How To Convert Your Trading Strategy Into Forex Signal Services

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 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 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?

1. 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.)


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 MQL 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 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.


4. Trust:
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.


5. 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

1. 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)


2. 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


3. 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.


CAUTION
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.





40% Life Time Discount Guarantee For All VPS Plans





4. Market & Advertise The Signal Service:
   The Forex market has lots of opportunities for traderswho are willing to purchase or try a new product. The question is how do we get the attention of these traders 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 identify 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. So if you are a beginner with a low budget there is still something for you. Lets see some free & affordable but effective means of marketing your new signal service package.
   
   Social Platforms: Examples are facebook, 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 signups, 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 adsense, click bank, RegNow, 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 blogspot 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 marketing and advertising is taken care of by the hosting provider. 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. 



5. 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. Also ensure you 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 because you are challenged to improve your system when traders are happy to pay for it.

Further Reading: 

1. Top 7 MQL's MT4 Signal Services Providers
2. How To Make 40-50 Pips Consistently Using Unique MA Combination
3. How To Copy Trades in MT4
4. 10 Differences Between MT4 & MT5 Trading Platform

Forex Resources & Tools:

FXTradeCity's Pool of Forex Resources

Forex Kinectics 

EA-Wizard Expert Advisor Development Software for Non-Programmers

8 Requirements for Developing Forex Winning Strategies

1. HAVE A POSITIVE OBJECTIVE

Objective means “The goal intended to be attained (and which is believed to be attainable)” – TheSage’s English Dictionary and Thesaurus. 

All Forex traders have a common objective – INVEST TO GENERATE INCOME. The reason why most people decided

to invest in Forex happens to be the objective behind their trading strategy. So if you decided to invest in Forex with a wrong objective or motive then your trading strategies will certainly fail. If you want to develop a winning strategy you must have the right objective and mind frame. You must put off all unrealistic and wrong motives behind your intentions as regards the reasons why you got into Forex. Your objective is the psychological force that drives your passion in whatever you do, so it has to be right. A positive objective for a winning strategy must have the following attributes: 

     a. Not in a hurry to get rich quick i.e. gradual but steady

         and upward growth logic. 

     b. Long term approach logic. 

     c. Right motives and intensions. 

Unfortunately most traders have a wrong perception of the returns of investment in Forex before they got in. Many invested in Forex for wrong reasons. Whatever got you into Forex will play a major role in determining the kind of trading strategy you will adopt. This also will determine your success or your failure in Forex. Therefore if 80% percent of traders loose in forex, this could likely mean 80% of Forex trader’s objectives or mindset is wrong.

2. ACCURATE ENTRY/EXIT LOGIC “Eat the pie while it is

    hot and ready to serve”.

What good is a strategy that gets you 20 pips when the rally was supposed to be 100pips because of a late entry? What good is a strategy that gets you as high as 150 pips but exits at 20 pips or negative because of a late exit? An ideal winning strategy should get you in and out at the right time with best profits possible. A winning strategy must have at least 90% Accurate Entry/Exit mechanism. 

Perfection with consistent practice is the key to achieving this feat. Using very good simulating tools to test your strategy will help to fine tune and show you precise entry/exit points that would give you ideal profits. The type of indicators you use would also determine the accuracy of your entry and exit points. Don’t use lagging indicators as the major decider for trade entry or exit. They are very good in trend systems or better when combined with other indicators. You need to know how to combine trend, oscillating and other linear indicators to get an accurate entry/exit system in your strategy.

3. Identify the best Take Profit/Stop Loss Settings 

A winning Forex strategy must have good Take Profit and Stop Loss settings. You must know the highest number of pips a currency pair can get to in a session or at a particular time as well as the lowest. 

Your personal trading goals i.e. how many pips you want to achieve in a day, week or month should determine your TP/SL in your trading strategy. Consistent testing of your strategy with Forex simulating software would help you to get the best TP/SL for a winning Forex strategy development. 

4. Control! Control!! Control!!!

Any forex strategy without a control mechanism will fail someday. You should be able to design control mechanisms against likely and unlikely uncertainties. 

Also for you to benefit and maintain a winning trading strategy the following should be kept under strict control:

a. Emotions (anger, anxiety, excitement, e.t.c) 
b. Fear (of mistakes, losing a trade, uncertainties,
    decisions, e.t.c.) 
c. Impatience (trying to meet a month’s target in one day,

    can’t wait, e.t.c) 
d. Anxiety (panic, worry, nervousness, e.t.c.) 

There are times when certain market conditions toy with your senses, and emotions. At such times fear and anxiety comes in, and if not properly handled, you will likely make costly mistakes through wrong decisions. The ability to control emotions, fear, anxiety and impatience would complement your forex strategy. 

Nothing good comes out from the best trading strategy when you are under the control of fear, emotions, anxiety and impatience. 

5. Currency Pair Choice 

Currency pairs are unique in combinations and reactions. Similar effects are sometimes observed on certain currency pairs during an economic impact despite the differences in the pairs region. 

Every currency pair has a unique pattern, and therefore

should be traded differently. Some patterns are strong during the London Session or Asia Session, other currency pair patterns could be bearish, zigzag, bullish, uncertain or docile at a particular session or duration. 

Currency pairs due to their unique nature cannot fit into all types of strategies. Therefore pick a pair that fits perfectly into the logic of your strategy. You can also test your strategy with all sorts of parameters using the major currency pairs first. Compare the results, and identify the currency pair with the best performance results. Forex simulators and back testing tools can help you to decide the best currency pair that would give you the best performance and less drawdown. 

See: Forex Tool That Analyzes Better Than MT4 Strategy
       Tester

6. Ability to Recover From Loss 

There would always be downtimes in Forex, therefore every winning strategy should have a means of recovering back from loss or series of losses. Some schemes like doubling the lot size, martingale, and hedging are used to regain sharp losses. These schemes are good but can be very dangerous too. Trade mechanism or logic that increase and balance lot size as the need arise is preferable to be included in your strategy. 

7. Stress Test

This is a major requirement for developing Forex winning strategies. You can think of it as the lab or test ground where the strategy would be analyzed for unknown bugs, efficiencies, possibilities, capabilities, reliability, and likely returns on investment. 

A very good strategy written down on paper or your notepad is useless until it is has passed the stress test. There are different testing tools available for developing strategies. Some have the capacity to test and turn strategies into Expert Advisors, some have more advanced features than the regular MT4 strategy tester, while others produce deeper analysis. 

8. Good Broker 

This is the platform where the strategy would be used. It is wise to develop your strategy or get details of what you want to achieve from your strategy before choosing a broker. Your strategy could be in the form of scalping, hedging, martingale, crossover, price action, timeframe combination, news or breakout system. Some of these strategies are restricted by some brokers, and some have been banned or reviewed by some Forex Regulatory Agencies. 

Also some brokers offer proprietary platforms, which could be very good or bad for your strategy. The price feed, and the state of technology a broker utilizea can either affect your strategy positively or negatively. A true ECN broker’s platform could work better with your strategy than an STP broker’s platform (vice versa). 

Talk to your broker about your strategy and find out if their policies and trading platform supports it.

These are the 8 requirements needed for designing a winning Forex Strategy. 

Have a better requirement not listed here, share with us, leave a comment.

About Onyebuchim C. Obike I am an IT specialist in Software Programming, Networking & Telecommunication. My quest for an alternative source of income led me into Forex since 2005. My encounter in Forex over the years made me to develop a site where traders can get reliable and effective Forex Resources & Tools, that would make them successful traders. I prefer combining Technical & Fundamental techniques in trading. Follow me on facebook: www.facebook.com/fxtradecity