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What are the qualities of good binary options signal providers?
When trading, signals will provide traders with a forecast of an asset that allows them to judge the asset’s behavior. There are signals for CALLS and PUTS that will allow traders to make money.
With so many signal providers offering professional trade suggestions and their own binary options strategies, it’s important to know what qualities a provider should have. Few signal providers will have all of the qualities listed below, but most will have a mix of qualities in their offering.
The following 8 qualities are what should be sought in a signal provider:
1. Market Choices
Traders should not be constrained to just one market. Some traders will want to trade on the U.S. market, and others on London markets. Always look into the markets that are provided in signals. If someone prefers trading in the London market but only receive U.S. updates, the provider is obviously not a good fit for their trading habits.
The types of assets (as seen below) will also need to be considered. More market or market choices provides trades with more options to make money.
2. Multiple Underlying Assets
Some traders only want to deal with currencies. Others want to deal in stocks, and others want to deal in indexes. When signing up with a signal provider, ask about their underlying assets. If a trader only wants to deal in currencies, there are signal providers that offer this option.
New traders that are unsure of their preferred trading choice should pick a provider that offers an array of underlying assets.
However, advanced traders that only want to deal in currency, for example, will find a signal provider that only offers currencies to be the best option. Multiple currencies will be provided with nearly every signal provider.
3. Accuracy Rates
Trades are all about accuracy. If signals are not accurate, traders are wasting their time – and money. There must be accuracy rates provided to users. These rates are the average, often updated frequently, that the signal provider has been correct with the signals they provide their subscribers.
If a provider does not provide accuracy rates, traders should run the other way.
Note: No one can offer 100% accuracy. Ideally, an accuracy rate of 70% or higher is preferred.
4. Real-time Signals
Binary options trading is about making timely trades. If a trader has to wait too long, they’ll:
- Pay more money making a trade
- Risk losing profits
- Risk missing the optimal trading window
- Risk losing a trade
Real-time signals are a must. Real-time should be within a 5 minute window of a signal being made by the provider. If a provider doesn’t send timely signals, there’s no way they can maintain a high accuracy rate across the board.
Using the right signal delivery method, a subscriber should receive their signal within a few minutes at most. Always ask about the time between signal creation and delivery before signing up for a provider.
5. Signal Delivery Method
There are so many signal delivery methods that traders need to consider. What method works best? It’s truly a personal preference. Some users prefer dashboard delivery, while others may prefer SMS.
Knowing the delivery method that a provider offers is essential to success. There are three common methods of delivery:
- SMS: Text messages are ideal for the casual trader that isn’t on a computer at all times. While slower than a dashboard, SMS can be received at any time and is very convenient.
- Email: Much like SMS, email notifications are convenient and don’t require users to remain on a signal provider’s dashboard.
- Dashboard: The main benefit of a dashboard is that there is no delay between signals being sent. A dashboard will display updated signals automatically to provide the utmost in accurate trading.
Many providers will offer a mix of signal deliveries. For accuracy purposes, dashboards are recommended. However, for the busy trader that may not be on the computer at all times, SMS is definitely a strong alternative.
6. Signal Frequency
A binary options signal provider must clearly display their signal frequency. This is the amount of times, per day, that signals will be sent to traders. This is always an estimate. Some days, trading will provide 100 signals, and other days, activity is much slower.
What frequency should be expected?
This is a good question. Frequency is only good when accuracy is upheld. It’s better to receive 12 good signals with 80% accuracy than 100 signals with 60% accuracy. With that said, a lot of signal providers will offer up to 100 signals per day. More signals means that there is more opportunity to make profitable trades.
If signal frequency is not clearly listed, traders should avoid the company.
7. Professional Strategies
A good binary options signal provider will use algorithms that incorporate strategies developed by professional traders. These algorithms take risks into account and are frequently updated to improve accuracy in an ever-changing market.
When indicators are developed by experienced professionals, users can rest assured that the information they receive is provided by experts who know and understand how the market works.
These experts know what to look for – and what indicators may make a trade risky.
An active development team should provide new strategies and indicators into their platform to ensure accurate signal suggestion.
8. Reports on Accuracy
Reputable signal providers will also provide accuracy reports to users. These reports demonstrate whether the provider’s signals were spot-on, or completely off. Accuracy reports do more than demonstrate a provider’s competency. They also offer a unique opportunity for the provider to improve its algorithms. Of course, signal providers with impeccable accuracy can also use these reports as proof of results.
When a company is willing to share these reports, be it good or bad, it demonstrates that they take a transparent approach to business. It also shows that the provider is not afraid to admit their mistakes and will take steps to continue improving their service.
Some providers will even provide past and current (often daily) reports. This allows users to see how the current signals are performing.
Will all providers have all of these qualities? No. Some will only focus on one market – this isn’t a bad thing – and others will provide different methods of signal delivery. The most important quality or metric that a provider can have is accuracy. With accuracy, a trader will be able to make a smart, profitable trade while keeping risks low. This is what every trader wants with their signals.