Signal Trader Tips
Please note that Signal Trader ceased operating on December 5th 2016. However we keep these useful tips online since they may help you social or copy trading on other platforms.
Signal Trader is a leading innovative platform in the automated trading field. The trading systems displayed on their site are a unique selection of verified and audited systems.
The Signal Trader team stress the fact that they constantly analyzes and audits hundreds of potential systems. They use various forward and back testing methods for all candidate systems. Only the systems which pass their rigid and long testing period are displayed on site.
The Signal Trader solution allows any investor to create a diversified automated portfolio starting from a start deposit of $2,000.
Generic SignalTrader Tips:
- Try the demo. Signal Trader provides a real-time demo which allows you to get familiar with the platform and invest virtual money in any of their systems real-time. This allows you to learn first-hand exactly what they offer and learn the solutions advantages and proper usage.
- Take time to review and evaluate the systems available to make sure you choose the one(s) to copy which match your investment criteria. It’s about 10-14 systems, so arguable you could look at the description and historical performance of all.
- When evaluating a system don’t just look at the past profits. Evaluating the risk is as, and actually even more important. The system’s drawdown is normally one of the most obvious indicators for this. Unfortunately, as mentioned in our Signal Trader review, the way they calculate the drawdown figures in the historical performance column on the left doesn’t give a clear indication of the full equity drawdown. However Signal Trader made a massive improvement in August 2014 by adding the actual equity balance (in red) to the balance graph in the system profiles. This gives you a much clearer indication of how the actual equity of the system’s account fluctuated instead of just the “balance of closed trades”. You can easily spot the actual equity drawdown by looking for the biggest gap between an equity high followed by a low. This is extremely useful (and unique on “real balances” versus other networks) but unfortunately for some systems it doesn’t stretch back the full lifetime of the trading data. (At the time of writing it also looked this graph was wrong for their oldest system SignalKING.)
- Give consideration to the current open trades. Many negative open trades can often lead to large draw downs and can be a sign of Martingale trading systems. While Signal Trader claim they no longer allow Martingale type strategies on their platform, they did have some in the past. So always good to check yourself.
- Consider diversifying. I.e. Signal Trader allows you to follow and copy more systems to reduce your exposure to one system and mitigate risk.
- Always make sure you select your relevant risk settings when following a system. Following more than one increases your overall exposure and to reduce the risk of one system depleting your account it’s best not to over allocate. Currently Signal Trader allows you to risk up to 70% of your capital on a single system and up to 200% overall – bare in mind that these are however the “highest” risk settings they allow – i.e. for high risk investors!
- While you can always intervene yourself (via mt4), it normally pays to be patient in the long run. E.g. if you follow a system which has a history of large drawdowns you should not be tempted to make a manual intervention if the system carries a drawdown. Your risk settings should have taken into account the drawdown risk and the ability to carry this over a period of time. And if you don’t like the risk of large open trade drawdowns (to avoid temptations to intervene manually) you can always look for traders and systems who hardly leave trades open overnight (normally our personal preference and Signal Trader has these too).
- While all systems are monitored by Signal Trader at all times and they currently don’t allow Martingale type strategies, it’s still worth to be on the lookout for those (especially on newly added systems).
- Don’t be greedy. It’s always tempting to set all funds on this months leading system. However keep in mind that setting too many funds on a single system just raises the stakes (i.e. as above, consider diversifying). Also don’t start increasing your risk after a few good weeks. No system is successful all the time and every system will have some bad weeks or months.
- Consider taking things one step at a time. You can start following Signal Trader’s systems with real money from $2,000. Once you’re confident and have tried it with small amounts, you can always go ahead and gradually increase the amounts to the capital amount you intended to invest.
- As true with any investments, have realistic profit expectations. Social Trading and the systems are not magic. It’s trading, so don’t expect to gain 100% in a month. The systems results need to be considered in terms of their longer term potential.
- One advantage of Signal Trader’s ratio solution is that amazing returns (Roi%) can potentially be gained no matter how large the invested capital is. However also consider that using a large ratio can lead to large losses!
- If in doubt with anything you can also approach the Signal Trader support team via live chat and email. They’ve always been very helpful and detailed/skillful in their responses to me. They can provide some useful pointers for using the platform too.
Last updated: December 2, 2016
As always please consider that Forex trading can be risk. Never invest money you cannot afford to lose and always consult an independent financial advisor if you’re not sure whether this type of investing is for you.