This article reveals the steps required to convert your trading strategies into Forex signal services, which would create an additional source of income.
Forex signal services is a system where Forex signals are sent through the signal provider's trading account, trading platform/server, automated synchronizing systems, web, or emails to a client's trading account or terminal. It is a fast growing method of commercializing trading strategies.
A consistent and profitable Forex system is every trader's desire. The Forex system could be in the form of an expert advisor, manual trading strategy, news trading or semi automatic trading systems. Apart from the profits the Forex system would generate when it is used to trade, more income can be generated from it when it is commercialized. An interesting fact is that Forex system producers make more money from their products when they commercialize it.
Why You Should Commercialize Your Forex System?If your system is good why sell it? This is a question most traders ask.
Forex trading has one of the highest number of participants in the world as evident in its daily revenue returns, which is higher than all other financial investments (stocks, shares, e.t.c.) put together. This means that there are millions of people trading everyday, and more than 80% of them are trading with the use of one Forex system or the other. Imagine a Forex system with the capacity to generate 80% win ratio or 50% monthly returns with 2% drawdown, and it is being sold in the Forex market with over 1 millionpotential buyers for $100. That would amount to $100,000,000.00 if everyone bought the product or maybe half or less than half of it, which is about $25,000,000.00 in some months of sales. Now imagine you were the owner of that Forex system.
Commercializing your Forex trading strategy would give room for critics, which would enable you to redesign a much better system. A newer release or version would normally fix bugs or add more functionality, which would improve trading performance.
Commercializing your Forex system would pay you for the years or months of hard work, costs, salaries for programmers, and other expenses incurred. It also provides an opportunity for an alternative source of income.
Why Do Signal Providers & Traders Prefer Signal Services?
- Cheaper Cost:
- The cost of rendering signal services is quite cheaper depending on the type of signal services solution that is deployed by the provider.
Types of Signal Services Solutions:
- Trade Copier: (MT4i trade copying software, Metatrader Account Copier)
- See: A guide on how to copy trades in MT4
- SMS (Mobile SMS, Web to SMS, Bulk SMS, e.t.c.)
- Host Providers (e.g. MQL Community Signal Services)
- Direct Emails & Websites
- Social Platforms (Facebook, Twitter, Google+ Community, e.t.c.)
- Instant Messenger (Skype, Mobile Messengers, Yahoo Chat, e.t.c.)
- Wider Client Reach:
- Most traders prefer Forex signal services to other Forex systems due to the simplicity, cheaper cost, and trust on the provider. The technology involved in signalservices makes it easier to reach many clients irrespective of their geographical location. Getting customers or clients is very easy through forums and social platforms. For example MQL has about 117,070 members as at 12th Sept, 2013 and they support signal services from providers to their members.
- Easy Installation:
- Some signal services do not require installation on the users trading platform especially those that are provided through SMS, Web, Live Rooms, e.t.c. Some require installations in the form of indicators or EAs, which connects to the provider's server where the signals are sent directly to the client's trading platform.
- Trust:
- Trustworthy signal providers usually publish their performance results on their website or on reputable benchmark websites like myfxbook.com, forexnewbonus.com for all intending subscribers to scrutinize. Also some providers give daily analysis of their trades before it occurs or after it occurs.
- Flexibility:
- It is very flexible in terms of upgrades, and expansion. More concepts can be introduced as the subscriber base grows or improves. For example when a subscriber base increases or a particular signal is being subscribed more often, it gives the signal provider an opportunity to increase the fee or break it down to smaller services with additional fees.
STEPS ON HOW TO CONVERT YOUR TRADING STRATEGY INTO FOREX SIGNAL SERVICES
- Conduct Thorough Tests on the Trading Strategy:
Ensure you have tested your trading strategy in a live account or demo account for a minimum of 6 months upwards. The longer the test period the better the confidence. This is very important as most Forex traders look out for consistency in profitability of any trading system. Use the best Forex testing software at your disposal to conduct random testing with different parameters. Also test your strategy with different brokers and account types. The essence is to make sure your trading strategy meets the optimum standard. - See: Forex testing software (StrategyQuant EA Analyzer., StrategyQuant Tick Downloader, Forex Tester 2.0)
- Choose a Good & Affordable Signal Services Delivery Solution:
You do not necessarily need massive computer servers, or software to start a signal service. There are lots of options, and solutions to choose from when deciding the right technology to start with. Beginners, and those with little budgets are advised to look out for free or cheaper solutions like emails, free hosting providers, forums, e.t.c.
When choosing a signal services solution, the following criteria are very important:
- Latency
- Speed
- Broker specifics (ability to handle 4 & 5 digit orders, other currency types, automatic order placements, e.t.c.)
- Provider/Client Operating System & Server Type
- Geographic Location
- Remote capability & mobile phone support
- Package & Pricing:
Packaging is an essential part of marketing. It involves the product's brand name, logo, and trade marks.Although this is not a physical product but it needs to be presented like a physical product on a shelf on sale. All you need is a professional graphical design of your product, which would be used in advertising your trading strategy in the form of a signal service.
A second essential part of packaging involves breaking down your signal service or product into smaller services. This helps you organize a good pricing system.
Fixing the right price is very crucial to how many clients would subscribe to your signal service. You have to be very cautious with high prices because of the competition in the market. Start with free services for some time as most Forex traders love to try free products before paying for it. The free service duration would also help you build a list of interested clients, and also give you the opportunity to improve the services from user feedback, and critics. You could also get client's psychology or perception on what they think should be the cost of your product. Rolling out the paid service would be smooth If clients experience positive returns from your signal service during the free period .
The next stage on the roll out is announcing the price to your clients. How much should it cost? Should clients pay a certain amount per month? or per quarter or annually? Should it be one time-off payment?
The right cost depends on the cost of technology you choose to use in rendering your service, the management cost of the service, and your capacity to render adequate support to your clients. However breaking down the price into affordable units like free, basic, premium, and gold is the best way to fix a price that will suit you and your clients. There should be an affordable option available for everyone. - Finally the following costs should be considered, and built into your price if neccessary.
- Administrative costs (includes programmers fees, hosting fees, and other logistics).
- Cost of hiring solutions like VPS, and software license renewals (if any).
- Any other recurring costs necessary to avoid disruption of services.
