Why were binary options robots created? One of the attractions of binary options trading is convenience. You can easily put your market knowledge to work with the accessibility of binaries and the right broker.
What if things could be even simpler? What if you could put your trading activity on ‘auto-pilot’? The essence of a binary options robot is that it is a software program which tracks signals for you and then acts on when, where and how to trade, without your intervention. However you are correct if you think this sounds too good to be true. Traders do rely on automation to some extent, but you cannot place your entire trading strategy in the control of one single algorithm.
Below we will review binary options robots to help you make up your mind:
Robots: how do they work?
Essentially a piece of software, a binary options trading robot is coded to analyse and identify market signals, identify suitable trades, and then action those trades on behalf of a human trader. If the parameters set by the programmer are met, then only will the robot trade. This robot does not rely on artificial intelligence, but is purely executing specific orders within parameters set by its creator.
The backtesting approach is usually used to define the parameters, where historical data is consistently reviewed and applied, to ensure a realistic reflection of the market is captured in the algorithm of the software.
Usually you can sign up for robot services, and then use it with your preferred trading platform, however there are those services which suggests only particular brokers. Independent services are held in higher regard as they will not generally advocate one particular broker, and should your options be constrained, it is indicative of simply a sales ‘funnel’ for a particular broker, and possibly inaccurate.
As part of signing up with a robot service, you will have to enter your personal details and select your preferred broker. Then choose the assets with which you wish to trade, confirm the amount to be used for each trade, the maximum number of trades and the total amount of loss you can accept in one day. Once you click confirm the robot will jump into action and execute those trades for you.
Robots and Automatic Trading: How Can They Help You?
If it offers real benefits, then only can a robot be worthwhile. Does it make you money and does it make your life easier? Here’s some possible advantages:
– Robots don’t sleep
You can trade 24/7 on an online brokerage platform, but it is not possible to be online constantly, which could mean you may miss out on good opportunities, even though you may get great trade alerts sent directly to your mobile device. A robot is always available and always working, and can trade whenever the programmed parameters are met.
– Robots don’t get emotional
It continues it’s work clinically based on it’s pre-programmed criteria, and does not diverge from a set strategy based on a hunch, or chase losses frantically.
– Robots don’t get overwhelmed
When presented with multiple opportunities and open markets, it is quite possible to get bogged down, over tired and make mistakes. A robot does not have to deal with these issues, as it can process massive amounts of data instantly, and take the correct actions at the right time, regardless of the frenzied market.
Do Binary Options Robots Work?
Of course robots are not infallible. Consider the following before placing your entire trading strategy on automated trading:
Beware Of Scams: a trading robot is only as intelligent as its creator
Always be wary when presented with massive success rates, or service providers who does not divulge much regarding the logic used to govern the program. Automated trading systems built by professional trading houses are very complex, are constantly being refined and are well protected. A robot that is offered for free, even though they may claim it is commercial-grade, should be approached with care.
Markets Do not Always Behave Logically
Robots cannot adapt to changes in the market, as it is set up with the capacity to operate only within certain parameters, of which the maximum level of loss you can manage being the most important. It merely follows the rules assigned to it blindly.
As we all are well aware, markets are volatile, illogical and has no rationality. Robots are not capable of adapting to a changing climate and will carry on regardless as it has been set up according to past performance data.
Robots Versus Signal Services: What’s the Difference?
Signal services are companies that provide trade signals, which can either be trade recommendations made by real people, or generated through automated market analysis. They appear similar to trading robots as they are often closely linked, however you as a person receive the signal as advice and then decide to trade, while robots make the trade for you. You are relying on market signals when you regularly read blogs or newsletters, or receive market related news alerts on your mobile. Interpreting this news and knowing what is going on, are all part of successful and effective trading.
The MetaTrader platform uses its Expert Advisor facility to send signals to traders. You can use this facility to create your own parameters for alerts to be sent to you with your own Expert Advisor. Alternatively you can download another program and drag and drop in into the interface to do the same work.
How Much Automated Trading is Right for you?
Some auto trading can be very beneficial to allow you to become familiar with the market and binary options and spot trading opportunities. However in the process your focus should be to refine your own specific trading objectives and your attitude to risk. In order to achieve this, you require a reliable and reputable brokerage service with up-to-date information from reliable sources. You may feel that the automated execution of trades should be seen as part if this (especially if a screen where you can access the info is not readily available), but the priority should be that robots only helps to put your strategies to work and should not override it.
Best Binary Options Robots
IQ Option provides a free robot builder where traders can either build their own bot, or copy another one that is profitable. This can be done with a demo account, so that money need not be risked when trying it out.
Daweda offers Automated Trading Software (ATS) to their clients. Because Daweda operates an exchange, traders have an advantage with using a robot. They can instantly get the price they set, while manual traders may miss the price they wanted.
Because ATS is a growing exchange platform, the service is a recent addition and indicates the strength and size of the broker, and they are not prepared to take on over the counter brokers with their own robot service.