2022 was the stock market's worst year since 2008. At the end of the year, the S&P 500 finished at nearly 20% below its starting value. That may be bad news for stock traders, but it's a positive sign for gold market participants.

Gold is a commodity. And it is a traditional safe haven investment when the stock market is down. That means institutional investors move their money from the stock market and place their bets on gold until volatility calms down.

Gold trading has the potential to turn some serious profits in 2023. But if you are new to trading, you need to rely on the right trading signals. That is why we are bringing you this guide.

Are you wondering how to find a trading signal provider to help you make the most out of your investments? Keep reading this guide to learn how to tell the difference between trustworthy and scammy trade signal providers.

What Are Trade Signals?

Trading signals or trade signals are events that occur in a financial market that indicate when to buy or sell an asset.

You can get access to forex trading signals and day trading signals. Many providers also specialize in giving signals for trading stocks, bonds, and commodities like gold.

Experts generate trade signals based on market analyses, whether manual or computer generated. Traders can also generate their own signals. For example, you could use the following to come up with a signal:

• Price-to-earnings ratios
• Interest rate changes
• Volume surges
• Earnings reports
• Fear headlines

Yet, most new traders are too busy and inexperienced to come up with their own high-quality signals. This is where a trading signal provider can come in. These experts can give you pre-vetted buy and sell signals.

How to Identify High-Quality Trading Signals

Working with a company or individual providing trade signals can seriously up your game. But not all of these providers are created equal. Many signal providers are in the business of making money, not providing quality service.

So, how can you identify a high-quality service provider? Here are our top tips.

Quality Over Quantity

Trading is not like the lottery, where the more tickets you buy, the higher your chances of winning. Yet, many signal providers will flood your inbox with dozens of signals every day.

Instead, quality rules over quantity when it comes to making trades. At GoldSignals, we focus on profitable, high-quality signals. We will provide at least one good signal every day, but we will never encourage overtrading.

Overtrading is another word for churning. This practice is not only prohibited, but it will also increase the spreads you pay on trades with no or a negative effect on profitability.

Expertise and Experience

It is impossible for someone with no trading experience to come up with strong signals. That is why you always want to work with a signal provider that has experience placing trades and profitable trades, at that.

Further, even someone with general trading experience may not give good signals if they do not have expertise with the asset you want to trade. For example, if you want to trade stocks, do not sign up for forex trading signals.

At GoldSignals, our analysts have more than 14 years of combined experience placing trades. And we have over five years of experience in placing trades with gold on the forex and commodities market.

Low Risk to Reward

The risk-reward ratio measures how much an investment may return against how much a trader stands to lose on that investment. A company specializing in high-risk-to-reward trades can often lose you more money than it makes.

Profitable traders and signal providers know that a good risk-to-reward ratio is 1:3. Anything less than that presents far too much risk to justify the potential return.

GoldSignals focuses on safe and consistent signals for XAU/USD. We want you to enjoy and learn from the process of trading gold. We will never recommend a trade that puts too much risk in your portfolio.

Affordable Pricing

There are some high-priced, luxury trading signal providers out there. Yet, unless you are looking to invest a significant amount of money, there is no incentive to pay for these services.

Also, look out for providers that charge hidden fees and take high spreads or spreads that increase over time. Even if the profitability of each signal is high, your realized profits will get eaten up.

GoldSignals charges one low monthly or lifetime fee for our services. We never include hidden charges. Plus, our spreads remain consistent throughout the lifetime of your plan.

Access to Multiple Markets

A good provider of investment signals should give you signals across multiple markets. If the provider only gives signals for one market, traders could potentially miss out on profitable opportunities.

Take gold, for example. 90% of gold trades are on the London OTC market, the US futures market, and the SGE (Shanghai Gold Exchange). If you only have access to US futures and SGE calls, you're missing over 58% of the market.

At GoldSignals, we give you buy and sell ratings for all the major gold markets. That way, you never have to stress about missing out on an opportunity to up your profits again.

Training and Education

If you give someone a fish, they'll never learn how to catch the fish on their own. This logic also applies to placing trades. If you never learn how to call the market yourself, you'll never learn to trade independently.

That's why a good trading signal provider will not just help you identify promising trades. It should also teach you trading strategies to identify signals on your own.

With GoldSignals' monthly plan, you can access one-on-one training with our trading professionals. Upgrade to the lifetime package for full support on trading and signal calling.

How to Identify Trading Signal Scams

By now, you should understand how to identify high-quality trade signal providers. But what about the opposite? How do you know when a company is trying to scam you out of your money?

Most scammy providers will play on new traders' excitement and desire for profits. As such, here are three potential signs of a potential scam.

Guaranteed Profitability

If a provider promises or guarantees a certain percentage of profits, you should always walk away. It is rare for a company to know exactly how much profit you will walk away with. After all, markets are volatile.

Additionally, steer clear of companies promising alarmingly high profitability. For example, making 100% profits on all trades is virtually impossible. A company that does promise 100% profits could be encouraging overtrading.

All traders go through periods of gains and losses. Your trading results should not look like a progressive linear curve. Make sure you choose a provider that offers realistic trading curves, which should always include periods of loss.

Overtrading

Overtrading benefits signal providers and brokers, but it can hurt individual traders. Many trading signal companies charge per signal. The more signals, the higher their profits.

At the same time, brokers benefit from spreads on each trade you place. The more trades you make, the more spreads the broker can collect. This type of behaviour is illegal, and brokers can get in trouble for it.

Meanwhile, the trader will lose money. Even if you do not lose money to fees, the more trades you make, the higher your risk tends to be. And that can result in an unrealistic risk-to-reward ratio across your portfolio.

Free Signals

As mentioned, trading signals should not cost too much. But neither should they cost too little or nothing at all. While free signals may not spell out a scam, they may mean you're getting low-quality advice.

Free signals may supplement higher-quality signals. You can also use them to verify signals you come up with on your own when you are a beginner. However, you should never rely on them alone.

Even more dangerous are the individuals and companies that give out free signals to artificially inflate or deflate the market. The company or trader who gave you the signal can profit from your behaviour in these cases.

Searching for Gold Trading Signal Providers?

High-quality trading signals can be hard to come by these days. But as long as you follow our guide to identifying good providers and avoiding scams, you can find the reliable and profitable buy/sell signals you have been searching for.

Are you looking for a trading signal provider you can trust? GoldSignal serves gold traders in hundreds of countries. Join us today to get the profitable and affordable signals you need to succeed.

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