What is a Signal Provider?

[Paul Beck]

[Steve Walters]

A signal provider is any person or company that provides traders with automated trading advice (signals). In the early days the signals were primarily in the forex market, but more recently they have expanded dramatically to include commodities, stocks, bonds and other asset types. This is in response to the growth of social trading services such as Zulutrade and eToro. This new breed of signal provider is nothing more than individual traders in most cases. They register on the social trading sites to become signal providers and once approved other traders follow their trades. This has become known as mirror trading or copy trading, but it is nearly identical to traders who previously received their signals via email or SMS. Generally you’ll find that signal providers follow three strategies, or combinations of the three basic strategies. These are as follows: Technical Indicators – These signal providers use indicators to tell them when an asset is overbought or oversold, and what levels are best to buy and sell. The common and popular technical indicators include moving averages, relative strength indicators, MACD, Fibonacci levels and others. A signal provider who uses technical indicators might do so programmatically, by creating a robot that trades automatically based on rules taken from technical analysis. Fundamental Analysis – This type of signal provider uses the news to create their predictions. This might be economic or political news. Signal providers who use fundamental analysis usually have a much longer time horizon because news items can have longer term impacts on the price of assets. Some very good examples of news that fundamental analysts would use is interest rate changes from central banks, or changes in trade policies. Price Action–The signal provider that uses price action isn’t concerned with technical indicators, nor are they interested in news items that might move the market. They believe that everything they need to know about price movements is already contained within the current price action of the asset. So, the price movements on a daily, weekly and monthly basis give indications of future price movements. The good thing about these different methods for analyzing the market and providing signals for traders is that you can diversify the signals you use by choosing signal providers who use different methods for creating their signals. For example, you might be interested in trading forex. By signing up with signal providers that use technical, fundamental and price action you can compare the signals from the three types of providers and place your trades when two or all three agree, thus increasing your chances of success.

[Becky Lord]

Hello Paul,

Signal providers are human Forex experts or AI trading systems that provide investors with timely trading opportunities after analyzing technical indicators. Because they contain actionable information like stop-loss levels and in and out points, the alerts are perfect for beginners. For experienced traders, the signals reveal hidden opportunities you would have otherwise missed. You can either pay for the signals or get them free of charge.
Needless to say, paid signals are more comprehensive than their free alternatives. Even so, ensure your profits exceed the signal fees. Though they don’t have monthly charges, free providers will recommend a brokerage, hence, earning a commission when you trade. The accuracy of these prompts is not guaranteed because of market volatility. That’s why you should develop risk management strategies. Don’t forget to look into your provider’s history to gauge their performance. Go back several years and concentrate on how they handled major crises.

[Leah]

Hi Paul,

Thanks for coming here.

When you are trading, be it Forex, stocks, commodities, or any other asset, you will need to know the action to take-whether to sell, buy, or hold.

You get this information by using trade signals which you get either on your own, from another person or a software. This person or software is the signal provider. You can get the signals either via email, SMS, or alerts on your devices. Trading signals can be either paid or free, with the former being more reliable.

The signals will help you get truthful information and save you the hassle of scrutinizing the market yourself.

You should thoroughly research your chosen signal provider to get to know their performance well before engaging them. You can examine the reviews users have left behind. This is to avoid getting scammed or getting vague signals.

The most important thing to check about your signal provider is that they have a public and proven track record confirmed by an unbiased third party. Remember also to check their charges as well as their ranking.