| Many of us spend years looking for the holy grail | | | | Market conditions also play an important part on |
| trading system. Signal services can be a great | | | | the accuracy of indicators. During upswings in the |
| way to use someone elses carefully developed | | | | market, for example, trend indicators will send out |
| system. By following a trading system, market | | | | buy signals but longer-term oscillator indicators will |
| condition will at times be favorable to buy and at | | | | view the market as being overbought and send |
| other times be favorable to sell. Clearly defined | | | | out a sell signal. Generally speaking, trend |
| conditions give 'signals' that the educated investor | | | | indicators are most accurate during trend |
| can read and act on. Signals are not as crucial for | | | | conditions and oscillators are best during times of |
| the long term investor. For these people, market | | | | transition. Both types of indicators are often in |
| conditions and the value of particular companies | | | | variance with the other. |
| can be watched on a daily basis. For day and | | | | Depending on the type of service you sign up for, |
| what we call active traders, however, signals are | | | | signals can be delivered by email on a daily basis, |
| crucial for acting quickly on stock market | | | | available for viewing on a website, or be |
| movements. | | | | integrated into your trading software so that |
| Investors who treat trading as a full-time job | | | | popups appear on your screen for particular |
| have the time to watch the market movements | | | | signals that you are watching. |
| for signals. Oftentimes, however, signals can be | | | | Companies which provide signals usually offer their |
| automated and integrated into trading software. | | | | services on a monthly basis. Some are quite |
| The investor can choose which signals to be | | | | expensive - as high as several hundred dollars a |
| alerted about and they will automatically appear | | | | month. These are obviously aimed at the |
| on screen. Software signals are usually only | | | | professional trader but other services are also |
| available by subscription and some services | | | | available at more reasonable costs. Keep this in |
| charge hundreds of dollars a year for a complete | | | | mind. We have frequently seen peoples with |
| package. This includes trading software and | | | | $1,000 to invest pay $200 a month for a system. |
| access to up-to-the-minute charts for the latest | | | | That system might be great, but is it really going |
| information about the stock market. | | | | to make enough every month (20%+) to cover |
| Investors who don't have the time to watch the | | | | just your fees? If your starting capital is small, so |
| market closely can subscribe to services which | | | | must be the investment you make in signals. |
| publish signals on a daily or hourly basis. These | | | | Stock Trading Resources ( evaluates many of |
| services may employ market analysts who may | | | | these criteria and provides help in finding the signal |
| follow several indicators to arrive at a particular | | | | service that fits your portfolio size and investing |
| signal. More commonly, however, their systems | | | | strategy best. |
| are completely automated with signals being | | | | The value of these services has to be weighed |
| generated by software which examines market | | | | by the individual investor. They can be a great |
| conditions. Some of these services have a better | | | | time saver but they may also encourage laziness |
| track record than others - make sure you get a | | | | when it comes to analyzing the market. A |
| free trial before purchasing. Also, make sure you | | | | knowledgeable trader should have the tools |
| paper trade some of the signals first and see if | | | | necessary to judge the effectiveness of a signal |
| they truly match up to reported results. This is | | | | system and do some of the calculations himself |
| the best test before spending your money on | | | | to keep on top of the market. Finally, make sure |
| more books and software. | | | | your signal service provides an exact strategy |
| With any third-party signal provider it pays to | | | | when to sell. When to sell is usually what is the |
| know how the signals are being generated. Since | | | | difference between the small number of super |
| there are such a large number of market | | | | successful traders and the larger numbers of |
| indicators some of them may contradict each | | | | unprofitable traders. If there is no exit strategy, |
| other. In addition, a particular indicator may send | | | | you do not have a system and you'll want to |
| out conflicting signals depending on the time | | | | move on. The best signal services give |
| frame. | | | | non-subjective entries and exits. |