preferred broker and are willing to open a new account.
You may pick the option that suits your trading needs the best, but make sure to test the signal provider before you make financial commitments. Amongst criteria to look at are reputation of the signal provider (read online reviews, ask about that particular provider on binary forums), cost of signals, brokers they recommend and additional benefits they offer such as video stream, education and customer support.
Can I really profit from binary option signals?
Binary options signals simplify trading, and increase win rate, but they also cost money, unless you get a free package and invest with the broker, affiliated with the signal provider. Not every trader is willing to change a broker so most likely the extra expense is inevitable. If you are a beginner trader and do not know how to analyze market and make prediction yourself, signals will make a huge difference for you. We can say that binary options signals are definitely worth the money for most newcomers. You can start profiting from the start while you are still learning the ropes.
If you are an experience trader looking for a way to boost profitability, you need to compare your personal results with the results of you signals provider and see if the increase of win rate is worth the money you are paying to your binary signal provider as subscription fee. The good news is that if your signal provider demonstrates consistent performance you may compound profits on your trading account balance and gradually increase trading amounts. As a general rule, you should not invest more than 5% of your account balance in a single trade, so with the growth of your balance you can trade higher amounts, generate more profit and in this case the signals will be certainly worth the money you are paying as subscription fee.
Do binary signal providers offer free trials?
There are hundreds of binary signal providers and finding a trustworthy and reliable company can be a difficult task. Signal provider do not share their analytical techniques and trading strategies, so you may judge signal providers only by the quality of their signals and customer support. That is why reliable providers offer free trials of their signals or guarantee money back if the signals do not work for a trader.
1. Our experts have tested all signal providers featured on our website, so you may rely on our reviews and comments of your fellow traders. We recommend reading the reviews as a first step to everyone.
2. Sign up for a free signal trial. It can last from one day to a week, so you have plenty of time to test the accuracy of signals. We recommend testing signals on a demo account opened with a broker, or paper trading. Most binary options brokers offer demo accounts so you can trade with demo money instead of real money. Demo accounts provide you with the ideal environment to test a signal provider’s signals without risking your money. If you do not know what brokers offer free demo accounts you may ask your signal provider to recommend you a broker or read our brokers reviews. If signals work for you on a demo account you may open a live account, buy a signal package and start real trading. If the signals do not work for you, ask you signal provider to give you a hand. Many traders make a mistake by discarding a signal provider as soon as they lose a few trades, without looking into the reasons of loss. Sometimes the loss can be attributed to the fact that a trader is applying signals in a wrong way (wrong expiry time, opening a trade with delay, etc), so it is always a good idea to speak with your provider during the trial.
3. Many binary options signals providers publish records of all their past signals on their websites. It is worth checking the statistics before signing up. That information is public and monitored by thousands of traders who receive signals from that provider, so the chance that this information is not correct is very remote. Nonetheless, we always recommend doing a trial before investing money to make sure that signals work for you.
We hope that this article was helpful and now you know how to choose the best binary options signal provider. Check our binary options signals rating prepared for you by our experts and enjoy the results!