Guide to MT5 signals: Benefits, risks, and how to select one

3D desktop showing MT5 signals

While walking on a busy street, you’ll see people signalling for cabs when they need a ride. Traffic signals switch from red to green to allow vehicles to go ahead. In the trading world, there are signals that traders can make use of in their trading strategies. MT5 signals are a key feature of the MetaTrader 5 (MT5) platform and a popular choice among many traders.

In this blog post, we will explore:

What are MT5 signals?

MT5 signals is a service that allows you to copy trades from other traders, who are known as signal providers. These signals are generated by the signal providers (or expert traders) and can be used to automate trading or guide your trading decisions.

These signals are available for many financial markets, including forex, stocks, and commodities. If you’re new to trading, MT5 signals are a great way to start learning to trade and analyse the strategies of other more experienced traders. Or, if you’re experienced, you can use MT5 signals to save time and effort. 

On Deriv, the MT5 signals allow you to copy the trades of more experienced traders to your MT5 account. When you subscribe to a signal (also known as a call), the provider’s deals will be copied to your Deriv MT5 account.

Now, let’s look into the advantages of using MT5 signals in your trades.

Benefits of using MT5 signals

Here are 5 advantages of subscribing to MT5 signals on Deriv:

Access to expert traders 
Take advantage of strategies developed by seasoned traders by copying their trades. This can be helpful for those who are new to trading or who want to improve their trading strategies by following experts.
Diversify your trading portfolio by subscribing to multiple signal providers with various trading strategies. This can help spread risk and potentially improve your trading performance.
You can save time and effort by subscribing to MT5 signals instead of doing your own market research and analysis. 

MT5 also allows for automated trading, which means you can set up your Deriv MT5 account to automatically execute the trades generated by the signal provider, saving you time and effort.
Transparency in signal provider performance
MT5 signal providers are required to disclose their past performance so you can choose a signal provider with a proven track record. 

This ensures that you can make informed decisions when choosing a signal provider. You can always switch to a different provider if the performance does not meet your expectations.
Risk management
When you subscribe to MT5 signals, you copy an experienced trader’s trades, including their use of risk management tools. You can also set stop loss and take profit orders for each trade you copy, and MT5 will automatically execute the orders when the prices reach the specified levels.

Other key MT5 risk management tools include risk evaluation metrics, such as profit factor and maximum drawdown. These metrics can help you select signal providers with a strong track record and minimise potential risks.

How MT5 signals work

It is essential to understand the mechanics of MT5 signals. Here’s what you need to know to find out how they work:

Signal providers: Experienced traders who create and offer trading strategies (which are the MT5 signals) on the MT5 platform for traders to subscribe to.

Subscribers: As subscribers, you can browse and select the signal providers whose strategies suit your trading style.

Platform integration: Set up MT5 signals on your MT5 trading platform, connecting it to your Deriv MT5 account.

Execution and automation: When you subscribe to the MT5 signals you like, your Deriv MT5 account will automatically execute the signs.

Subscribers can also execute the signals manually on their Deriv MT5 account.

Monitoring and management: Continuously monitor your signal subscriptions and make adjustments as necessary.

How MT5 signals work chart

Risks and considerations

While MT5 signals offer significant benefits, it’s important to be aware of the associated risks. Let’s take a closer look at the possible risks related to MT5 signals and the considerations you should make before using them.

Ineffective risk management
This risk refers to the failure to manage the risks associated with trading properly. 
Risk managementCustomised signals to align with your preference
This customisation allows you to integrate your risk management strategy with the signals you receive, ensuring you maintain control over your risk exposure.
Past performance is no guarantee of future outcomes
A signal provider’s past performance does not guarantee future success. Market conditions can change, and previously profitable strategies may become ineffective. 
Signal qualityEvaluate the signal quality and provider reliability
Assess the quality of the signals and the reliability of the provider. Look for providers with a good track record, transparent trading methods, and a strong reputation in the community.
Not factoring in subscription costs
Signal providers may charge a subscription fee, which can vary widely. Some providers offer their signals for free, while others may charge a monthly fee.
Subscription costsFactor in subscription costs
Consider the subscription cost when deciding whether to use a signal provider. Review the provider’s terms and pricing to understand their subscription fees.
Slippage and latency issues
Slippage and latency are common problems in trading.

Slippage occurs when the price at which an order is executed differs from the price at which it was placed.

Latency is the delay between placing an order and it being executed. Both can impact your trading results significantly.
Performance issuesTrade with caution 
Slippage and latency issues may occur during high volatility and market news releases. To avoid these issues:

– Use a VPS (Virtual Private Server). A VPS is a dedicated server that can improve the performance of your MT5 platform.
– Choose a reliable signal provider. Look for a signal provider with a good track record using a reputable signal delivery service.
– Set a reasonable slippage tolerance. This will help you avoid missing out on trades or getting filled at a price that is too far away from your desired price.
– Use a low-latency broker. This will help reduce the time it takes for your orders to be executed.
Not using regulated signal providers and brokers
Unregulated entities are not subject to the same rules as regulated entities, which means that they may engage in fraudulent or unethical behaviour without consequence. They may take your money and disappear or manipulate your account to generate losses.
RegulationEnsure the regulation of signal providers and brokers
To protect your capital, ensure that your signal provider and the broker you use are properly regulated by relevant financial authorities. Regulation provides an added layer of security and transparency, reducing the risk of fraud or malpractice.

How to choose an MT5 signal provider

Overall, subscribing to MT5 signals can be a great way to improve your trading skills and potential profitability. However, choosing a signal provider carefully and doing your research before subscribing is a must.

Here are some tips for choosing an MT5 signal provider:

  • Look for a signal provider with a proven track record.
  • Make sure the signal provider uses a risk management strategy.
  • Choose a signal provider that trades a style that you are comfortable with.
  • Read reviews from other subscribers.

Once you have chosen a signal provider, monitor your trades carefully and be prepared to unsubscribe if you are unsatisfied with the performance.

How to choose a signal provider chart

With the right signal provider, MT5 signals can be a valuable tool for traders of all experience levels. Start your trading journey with MT5 signals on Deriv MT5 today.

Don’t have a Deriv account? Sign up for a free demo account with 10,000 USD virtual currency and explore MT5 signals.


The information contained in this blog article is for educational purposes only and is not intended as financial or investment advice.

The availability of Deriv MT5 may depend on your country of residence. 

You may also like: