which method of paying for a signal do you prefer?
- BEST Spread
- Scalping 1M to beat spread and profit...
- Strategy Comparison
Commission based on profit per trade is fairest for both trader and signal provider.
Fixed period payment like on MQL5.com can work in the favor of the trader, who (with a successful long-term signal) would certainly end up generating far greater profits than the cost of the signal per month.
The third option is certainly a unique (for signals) option for signal subscriptions!
I am 100% agreed with Matthew. "Commission based on profit" system is the best for both parties.
But for an investor,he will want the cheapest way to make money and will most probably go for the fixed period payment.i wanted to split this poll in two categories to be able to tell who the traders are and who the investors are and then see what method of payment they prefer but there is no way of doing that.I am almost 100% sure most of the people choosing the commission based option are traders. As a trader i also agree that commission based signals are a win win option for both the trader and investor.As for the fixed payment period like on this site a lot of traders need to know their worth.
A mistake i see a lot of traders on mql5 make is charging less than they are worth to get subscribers.signals on the internet go for $100 - $500 and investors pay because they know the service they are getting is worth it.
The commission based signal makes it such that you don't have to pay a subscription fee per month to get the best signals out there. I've seen a couple of guys give out their signals for free but only if the subscribers(investors) signed up to the traders preferred broker using their links.the way they make their money is based on spreads.for every trade you take there is a spread and this spreads equate to money,some brokers offer up to 50% of their spread as your commission for each trade taken by your subs.
But at the end of it all, as an investor it is all about finding what works for you best. As a trader it's about finding the balance between profit for you and profit for your investors while at the same time remaining affordable.
That would be a great idea but the possible problem (maybe) would be if some of the trades of the subscribers were taken manually instead of copied from provider (How could be that identified?) and also there would be a problem in payments . Will the payments be paid by trade? Then there would be a collapse in payments caused by scalping strategies on the other hand if the payments are made after the month the subscriber could play tricks (and they would do that i can guarantee you that ) like unsuscribing the last days to not having to pay and someone might think " ok then mql5 could apply a rule of not unsuscribing " but the problem would be if a subscriber want to unsubscribe from signal because is loosing money and there is another problem: payments are made via mql5 account not via trading account so the subscriber could not deposit money to the mql5 account or withdrawing profits before subscription end in case the subscription payment method would be changed to be paid with trading account . If this and other technical problems are solved it would be nice the "commision based on profit" payment.
I think the solution to the first problem of trades taken manually can be addressed by mql5 using a comment to show a trade was taken by the subscriber instead of the trader or having a unique identifier for trades taken by the trader, for example they can use a magic number which is used in ea's to identify a trader's trade.
I think payment should be given to the trader after each trade is closed to keep the subscribers from playing tricks.As for traders that scalp(mostly high frequency scalpers),the subscriber should be able to identify a good signal by him/herself,there is already a good method that mql5 applies that alerts you if a signal is taking to many trades "Too frequent deals may negatively impact on copying results".mql5 should be able to implement a system that may be delays payment or pays by the hour.But i can totally see how that would be a big problem for the payment systems.
As of payments via mql5,I remember when the Meta Trader VPS service was new there was an option on some brokers to pay for the service directly from your account balance.With the commission based system they can implement the same method:When a trade closes, calculate the commission the trader is to receive from the subscribers trade profit and transfer it to the traders account(which he can have an option to specify which account it is).If a trader takes more than X amount of trades per hour then delay the payments by paying hourly or daily.
To be honest,i don't really think mql5 will ever implement such a system.i think they are comfortable with their current system as it is,plus a lot of brokers have started to offer similar services to what i was referring to above,for instance Fortfs and roboforex(not to be trusted).
For brokers like Fortfs,they have a referral system based on spreads,for example if you refer a customer to them,for every trade the customer takes you are paid a certain amount of the spread that the customer incurs.This system can be implemented to work with signals,i think myfxbook uses this system.
With the way subscribers complain this days about signals and products being expensive,the best way for the subscriber and trader to benefit is to use either commission based or spread based systems.but that is not to say traders will not be greedy.for example with spread based systems,traders could open trades with big Lot sizes to get better payment,with commission based systems traders might start scalping as you stated above or take irrational risks.
With all that said i think each and every system has it's pros and cons,but both the subscriber and the trader should at least have the different options to choose from,and there is no other platform providers that have a bigger opportunity to provide this services as MQL4/5 have with their Meta Trader platform.
Commission based on profit, no profit no pay.
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