April 25, 2024

How to Choose a Trading Signal Provider

Trading signals are considered one of the most important tools in the arsenal of every successful and profitable trader out there. Beginners, advanced and experienced traders alike use these trading signals for making decisions. As a matter of fact, there is an entire industry that has been built up around these signals and different trading recommendations. However, you need to bear in mind that as with most goods, quality should always outweigh quantity and this is also true in the case of trading signals. Quality trading signals are not those that tell you to enter into a particular trade, or can accurately tell you the direction of a trade.

They also provide you with detailed information regarding the configuration of your trade orders, including Take Profits and Stop Losses. Therefore, you have to ensure that you are getting quality trading signals, which means you have to choose the right provider for it. A quick search will tell you that there is certainly no shortage of trading signal providers, which means you have your work cut out for you when it comes to choosing one. How do you do that? There are certain factors you need to take into consideration and these are:

  • Availability of a demo account

When you begin looking for a trading signal provider, the first thing you should ensure is that they offer a demo account. Offering a free trial without asking for any payment is a good sign because it shows that the company is confident in its services and does not have a problem in letting you test their services before you sign up for an actual account. Of course, there are some providers that just might offer you signals for free and not charge anything in the future either, but bear in mind that this does not guarantee quality either, neither does a high price.

  • Check the track record

When you have to select a trading signal provider, it should be your priority to check their track record because this can tell you their performance quality and how they operate. If you are unable to verify the track record of a signal provider, it is best to steer clear. The more experience they have, the greater advantages they can offer.

  • Value quality over quantity

This has already been mentioned above, but it is a mistake that many people still make. Rather than focusing on the quality of the trading signals provided, they are more concerned about the quantity. How many signals do they provide in a day, or a week? Asking this question is a foolish mistake because it is the accuracy that matters, not the frequency. Also, bear in mind that trading more doesn’t mean that you will be able to profit more.

  • Consider the timeframes

There are four categories that can be found based on timeframes and trading signal providers generally fall in one of these. These are swing traders, day traders, scalpers and position traders. You have to decide what category you fall into and then look for a trading signal provider that can accommodate you accordingly. If you are a swing trader, but have signed up with a provider that caters to day traders, you will not be able to benefit from the signals you get.

  • Look at the time zones

Another important aspect you need to look into when choosing a trading signal provider is the time zone they operate in. You don’t want to get signals when you are sleeping. What would be the point then? Make sure you choose a provider that can provide you signals within your time zone, so you are able to take advantage of them at the right time and don’t miss out on any opportunities.

Along with these considerations, you should also look at the win rate of the trading signal provider and also how they send you the signals because you want to receive them as quickly as possible.

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