In today's highly correlated investment world, knowing how to use trading signals can provide a significant advantage in the stock market. There are several types of services and systems available today, and we will cover a few of them here - including fully automated systems, advanced research services, and live trading signals.
How to Use Fully Automated Systems
Easily these are the most advanced (and most expensive) programs in the marketplace. Highly sophisticated computer programs probe the markets for opportunities at rates of thousands of times per microsecond - testing price levels and searching for weak hands. These computers are the bane of every investor in the market who has ever used a stop-loss trade trigger to reduce major loss risk. Access to HFT programs is limited to those who can afford the arms-race that has ensued since the first appearance of the platforms. Slower connection speeds and processing power rending older systems obsolete to newer faster setups.
Using Advanced Research Signals Services
A second means available to day traders is the use of professional signal services. These companies do continuous market research and inform their subscribers about opportunities upcoming on specific securities at specific price levels. This gives those investors the opportunity to be on the lookout for specific, manageable events in the market and jump in front of the wave to catch some quick profits. This strategy is particularly effective for day traders of binary options. Subscription prices range from a few dollars per month to over one hundred dollars and are based on frequency of delivery. A more expensive service will deliver more frequent alerts while a less expensive one will only send out research infrequently.
How to Use Trading Signals with Live Market Data
A third way of how to use trading signals involves using a wide level of market observation to quickly assess current conditions and make predictions about future directions of specific markets and assets from more broad perceptions of global markets. This is sometimes referred to as using macro-effect influences to predict individual asset behavior. This has arisen out of the broad correlation amongst global securities today - given the speed at which the largest, most sophisticated investors can move into and out of assets at will. The advantage of using market data to gauge conditions is that is usually pretty inexpensive. The disadvantage of course is knowing which relationships to observe and how to interpret the information being delivered. Many tools and indicators have been developed over the years to help harness the massive information overload.
Day traders know that correctly diagnosing the initial market direction is critical in determining the profitability of short term trades such as those done in
binary options trading. A recently developed demonstration trading signals app is a rudimentary example of how a set of macro-factors can be distilled into an easy to read indicator of global market indicators.
