A trading alert service provides real-time or near-real-time alerts to traders and investors regarding potential trading opportunities in financial markets.
The primary goal of a trading alert service is to help traders stay informed about market movements and identify potentially profitable trades.
Members who sign up for the alert service pay a monthly or annual subscription fee.
Depending on the service, the “alert” may come in the form of an SMS text message, an email message, a social app notification (such as Discord or Slack), mobile apps, in-platform notifications, or forum group notifications.
Typically, the alerts are discretionary alerts generated by a successful trader with experience trading a particular strategy and built up profitable consistency in the trades.
There is value in knowing these trades in real-time under dynamic market conditions.
Members following the alerts can benefit by watching the trades and paper trading them.
They can also start trading them in small sizes to learn the strategy.
Those that have already learned or know the rules of the strategy can still benefit because they can see when and how the adjustments are made based on readings of the market condition, option Greeks, or other criteria of the strategy.
Not only is the timing of the adjustment critical in the success of a strategy, the decision to exit or continue in a trade is an equally important skill to learn.
In most cases, there is no fixed hard rule regarding when to exit a trade.
It is learned from experience.
One can learn it the difficult way by trial and error (with sometimes significant financial consequences).
Or one can speed up one’s learning by following or watching the decisions of a trader who has already learned this skill.
Of particular value are the alert services where, in addition to the buy-sell signal, they provide a commentary on why they decided to perform that action and what market conditions or criteria triggered that decision.
Of course, some members do not have the time or inclination to learn the particular strategy.
There is nothing wrong with that. It may be that the strategy is not of particular interest.
However, they know that the strategy is profitable – or at least more profitable than the cost of the alert service.
So in a sense, they are outsourcing their trading (or a portion of their trading) to the professional behind the alert service.
All they have to do is place the order per the alert.
The behind-the-scenes analysis is what they are paying for.
Then there are alert services where it is not possible to learn their strategy even if you want to.
The strategy may be algorithmic based, whose proprietary formula is closely guarded.
The strategy signals may even be entirely generated by software without human discretion.
For a subscription fee, the alert service allows members to reap the benefits of their system without revealing the workings of the system.
Conclusion
Trading alert services can be particularly useful for beginners as they can speed up the learning process.
They can also be useful for experienced traders, as they can help traders identify potential entry and exit points more precisely and timely to produce higher profits than otherwise.
They can also be a big time-saver.
Imagine having to sort through dozens of charts, patterns, and indicators looking for trading opportunities when an alert service can do everything for you.
It’s important to note that while legitimate trading alert services can provide such valuable insights, users should be cautious of fraudulent or unverified alert services promising guaranteed profits, as such claims are typically unrealistic and may be associated with scams.
If traders decide to use an alert service, they should use them as part of their overall approach to trading, along with their own research and judgment.
We hope you enjoyed this article.
If you have any questions, please send an email or leave a comment below.
Trade safe!
Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek advice from a licensed financial adviser.
Great articxle! Thanks!
Sooooooooooooooo, when will you be starting your own alert services??? 🙂
(I’d love to help administratively to support you making this happen for people!)
Sorry, I don’t have any plans to start an alert service at this stage.