In the classical sense, making money by selling signals is social trading. That is, a service in which an investor connects to a trader’s account and automatically copies signals (opening and closing deals) to his account.
How to make money for a provider of trading signals
There are several options for earning a trader by delivering signals, and social trading is the main one. The following options are possible:
Social trading broker. Not all companies have this service offered by the broker itself. Its advantage is that the broker’s reputation is important, so there is a possibility that the most obvious fraudulent accounts are blocked. Verification contributes partly to this. On the other hand, in comparison with platforms, there is less choice of traders for an investor.
Copy-trading services. The platform’s earnings is a commission that is deducted from the trader’s profit. In other words, the trader’s profit is divided into the investor, the trader and the platform.
In addition to social trading, the signal provider has several more opportunities to make money by selling signals:
- Creating your own channel (pages on social networks) with an attached script for automatically sending signals to subscribers. The script can be ordered on freelance exchanges. The option is suitable for those who do not trust the ratings of brokers and know how to form their target audience. The idea is only suitable for medium and long term strategies.
- Work for a separate company. There are companies that specialize in selling signals (example: signalator.com) and they are interested in professional traders whose signals can be subscribed to.
Each of the above options has its own advantages for both the investor and the trader. Free trading signals are almost always available only after a one-time payment for a subscription, although there are exceptions. How much the subscription pays off is a rhetorical question, because social trading is more popular with investors. And among traders, individual distribution of signals is more popular.