Home > Forex > Starting as a signal provider

Starting as a signal provider

April 12th, 2011

Yes, I’m thinking about becoming a signal provider.

The ones I’ve examined is Tradency, Collective2 and Zulutrade. I’ve only yet tested giving signals to Tradency, and I must say that I’ve already concluded that my EURGBP scalping strategy won’t work with it because of the 1.5 pip spreadpadding by Tradency (the cost of using the signal). The usual TP for the strategy is 4-9 pips and it uses timeouts to get out of the trade after some time at breakeven or small loss. The actual account that I’ve generated the signals from is in profit, but anyone subscribing would be in loss. Two other strategies with larger TP have been working out thou, so I could start to offer them.

The Collective2 is probably better suited to offer scalping signals as there is a choice to take a fixed sum of money per month (the recommended fee is between $50 - $200). There is also a possibility to charge per trade and even only to charge if the system is profitable. The MT4 integration is much worse than Tradency thou, at least that is how I experience it. One irritating thing with C2 is that they charge you ($98) up front for offering your system, before you even know if it will perform well through their trade bridge. You can test it for free for up to 5 trades, but I don’t consider that as a real test.

The last option is the very popular ZuluTrade. The pricing model is the same as for Tradency, IE they pad the spread and the signal provider gets a part of it. What I don’t like is the way signals is sent to ZuluTrade as it doesn’t use a bridge software like the two other alternatives, but rather requires you to give up the investor password of your MT4 account so they them self can pull the triggers from your account. Sure, it is probably easier to setup, but it feels a little off to me. Shouldn’t be a problem thou since you are allowed to use a demo account for generating signals.

I’ve started accounts at all of them, but like I said I’ve only yet traded with Tradency. A few things is a bit annoying with the whole concept like the fixation on lot sizes. I very much prefer variable lotsizes for each and every trade considering the risk willingness and the SL picked. I almost always risk 2% and adapt the lot size accordingly.¬†Unfortunately there is no way as a mirror trader to specify the same, all lotsizes is fixed per strategy (say 0.1 lots). Even if I find a trade that needs a little larger SL level I can’t tell the client to use a slightly smaller lot size in order not to risk too much. The reverse is also true of course, I can’t increase the lot size if there is a tight SL. So really only the actual signal is sent ¬†to the subscribers who in turn can specify which lot size to trade.

If anyone have tips about the services above, or others, I’m very interested. I’ll keep you posted on the progress.

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  1. Paul
    April 12th, 2011 at 12:58 | #1

    Use zulutrade! We need more good providers :)

  2. April 12th, 2011 at 13:46 | #2

    Who said anything about good? ;)

    I’m gonna test it, hopefully it works out. Two of the strategies I use should work nicely as they use larger TP values and is in the trade for a few hours in average.

  3. Matt
    April 15th, 2011 at 00:07 | #3

    Hi,

    Theres another one called “rent a signal”. I’m starting to look into this area as well. Main reason that I didn’t go with ZuluTrade is because they only support Forex Symbols, and the strategy that I have works on the Futures FTSE/UK 100 index, i.e. CFD signals..

  4. April 21st, 2011 at 15:32 | #4

    Hi Matt, missed you reply.

    I’m only in Forex (and a little bit in gold) so Zulu should fit me I think. I still haven’t tested it thou and not Collective2 either. Trading along at Tradency, but they haven’t let me in yet. My USDCHF strategy there have traded 20 times now with 19 wins since April 1st. Don’t know how much trading record they need before admitting a strategy, guess it’ll take a few more weeks.

    Collective2 lets you trade just about anything I think. I quite like the model there with different ways to charge for signals (monthly or by signal and so on).

    Will check out Rent a signal as well. Hopefully I get a little bit more time during Easter… We’ll see :)

    BR Johan

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