QUICK INFO: Binary options signals are trading signals which provide the specific information for binary options trading. Beginners who find the technical analysis or economic forecasts to complicated, but still want to make profit, often trade with binary trading signals. This is the easiest type of trading where no experience or additional education is needed.
There are many possibilities how to use signal based trading and different signal providers offer different types of signals. You can receive the trading signals by sms or e-mail and enter the trades based on the exact instructions on what asset to trade at what level and when to set the expiry time. Some signals are based on algorithmic calculations, others are provided by experienced traders. You can also follow live trading of professional traders and copy their trades on your own account. Each signal service has its own system and profitability statistics. There are many providers to choose from, so you can easily find a signal based system that suits your own needs and profit goals. If you just follow the signal service instructions, you don't have to know anything about trading to be able to make profit.
There are several types of binary options signals which can be categorized in following groups:
Classic binary options trading signals provide the exact information about what to trade, when to place the trade and in which direction and exact expiry time of the traded option. The services as such provide the following information:
- Traded asset (for example EUR/USD)
- Trade entry time (for example 15:45)
- Trade entry price (for example 1.27300)
- Trade direction (UP/DOWN, CALL/PUT, HIGH/LOW)
- Trade expiry time (for example 16:30)
There are many providers of this most classic type of binary options signals and each service can be a bit different. Usually these types of signals are sent to user by e-mail or SMS, but can also be provided on the provider website in the members area section. The differences between services are the following:
- Average WIN/LOSS ratio (for example 68/32 or 68%, etc ...)
- Average number of monthly signals (for example 100 or 300, etc...)
- Time of sending the signals (random throughout the day, every day at exact time, at specific times or trading sessions, etc ...)
- Expiry times (different for every signal, always the same, end of day, etc ...)
- Signal delivery (e-mail, SMS, website)
When choosing a signal service of this type a trader should consider if the type of service, performance projections and type of information they provide suits his trading requirements and trading style. Not all signal providers are compatible with all trading platforms (brokers). Other signal services will send the signals via SMS or e-mail several times per day at random times and with random expiry times. If a trader is using this type of signal service he should consider trading with a broker who offers mobile trading, so he is able to place the trades at any time when he receives the SMS via the mobile app. Example of such service is Real Binary Options Signals. Not only the signal service performance, but also compatibility of the signals with the broker should be one of the main factors to consider when choosing a signal provider.
Electronic adviser (EA) and algorithmic signals, are offered by signal services who use different trading indicators to calculate the signals and generate them in real-time. Such signals are usually provided directly on the providers websites and will usually provide the following information:
- Traded asset (for example GBP/JPY)
- Signal strength or probability level (80% for example)
- Trade direction (UP/DOWN, CALL/PUT, HIGH/LOW)
- Suggested expiry time (for example 60sec/5min/short term, 15min/1h/long term)
When choosing this type of signal service a trader should understand how the signals are generated and in what type of market they perform best. These type of services usually provide many signals that are constantly generated, so additional filtering is always advised. There are a few options of additional filtering of the signals, but usually they are based on technical analysis charts or data. Examples of such services are Auto Binary Signals which generate the signals based on price breakouts and trend predictions and Algobit Signals which generate the signals for market reversals in overbought or oversold market conditions. Normally these type of signals are provided for short term trades and longer expiry, so they are compatible with any broker. Many brokers also provide different versions of algorithmic signals or trend predictions withing the trading platform, which can also be helpful when making the trades. However it is not advised to trade based only on the predictions offered by the broker. To emphasize again, each type of algorithmic signals is based on different indicators, so the trader should always test the signals performance in different types of market conditions to be able to get the best performance out of the service. Additional filtering of the signals and confirmation of trades is always advised. To understand more about these types of binary options signals and some of the signals filtering options watch the Algobit Signals Strategy or Auto Binary Signals Strategy.
Live trading rooms and real traders signals or social signals allow users to watch and follow professional traders and copy their trades on their personal trading account.
This type of signal services can be especially useful for beginners, since the users are able to watch the experienced trader perform the technical analysis and make the trades based on his technical analysis trading strategy. Exact trades can be copied on live trading account or on the demo and with time a beginner trader will be able to learn at least the specific technical analysis system used by the service provider. Other option of following the real traders is the use of 'social signals' offered by some services. These services work by sharing the signals between traders and experienced traders can 'sell' their signals to traders who want to follow them. Normally the performance is monitored and if you sign up for such service you will be able to see how the individual trader's signals performed in the past. An example of popular live trading room is also the service called Binary Options Trading Signals Live and another example of rapidly evolving social signal service is Trade4me Signal Service. All three services will provide a trader with exact instructions on what asset to trade, direction of the trade and expiry time.
Trading bots or 'binary options robots' provide similar information as algorithmic signals, but can also automatically enter the trades based on the predefined settings by the user.
Trading bots are a version of algorithmic signals with additional possibility to adjust some of the indicator parameters generating the signal and other money management strategies such as regular, martingale, fibonacci, etc. Trading bots can be useful once they are set up properly, and based on their algorithms, they should be used in specific market conditions. Some bots perform better in trending markets and others perform better in ranging markets. Some bots will look for only very specific situations such as large price jumps or drops and will enter the trades only in these situations. Again, different product offer different possibilities and flexibility, and it is strongly advised to analyze the binary options bots in different market conditions and with different settings, to be able to reach the desired degree of profitability and minimize the trading risk. Binary options robots can be an alternative trading possibility, especially convenient for traders who do not have the time to trade by themselves. But exactly because of their nature of automatically placing the trades, special caution with parameters settings and height of investments is advised. Also, each bot should be monitored for some time, for the trader to be able to tweak and confirm its performance before letting it place the trades completely hands-off. Currently the most popular trading robot is Binary Option Robot.
The most useful signals, recommended on this website, where the traders have the most control, would be algorithmic signals. To learn more about two possible strategies of using such services watch the Algobit Signals Strategy or Auto Binary Signals Strategy.
There are many binary options signals providers in the market and majority of them do not achieve the advertised results in real performance. However there are a few recommended choices, if you understand how to properly use them. To avoid bad signal services and see the list of bad services read the article about Binary Options Signals Scams.
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