A trading signal is a very important tool in any trader’s arsenal. They are indicators, designed to inform you about the trades you should make. They are obtained when various different types of information come together. Learn more in our article Binary Options Signals: How do they Work? here.
What makes a good binary options signal, you might ask? Well, a healthy blend of human analysis mixed with sturdy computer algorithms is usually the answer. Computing is useful for distilling large quantities of (usually highly mathematical) information in a short space of time. This is especially important as markets can change in short spaces of time. The human element is equally important for understanding the impact of real world events on the markets, and for interpreting the data that the computer-based algorithms spew out.
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When good quality data is combined with intelligent human analysis, you obtain a viable trading signal that can then be sent out to alert subscribers, to inform them on how they should conduct their trades. Computers and humans make mistakes, which is why combining the two is a good way to minimise the mistakes that can be made by each.
Typically, a brokerage or similar institution will have a set of rules and markers they use to determine when to make trades. These are their ‘trade secrets’ (pun intended). Usually, these will include their own internal alert systems, designed to inform them in real time of changes to the market. This data on its own is useless, which is why highly skilled technical analysts then go through the data and work out viable market entry and exit points (for example).
Each expert will usually be specialised in their own niche field. When all the data crunching and analysis is done, the result you get is a trading signal, an informed opinion predicting what is going to happen to a particular asset in a particular market.
Brokerages can then either use this data themselves to profit on the trades, or, and this is usually more profitable depending on the quality of their signal and the size of the client base, they can choose to sell this data on. By doing this, they are acting as a signals provider. Usually, signals are of a very high quality, especially if the brokerage providing them wants to stay in business. Their reputation is on the line, after all.
Our job on BinaryOptionsSignals.org is to determine which signals providers provide the best data for our customers (that’s you!). By carefully assessing the data we receive and investing in the services provided by a wide array of brokerages, over time, we get a pretty accurate picture of the quality each one of them provides.
The least accurate ones get cut from our lists. This is a costly business model for us, because the list of quality brokers is actually quite short, so on our end, there are a lot of sunk costs. On the other hand, it does mean that over time we have been able to build up a healthy list of high quality brokers offering data with excellent rates of accuracy.