How to Subscribe to MT4 Trading Signals
Using trading signals can be an effective way to trade the financial markets, especially for those who are either new or do not have the time to do extensive research.
Even professional traders make use of trading signals in order to diversify their strategies or as an additional way to confirm their own technical analysis – and choose to trade only those signals which closely tie in with this analysis.
No matter what your reasons may be for using trading signals, the MT4 signals feature offers traders many choices while at the same time making it simpler to use. You can choose to trade the signals either manually or automate your trading with no human intervention required.
Trading signals are merely buy and sell recommendations. They are either provided by an analyst or based on a mechanical automated trading strategy. This means that sometimes trading signals are prone to losing trades and this is a risk that traders should be aware of.
Trusting your trading equity in the hands of the signal provider can turn out good or bad. You could start making consistent profits, or you could risk losing trading capital.
How to Choose a Trading Signals Service
The most important thing that you will do when subscribing to a trading signals service is the initial research that goes into it. Nowadays there are many trading signals service providers that claim to offer big returns.
While it is easy to fall prey to their marketing gimmicks often employed in this service niche, traders need to look beyond and dig deeper. Here are some quick ways to narrow down the trading signals service that is best for you:
- Age of the Service: Most new services often carry impressive returns. It is therefore tempting to choose such providers. However, traders need to focus on the longer term, established trading record.
The older a trading signals service is, the better the chance that you will find more metrics to compare.
- Drawdown: Drawdown is often misunderstood. Traders usually shun trading signals services that have a drawdown of 20% or more. Rather, traders need to compare the returns to the drawdown.
For example, if a trading signals service has a 6% drawdown, chances are that their returns are at or between 6% – 10%. Anything higher than this could mean that the strategy just hit a winning streak.
Comparing this information to the age of the trading signals account can help you understand their real returns in different market conditions.
- Fees: Trading signal services make money by the fees they charge. This can vary. Typically, signals providers charge a percentage of the profits they make for you. The profits are based on comparison to the previous month’s returns.
For example, if a trading signals service charges you a 1% fee, and in the second month the profits were not as high as the previous month’s return, then you are typically not charged for it.
This is also known as high-watermark, which is the highest peak in value that the signals service has reached. Other providers simply stick to using a standard fee or a volume on the trades that they generate in terms of signals.
While there is no right or wrong way, traders should see if the type of fee being charged adds value to the service and more importantly if it is justified.
- Equity and Volume: Equity and trading volume also plays a big role. In order to match the signal performance equity chart, you need to have the recommended amount of capital, including leverage and volume.
Some trading signals providers ask for a minimum of $1000 in trading capital to generate a 5% return. Do not be misled into thinking that you can turn around $100 and expect the same returns. All it takes is one losing trade to wipe out your equity.
How to Use and Copy Trading Signals
Copy-able trading signals is a new genre that is growing more popular by the day. It has allowed the average mom and pop trader to create an account and simply plug in their trading account to copy trades in real time from a signals provider.
This is can be a great a way to generate additional income, but only if you manage to connect to the right signals provider and also have the right equity and leverage.
On the MT4 trading platform you can automatically subscribe to signals. To do so, click on the ‘Signals’ tab in the MT4 terminal bottom-side tabs where you can find a list of trading signal providers.
You can filter them based on demo or live accounts as well as filter the signals providers based on their returns or slippage. It is important to choose a signal provider who uses the same broker feed as you. This is to ensure that you do not carry the risk of slippage or a mismatch in the bid and ask prices.
The picture above shows an example of the trading signals providers that you can select directly from your MT4 platform. You will need to sign up for an MQL5.com account and also pay the fees as outlined by the signals provider in question.
Automated Trading using Copy Signals
Now that you have determined the trading signals provider you want to copy trades from, the next step is to either make use of a VPS or to keep your terminal running. This ensures that the trading signals are copied in real time.
For traders who are unable to keep the MT4 terminal running, it is best to check with the signals provider to find out the times that they are most actively trading.
This way you can keep your terminal running only during the times when the signals service is more active and thus be able to take advantage of the automated service with less hassle.