A signal is a trade idea with an entry, stop-loss and target, sent by a person or an algorithm. Signal services range from broker-provided research to anonymous messaging groups with thousands of members.
Types of signal providers
- Broker research – many EU brokers include analysis and trade ideas from their own analysts or third parties (for example Trading Central or Autochartist). It is marketing communication and labelled as such.
- Independent analysts selling subscriptions.
- Algorithmic signals from automated systems.
- Social-media and messaging groups, often free, frequently linked to an affiliate sign-up link or a "VIP" upsell.
Signals and EU rules
A personal recommendation to you about a specific investment is investment advice and requires authorisation under MiFID II. Generic signals sent to everyone usually count as marketing or investment research instead. That distinction means most signal providers are not supervised, and you have no regulatory recourse if their claims are false.
How to test a signal service
- Demand a verifiable track record: timestamped signals, ideally with a third-party-verified trading account, over at least six months.
- Check what counts as a win. Services that report only pips won, ignore stopped-out trades or quote results before costs are misleading.
- Look at risk-to-reward and drawdowns, not win rate. A 90% win rate with tiny targets and huge stops can still lose.
- Paper-trade the signals for a month, including realistic spreads and delays in reaching your platform.
- Follow the money. If the provider earns commission when you open an account with a specific broker, their incentive is sign-ups, not your results.
Red flags
- Screenshots of profits instead of verified statements.
- "Account management" offers, or requests for your login.
- Pressure to move to a specific offshore broker, often with a bonus. See unregulated brokers.
Signals can be a source of ideas. They are not a substitute for your own risk management.
This guide is general information, not personal financial, tax or legal advice. Rules change; we review this page regularly and show the date of the last update above. Found an error? Tell us. See our editorial policy.
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