As with all markets these days, automated trading has also entered the world of binary options trading. This type of trading is also known as algo-trading or in this case, the use of binary options robots. The system uses an electronic platform to enter different trading orders with the help of an algorithm. An algorithm is a series of data analysis and instructions used instead of human decision making. As such, it requires no human intervention because the electronic platform executes a pre-programmed set of instructions at various times. At a time when markets have to process a large number of data and news – sometimes random, many traders have taken this option. It is also used by professional investors, including pension and mutual funds, as well as investment banks and certaining institutional trading firms. Every step of the trading process is handed over to binary options robots who manage all aspects of the trade. Automated trading in binary options requires no analysis on the part of the investor, as advanced software uses the knowledge of experts in both IT and the financial markets who have helped develop the program to trade on behalf of others.
There are a number of factors to look at when deciding to use an automated trading system and this applies to all types of financial instruments.
It should be trustworthy and reliable.
It should be free, or low cost at least.
It should be web-based.
It should be supported by a range of reputable brokers.
Successful binary options trading requires careful market analysis.
The premise behind binary options is to predict the direction or a pattern of an asset’s price, and for some, this does not come easy. However, a certain understanding is useful of the fundamental valuation determinants, as well as the technical aspects using charting systems and graphs. In addition to this, it also requires a significant amount of time – something not all traders will have readily available. As such, automated trading has offered an alternative way for many traders to improve results without having to spend hours sat at the computer or working out the mechanics of a particular binary option (in this case). When these systems first entered the world of trading, binary options robots were less sophisticated, and not the easiest tool to use. Thankfully, development and technology has moved, and binary options automated software is much more user-friendly, increasing its popularity.
Binary options traders with only a basic knowledge may feel comfortable to rely on binary options robots throughout the whole process of trading. This is effectively a form of passive investing with no real input from the trader or investor though an understanding of this market is required to decide whether this is an area worth investing in. They do not necessarily need to sit in front of their computers watching the charts and other market indicators, nor do they need to constantly be vigilant on the markets. In this instance, it is all about placing one’s trust in a trading system which focuses on binary options if you believe this is the best way to take advantage of the market as it currently is.
Binary options automated trading may seem as attractive as a number of other algo trading systems, but they all carry the same market risks as well as a highly competitive industry which tries to win out on speed (of trade entry and exit) as much as anything else. There are no guarantees of profits every time, but advanced systems can generate returns, you just have to decide whether this is something you want to trust in, or whether your own decision making process will work better.
Just as one has to decide whether trading the market with binary options is better than trading traditional Forex, you also have to ask whether your own judgement is worth giving up for the trust of an automated trading system.
Are binary options robots reliable?
This is one of the most commonly asked questions with regards to trading with binary options robots. This largely comes down to researching systems, which in some cases may prove to be more time consuming than learning and trading the market yourself. If one can find a reliable system through recommendations, then as a new form of investment, may be of use to those who do not have time to devote to following the markets closely.
Binary options automated trading makes the whole process of trading much easier for the average trader, as well as those who are entering the binary options market with limited experience. Automated trading and the associated binary options robots offer direction to beginners.
However, putting complete faith in trading robots is not something all will be comfortable with, especially if you have developed your own trading system based on your own decision making process. Let us not forget, that trading through binary options can tie up your capital, and can be quite inflexible, as we have discussed in other sections, so if you are committed to trading the markets for yourself, then understand that the trading signals generated are based on human decisions .
However, the automatic platform does provide the inexperienced trader with the information they would otherwise have to find for themselves. Manual binary options trading requires analysis of charts and an understanding of the markets on a fundamental basis, including trends and asset class specifics. Even so, should one decide to decide with their own decision making process, then there are plenty of sites which can be educational as well as informative in terms of news and data, and this can be quickly assimilated in a day and age where information is much more readily available. This website will aim to provide as much of this as possible. An automated system, may increase a trader’s chance of success, when having limited knowledge of the market and processes, but this can be replicated in many other ways.
The number of automated binary options applications is increasing on an almost daily basis.
Binary options robots have become very popular, and there are plenty of providers coming to market. The more established names are more likely to be a more reliable, for example, those linked to larger financial institutions. We’ve already explained the ins and outs of binary options automated trading, so now we look at how to separate the good from not-so-good.
Binary options robots make it possible for traders to make profit in a number of different situations, particularly those that require swift decisions. A robot can help you get better results faster, and can also help you to trade more efficiently. Even so, learning how to trade in a disciplined manner with rigid risk management systems is also something which is widely advised by all serious market advisers.
As attractive as binary options can be, either manual or through automated systems, the flexibility of trading the underlying asset or spot markets can be just as rewarding with just a little time and effort in developing your own style of trading. As we have stated above, there are many educational sites which can assist you with this, and will allow you to trade with a little more freedom than with the use of options.
If you wish to stick with automated trading of binary options, it is naturally important to find the most reliable and successful ‘robot’ you can find. This in itself is not easy, but here are certain things one can look out for.
How to spot an illegitimate binary options robot
No previous trading history. Look for information on previous trading records. If there isn’t any, this should raise your suspicions. A robot that has made profits should have no reason to hide this. will have no qualms about letting everyone know. A number of robots will promise big profits, but a proven track record will prove this. A legitimate robot will have its trading history clearly visible on its website.
Design of a poor website. This is possibly one of the biggest tell-tale signs of an inferior robot. There are few rogue ‘bots’ who will bother to spend time and money on their website design. If the website looks amateur, it is likely that the people behind it are amateurs too! If the robot site is well developed and stylish and equals the quality of more established names, the input into the site is more likely to be matched by their integrity.
No robot features are mentioned. The website should inform you of the robot’s features. If none are offered, then this will give the investor little to go on and should be avoided. An honest-trading binary options robot will have a wide range of possible customisation options so that traders can tailor the robot in accordance with their own trading parameters.
Exaggerated results and unrealistic returns. Always be wary of binary options trading robots that promise very high returns. A projected income of more than $1,000 a day is clearly an exaggeration, especially if not specified on what basis or account size. A more reasonable expected income based over weeks rather than days, shows a more risk managed approach. Fine tuning and patience is required, along with some experimentation. Any form of investment requires a certain amount of risk, so not all trading robots that promises a guaranteed income are to be ignored.
Only compatible with unregulated brokers. Only the best binary options robots are accepted by the more reputable brokers. If big-name brokers do not trust a certain robot, then neither should you.
Customer support is non-existent. A fraudulent robot site will not be interested in the problems of its clients, so there may not be any contact details on its website. If there are, then try to communicate with them, if only to get more information before signing up to a particular service. If you’re able to get the answers to your questions, then this will instill more trust in the robot program.
Short history in the market. A short lifespan in the market does not necessarily mean a robot is inferior, but it should raise some concerns. It is better to look for automated trading software that has been around for some time, say a few years (at least), which would also prove that their program has been successful for a length of time. Bad ones do not last for long!
In conclusion, there are a number of automated binary options sites out there, and some come at a cost, while others are free to use. We will feature some of the better binary options robots in future articles, but we have plenty of other informative sites which can give you a direct insight into the markets in order for you trade directly yourself. This may well be significantly rewarding, both financially as well as in developing your knowledge base and general up-to-date information on the markets.