As a forex signal provider trading the currency markets larger earnings are generally made when earnings are based upon volume's traded. ie Lot sizes. This earnings model is more lucrative than the standard base rate of earnings being based upon only on a specific set monthly amount per each individual subscriber.
Lets take a look at some specific numbers with some large reputable firms allowing traders to offer their signals to their customer base. The figures used below are those provided by the firms as at 13 February 2015, and may change into the future but at least they will serve as a ball park figure.
How much money can you make?
AutoTrade providers earn 0.5 pips per a winning trade. Let's check the following scenario:
If you're an experienced forex trader with a proven track record, you can offer your system to the Myfxbook enormous user base (over 90,000 and counting!) and earn as much as 0.5 pips per a winning trade - there is no upper limit!
What is a proven track record?
[update March 2019 : This company may no longer be operating?]
How we calculate your revenue:
Overall number of trades executed by you, per month 80. Number of profitable trades 60. Number of followers 100 Client account types Both large and small accounts Generated volume of profitable trades 500*60= 30,000 mini lot Total monthly earnings 30,000 x 0.5 = USD$15,000
Pro's of SignalTrader
Signal providers make up to 50% of the commission/spread that we get from brokers. On average, a provider gets $2-$12* per each lot traded in accounts of signal followers.
* Profit depends on trading instruments and the brokerage company
that the signal follower has his account in.
Pro's of MyDigiTrade
Metatrader5 Trading Signals
Earnings are based upon a dollar amount each month which the signal provider chooses, less 20% service fee paid to Metatrader as a administration fee. The net 80% subscription fee is paid each month regardless of any other conditions. ie Whether the signals are profitable or not, nor the amount of signals.
Example of say 250 subscribers as example above of Myfxbook. If signal provider was charging say $40 each month, that would equal earnings of $8,000 each month. (vs $26,000 through Myfxbook).
Or to equal the same amount as through Myfxbook the signal provider would have to charge $130 per each Metatrader subscriber.
2nd example of say 100 subscribers as example above of SignalTrader. If signal provider was charging say $40 each month, that would equal earnings of $3,200 each month. (vs $15,000 through SignalTrader).
Or to equal the same amount as through SignalTrader the signal provider would have to charge $187.50 per each Metatrader subscriber.
Summary - Which firm is best for the signal provider
It must also be remembered that the above examples will vary depending upon the popularity of the signal providers system within the respective firms (ie Total volume traded) as well as the signal providers actual trading statistics too. Remember that with Myfxbook example, the amount calculated was based upon a trading system that achieved 65 profitable trades each month. While, the Signal Trader example was based upon a system having 60 profitable trades each month.
In some cases if the signal providers trading system / strategy is more longer term and does not produce "many" profitable trades each month, then it may prove more profitable to offer the signals through Metatrader5?
It's a matter of selecting the right firm for your trading systems statistics or why not offer your signals through them all? (You may want to make a same changes to each trade so your signals are unique to each firm your using?)
If you have any thoughts on this subject, we would appreciate to hear them below.
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