Trading signals are actionable alerts that provide buy or sell suggestions based on market analysis. They can be an invaluable resource for anyone trading on platforms like Deriv, helping with identifying potentially attractive trading opportunities. In this guide, you’ll learn what a trading signal is, discover the main types, see how to use trading signals on Deriv, and understand their strengths and limitations.

What are trading signals and why do traders use them?

Trading signals are recommendations to buy or sell an asset at a certain price and time. They’re based on analyses carried out either by humans or automated systems. The main goal? To help you make confident trading decisions, even if you don’t have the time or experience to analyse the markets yourself.

On Deriv, trading signals can be especially useful for those who want to tap into the experience of top traders, automate their trading, or simply save time. Using signals on platforms like Deriv MT5 gives you access to expert insights and automated execution, helping you potentially spot more opportunities while reducing manual effort.

Types of trading signals

Understanding the types of trading signals can help you choose the best fit for your trading style.

Manual vs automated signals

• Manual: Human experts generate and distribute signals based on their own analysis. You receive these and decide whether to act.
• Automated: Algorithmic trading systems or bots scan the markets continuously and execute trades based on coded logic—these are often what you’ll find with Deriv MT5 signal providers.

Technical signals

These are based on indicators and chart patterns (e.g., MACD, RSI, moving averages) and are commonly used in automated strategies.

Fundamental signals

Produced when major economic events or news releases trigger market moves, such as central bank decisions or corporate earnings.

Algorithmic signals

These combine technical analysis, mathematical models, and sometimes machine learning, with trading decisions handled entirely by computer models—often seen among top signal providers on Deriv MT5.

How are trading signals generated?

Wondering how to generate trading signals for your own use or to share with others? They come from various sources:

• Technical indicators: Calculations on price data (moving average crossovers, RSI overbought/oversold alerts, etc.).
• Chart and price patterns: Head and shoulders, double tops/bottoms, or trendline breaks.
• Economic news and analysis: Based on calendar events—interest rates, NFP, GDP, etc.
• Algorithmic strategies: Professional traders use powerful scripts or expert advisors (EAs) that analyse multiple indicators and rules at once.

How to use trading signals on Deriv MT5

A trading signal is essentially an instruction or suggestion—based on market analysis—to enter, exit, or modify a position in the market. For instance, a trading signal might recommend buying EUR/USD at a certain price with a preset stop loss and take profit.

On Deriv MT5, you can act on signals in two main ways:

• Manual signals: You receive an alert and decide whether to take action.
• Automated signals: You subscribe to a provider, and their trades are copied directly to your account, hands-free.

This automation means you don’t need to sit by your screen all day or worry about missing trading opportunities.

Using trading signals as a subscriber

Subscribing to trading signals on Deriv MT5 is straightforward:

1. Open your Deriv MT5 platform and select the ‘Signals’ tab.
2. Browse providers shown with performance stats, trading style, and risk scores.
3. Select a signal provider whose results align with your goals and risk profile.
4. Click ‘Subscribe’ and enter your risk parameters (volume, stop loss, etc.).
5. Once subscribed, your account automatically copies the provider’s trades.

On Deriv MT5, all signal providers have their trading history, risk rating, win rate, and monthly performance visible. This transparency helps you decide who to follow and avoid signals that don't fit your risk profile.

Whilst copying a provider's trades, you will remain in full control—pause, adjust, or cancel your subscription at any time. It is also recommended to test a new signal provider's services using the Deriv demo account before committing live funds.

Becoming a signal provider

Think you’ve got a solid trading strategy that you’d like to share with others and benefit from an additional income from your subscription fees? You can sign up as a signal provider in a few simple steps:

1. Register as a provider through MQL5.com.
2. Link your live Deriv MT5 account.
3. Your trades become visible for others to follow, and you can earn commission based on your subscriber count.

Risks and limitations of trading signals

While trading signals can save time and bring professional strategies to your fingertips, there are some risks to keep in mind:

• No guarantee of profit: Even seasoned providers can have losing streaks.
• Different risk appetites: A provider’s risk tolerance may not match your own.
• Market volatility: Automated trades may perform differently in fast-moving markets.
• Over-reliance: Signals are tools, not foolproof solutions. It’s best to diversify and use your own risk controls.

Always review a provider’s track record, trading frequency, and overall style. Consider testing with a small amount or on a demo account first.

In conclusion, trading signals offer a practical way to gain insights or automate your trading. You can choose to follow the trades of experienced investors, set your preferences, and let the technology do the rest. However, always remember—trading involves risk, and past performance isn’t always indicative of future results. Use signals wisely as part of a broader trading plan.