What would you consider the average price of a profitable signal service to be for the following markets? 1) Forex 2) Single stocks 3) Futures (ES, treasuries, etc) I have seen Forex signals services being quotes significantly higher than stock signals services (sometimes double). Any idea why this is?
Without defining profitable, the question is too open ended. Barely profitable ? 1% a month ? 2% a month ? 1% a week ? Without this info very hard to put a price.
Certainly 1% a week. I am really more talking about the existing prices out there, not the actual value.
IMO signal service is inferior way to trade while shifting risk from your own account. OPM management is much more effective if you're confident about the profits. If selling signals you're left with the flat fee doesn't matter how big your client trades. She/he may be making 6 figures per year from your calls and you're left with a few hundreds bucks every month. With OPM you get the share of real P&L.
I do not know about the stock signal service but I know about 1 forex signal service that will give you next month service free if they are not able to make you profits.
I assume the price differential comes from the fact that forex traders tend to be cheaper or generally more low-rent punters than stock traders and you want to demonstrate that what you're offering (or pretending to offer) is of value to real players, not pikers. My question is how do these services prove that what they offer is worth the asking price. Is there one or more extensive backtest(s) demonstrating profitability?
With OPM you're doing a hell of a lot more work. Just up the fee if your signals are worth a damn, then trade them yourself once you get a large enough bankroll.
Just share a joke. A while ago there is one of those sales person from a forex system came to my buddy's company (a private held trade firm) and try to sell a "signal system", and she showed all her past results and claimed it can make 5% (guarantee) a month (after commission and slippage), with the proof of all the back test and "success history and happy feedbacks" from all her clients. The price tag is about $30 to $40K a year or something. What my buddy did is he suggested he will put a $500K on the system to trade, but with one condition, if he make money, he will share the profit 50/50, but if he loss, he will ask the signal provider to share the loss 50/50. He said he will call his lawyer and draft the legal agreement You know the answer, the sales person just run away as fast as she could