A lot of people who have just started or are about to start trading binary options ask themselves the same two questions. “Why should I use binary option signals?” And “Are they worth their price?”. On this page I am going to try to answer both these questions in a way that will show you the value these signals provide and why every beginner should invest in a subscription to a good signal service.
Lets start by looking at the first question:
Why should I use binary option signals?
The short answer is that they allow anyone to trade like a pro. The long answer is a little more complex.
To earn money from day one
Binary options are high risk investments. You can earn or loose a lot of money very quickly. It is therefore very important that you get of on the right foot. If you start trading blindly you can quickly lose a lot of money. This can be a hard blow in itself but it also have the negative effect that it can make you turn your back on a potentially profitable type of investing.
It takes time to learn all the skills you need to become a successful trader that no longer benefits from signals. And even then it can be worth subscribing to signals because you are not going to be able to keep track of all trade-able assets yourself. Even experienced traders use and benefit from signal services since that allow them to find and act on more good opportunities than they can find by themselves.
It takes anywhere between one and several years to become a good trader that is able to find the all the opportunities in an asset themselves without the need for signals. Most traders who do not use signals end up losing money their first year of trading. It can take several years before they are able to turn a consistent profit.
Binary option signals are a short cut that allows you to make money from day one while you are still learning technical analysis and other methods to predict the market movements in an asset. This way you can avoid losing money during the first few years and consistently earn money even before you have learned enough to become a skilled trader by yourself.
It is only good common sense to let experienced traders help you get a good start by subscribing to signals that allow you to make good trades they find for you. If you subscribe to a signal service that has a success rate of over 70% and perform all the trades that are sent to you as signals than you are very likely to earn money over time.
A live signal service that allow you to watch the traders work can be a great way to improve your learning curve and will allow you to become a better trader faster. These signals are usually a little more expensive than other signals but are well worth their cost over time since they allow you to become more successful earlier in your trading career.
To be able to be a successful trader without spending a lot of time trading
To be a successful trader you need to analyze the market in detail. You need to follow it all through the day to see when the there are good opportunities to make money available in the market. This all takes a lot of time. Time that you might not have. Most traders have jobs to go to and can not sit in front of the computer analyzing market data all day. This makes it very hard to keep a high success rate.
Binary options signals solves this problem. For a relatively low sum you get a team of skilled market analyst working for you every day of the week. They do the work for you and notifies you when there is a good trade to be made. All you have to do when you receive a signal is to login to your account and buy the suggested binary option. If you want to you can even automate this part of the trade so that you do not have to do anything. If you use a robot to automate your trade then it will automatically purchase the option recommended in every trade. This can be very profitable if the signal quality is high.
Subscribing to a signal service is like having a dedicated team that are looking for opportunities to make you money. It is true that they will send the signal to several recipients but that doesn’t matter since all recipients can buy the same binary options with the same chance of making money.
Signals are a great way to be able to be a successful trader without having to devoted a lot of time to the trade.
Are binary options signals worth their price?
Binary signals can look very expensive at a cursory glance. This is not the case. If you look deeper into what signal providers really provide then you will discover that these services are actually surprisingly cheap. They could be priced a lot higher and still be worth their price for binary option traders.’
Good signal services are more than worth their price. Bad services are always a bad deal and never worth the price no matter how cheap they are. A good signal provider is a provider that has a success rate (win rate) of over 70% but you should always try to find a provider that has a success rate of closer to 80%. To not believe signals that claim a near 100% success rate. They are scams.
Lets look at an example to show you the true value of a good signal
- You are trading using a binary broker that offer a 80% return on options that ends in the money. There are several companies that offer a return rate that is significantly higher.
- You are using a signal provider that sends you an average of 4 signals a day over a 30 day period. They have a 75% success rate. The signal cost USD99 a month.
- You act in all signals that they send you.
- You invest USD25 in each option. You lose USD25 if the option matures outside the money. You gain 20 if it matures in the money.
At the end of the 30 day period you will have traded 120 options (30 * 4) with the following result.
(Calculated based on their average success rate. Actual result can differ month to month)
- 90 options matured in the money. This earned you USD 1800.
- 30 options matured outside the money. This lost you USD 750
Your result for the month is that you earned USD1050 (1800-750). You earned this money exclusively from the tips you received through the signal service. This means that for ever dollar you spent on the subscription for the signal service you got 10 and a half back. That is a bargain and make the signal service more than worth its price. It could cost USD500 and still be well worth the cost.
Remember that the example above is based on you investing a mere USD25 on each option. If you invested more in each option you would earn even more from the subscription. If you as an example invested USD100 in each option then you would have earned USD 4200 during the month but you would still only have spent USD99 on the signals.