Binary options trading signals are simply alerts, which help traders identify the correct time to place a trade/option. The signals also go ahead and advise the trader which is the correct trade (either a put or a call) to place.
Binary options trading signals are different from Forex trading signals in that the binary options trading signals are usually specific to the different expiry times ( 60 seconds, 5 minutes, 2 hours, 24 hours, etc.)
Trading signals are generated after a very thorough analysis of the market prices of the underlying asset. In most cases, signals are gotten after doing a combination of fundamental analysis and technical analysis of the markets. In most cases, the binary options indicators are used when doing the technical analysis.
Binary options trading signals are usually generated using professional trading strategies. Sometimes, a binary options broker may offer trading signals to the clients, but in most cases these signals are normally vague.
There are other dedicated binary trading signals providers on the internet, whose sole business is generating binary options trading signals. Most of them require the trader to pay some monthly or weekly subscription fee so that the trader can receive trading signals on a daily basis. There are however some binary options trading signals providers who offer free trading signals, although the trader will still have to subscribe.
A binary options trader should however be very careful when subscribing for binary options trading signals. The trader should remember that there are very many scammers out there and a thorough research on the signal provider is necessary. To know whether the signal provider legit or a scam, you can go through the reviews of other traders who have subscribed to the same services.
And even after subscribing with a signal provider, the trader should take some time to first trade using these signals in the demo account before using them on his/her real trading account. On the demo account, the trader can easily note the performance of the signals and decide whether to go ahead and use them in his/her real trading or discard them and look for a better binary options trading signal provider.
Advantages of using trading signals in binary options trading
1. Very minimal trading experience is required.
With binary options trading signals, the trader will require very minimal trading experience to be successful in trading. All the market analysis is done for the trader and his/her work is to interpret the signals provided and use them to place trades appropriately.
2. The trader gets the opportunity to trade with minimal stress
The trader is exempted from doing market analysis, which is the part that normally stresses traders.
3. Helps in risk management
When using trading signals, the trader is able to make more profitable trades. In actual sense, the trader is able to identify entry points better and thus end up making more profits than losses.
With binary options trading signals, traders tend to become more disciplined, especially if the signals are profitable.