Binary signals can be said to be tips on trades that the signal provider thinks offer high value. When the signal provider identifies a good trade they send out an alert. Different signal subscription focus on different types of trades and provide different information. There are both free and paid signal services. A third alternative is signals that are free fore traders that have purchased a certain trade system.
We recommend that you do your own research or get your signals from a good paid signal provided. Free signals are usually not very good.
Lets look a little closer on the different types of signals for binary options.
Lets start by looking a little closer at the free option. It is very easy to think about free signals as a cheap signals. The reality is however that they are anything but a cheap alternative. A cheap signal is a good signal. This is true almost regardless of the price you pay for it. This is due to the fact that you cant just look at the up front cost. You also have to consider what result they give you. Every single signal that you act on that turn out to be wrong cost you money. The success rate cost is usually a lot higher than the actual cost of a signal. The only way to evaluate the true cost of a signal service is to look at their success rate. A signal service usually need to have a success rate of above 55% percentage to be worth the money. The higher success rate it has the higher value the service offer and the cheaper it actually is. Free services are often not as good as paid services. This is due to the fact that free services has nothing to loose by offering a poor service. A paid service is therefore usually a better choice.
Companies that offer paid signals need to make sure that their service is good enough for people to feel that it is worth to pay for the service. The price of signals can vary a lot but you will usually have to expect to pay at least $99/month for a high quality signal. There are some signal services that are a lot more expensive. Most signal services welcome new customers but there are a few that are available by invite only. It is not unusual that binary option brokers offer their VIP clients (usually clients with more than $50 000 in their account) free access to different signal services that otherwise would cost you a lot of money,. When you choose a signal service you should look strictly at their success rate and ignore their monthly price. The price does not matter if the service allows you to earn money.
There are two different types of signal services. Does that only provide their own signals, signals from one source. The second type is services that collect their signals from multiple sources and only alert you when several sources recommend the same trade. How many sources that need to recommend a trade for you to receive an alert varies between different services.
It can be a good to be a member of several signal services and compare their recommendations to make the most informed decisions possible.
What to think about when choosing a services
You should always strive to choose a successful well established services. New services that comes on the market can be very good but it is a good idea to be a member of at least one established service. This does not mean that you cant try the new service as well.
It is very important that you understand how the service you choose work. Are the signals based on technical analysis or some other type of analysis. A good service usually provide good information on how they produce their signals. This does not mean that they tell you the exact methods they use. Quality services provide additional data such as graphs or other data to show why they recommend a trade.
A good service should provide historical data so you can see their historical record.
You should always consider the following factors when you choose a signal service.
- How many signals to they issue: How many alerts you get each month greatly affect how much value you can get from the alerts. More alerts are not always better but you need to be provided with enough alerts for the signal service to be worth its price. How many alerts you need to get each month to justify a subscription depends on the size of your investment and the success rate of the signals provided.
- Success rate: The success rate is key for you to be able to earn money form the signals. The higher success rate the better. It needs to be at least 55% for you to make money. (the exact break even rate needed depends on the broker you use).
- The additional data provided: The better data they provide the easier it is for you to evaluate the signal.
- Price: The more expensive a signal service is, the better the service need to be for you to be able to earn money from the alerts provided.