This article reveals the steps required to convert your trading strategies into Forex signal services, which would serve as an additional source of income.
Forex signal services is a system where Forex signals is 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, more income could be generated from it when it is sold as signals. 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 seen 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 the Forex 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 is sold in the Forex market with over 1 million potential 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 improve on your 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?
1. Cheaper Cost:
The cost of rendering signal services is quite cheaper depending on the type of signal services solution that is used by the signal provider.
Types of Signal Services Solutions:
SMS (Mobile SMS, Web to SMS, Bulk SMS, e.t.c.)
Host Providers (e.g. METAQUOTE 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.)
2. 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 signal services 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 METAQUOTE has about 117,070 members as at 12th Sept, 2013 and they support signal services from providers to their members.
3. Easy Installation:
Some signal services do not need to be installed on the users trading platform especially signals sent through SMS, Web, Live Rooms, e.t.c. Some signal services needs to be installed in the form of indicators or expert advisors, which connects to the provider’s server where the signals are sent directly to the client’s trading platform.
Trustworthy signal providers usually publish their performance results on their website or on reputable benchmark websites like myfxbook.com for all intending subscribers to scrutinize. Also some providers give daily analysis of their trades before it occurs or after it occurs.
It is very flexible in terms of upgrades, and expansion. There are opportunities to introduce more concepts as the subscriber base grows or improves. For example when a subscriber base increases, it gives the signal provider an opportunity to increase the fee or break it down to smaller services with more 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 profit consistency on 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 best standard.
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 should 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
3. Broker specifics (ability to handle 4 & 5 digit orders, other currency types, automatic order placements, e.t.c.)
4. Provider/Client Operating System & Server Type
5. Geographic Location
5. 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 should 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. Be very cautious when fixing 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 about 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 deliver 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.
Finally, take the following costs into consideration when fixing a price for your signal service.
1. Administrative costs (includes programmers fees, hosting fees, and other logistics).
2. Cost of hiring online storage systems like VPS, and software license renewals (if any).
3. Any other recurring costs necessary to avoid disruption of services.
DO NOT OVER BURDEN YOUR CLIENTS WITH EXCESSIVE FEES ESPECIALLY IF THE PRODUCT IS NEW TO THE FOREX MARKET. EVENLY DISTRIBUTE THE IMPORTANT OPERATIONAL COST ON THE FEES TO YOUR CLIENTS AND LET THEM KNOW THAT YOU HAVE TAKEN OFF SOME PERCENTAGE OF THE COST AS AN INCENTIVE. E.g. Premium fee$50.00 now $25.00 (50% Discount)
Market & Advertise The Signal Service: The Forex market has lots of opportunities for traders who are willing to buy or try a new product. The question is how do we get traders attention especially when there are similar services out there? This depends on the marketing strategy you deploy. It is very important to note that good products sell faster irrespective of the marketing strategy. However a better marketing strategy would make it outrun competitors, and keep it at the top rank for a very long time. The first step is to narrow your services to your niche (i.e. your audience) before deciding the marketing or advertising platform to use.
There are lots of marketing channels with their attendant costs. Lets see some free & affordable but effective means of marketing your new signal service package.
Social Platforms: Examples are Facebook.com, Google+ community, twitter, chat rooms, forums, e.t.c. These are one of the fastest medium to advertise, and market your signal service. Some of the social platforms offer free registration, and their paid services are also very cheap.
Direct Adverts Through the Web: This involves designing a website solely for the signal service, and using advertising campaigns like Google advertising schemes click bank, e.t.c. to promote the website, and the signal services package. This method attracts a significant amount of running costs. A cheaper method is to use web bloggers like blogger.com or wordpress.
Signal Services Hosting Providers: This has more advantage over the other methods. The hosting provider connects your service to its pool of clients. The hosting provider handles the marketing and advertising. A fee is usually required from the hosting provider for hosting the signal services and other services it renders. MQL Community Signal Service hosts over 9000 signal services with over 100,000 members and users.
Follow Up & Publish Your Trade Results: Followup with your clients periodically. You can create a forum to enable interactive sessions. This will boost your client confidence and also attract other subscribers. Publish your trades daily or at the end of each trade on the forum or website. This would allow transparency and serve as a means of performance advertisement.
Designing a profitable trading strategy is a vital aspect to succeed in Forex. However commercializing it through signal services triples your success to greater heights.