Using robots for automated binary options trading

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A binary options auto trading robot (“bot”) can be utilized to carry out automated binary options trading on a trading platform. The software will attempt to identify suitable trading opportunities and then automatically carry out the trades.

It is possible to connect a signal service to automated trading, in order to instantly take advantage of the trading opportunities identified by the signal service. Some traders that subscribe to a signal service prefer to place their orders manually to retain a higher degree of control, but there are also many who are willing to give up some control to a robot (within the set parameters) in order to ensure that trades are carried out quicker and can take place even during times of the day when the human trader is not available to do things manually.

When using robots for automated binary options trading, you do not have to throw caution to the wind – quite the contrary. There are systems that come with many tools for risk management, including stop-losses, take-profit orders, fixed daily spending limits, and overall loss limits.

With some robots, you will be permitted to adjust the configuration to better suit your trading strategy and personal preferences. There are also platforms where you can build your own trading robot. You do not need to be an advanced software programmer to get started altering robots, because some platforms use the convenient “drag and drop” system for technical indicators.

Your money is always at risk

No matter how great a robot is, you are always putting your money at risk when engaging in binary options trading. The same old recommendations ring true even for robot trading: do not risk money you can not afford to lose and be careful about utilizing leverage since that adds an extra element of risk.

If anyone is promoting a binary options trading robot with promises such as “risk free trading” or “guaranteed profits”, it is advisable to be highly suspicious. You money is always at risk when you use it for speculation. Also, if someone had actually somehow built a robot that came with risk-free guaranteed profits, they would not be in such a hurry to sell it to retail clients online for $499.

Things to keep in mind:

  • Trading robots will have swings, just like other trading methods.
  • The settings for the robot can become less (or more!) suitable over time and you should monitor the performance of your robot. Be ready to adjust the settings if necessary.
  • A robot can very quickly open and close an immense number of positions and accumulate huge wins or losses.
  • Robots can have difficulties coping when news impact the market. A news event that would make a human trader realize that markets will be impacted, can go unnoticed by a robot who is simply carrying out its programming and reacting to market movements rather than predicting them.
  • Binary options are considered a high-risk investment vehicle. If you are interested in robot trading but want to decrease risk somewhat, you could start using a robot for other types of speculation instead, e.g. investing in exchange traded stocks.
  • Regrettably, the field of automated trading is fraught with scams. It is important to do your due diligence and pick a serious provider.

Test running

It is advisable to test run any binary options robot in a play-money demo setting before you put any real money on the line. Still, past performance is no guarantee for how it will perform in the future, and markets can be fickle and unpredictable.

Signal service

Signals are alerts for trading opportunities. A signal service will generate signals and send them out to prescribing traders. Some signal services are free, while others charge a fee. There are also signal providers that will offer both free and paid-for signals.

A signal service can be used for both manual and automated trading. With manual trading, you need to see the signal, make a decision and put in the order. With automated trading, the trading software will receive the signal and make the order.

Signals for binary options are generated based on an analysis of the underlying asset. Typically, the analysis is made by an algorithm.

Using signal services for traditional forex trading is already a well-established practise among traders, while the ability to subscribing to signal services designed for binary options trading is a much more recent development. This is good to take into account when evaluation signal service providers; it might be difficult to obtain a longer-term record of their accomplishments within the field of binary options trading.

Copy trading binary options

Today, there are several trading platforms available online where you can carry out automated copy trading – including automated binary options copy trading.

With the classic version of copy trading, you elect to follow a trader on the same platform and allow the software to copy their trades. Usually, you get to see a portfolio of various successful traders and will be provided with information about them regarding profitability over time, risk profile, etc. You can then elect to follow one or more traders.

Copy trading is especially popular among novice traders since it can help them develop a sense for trading by having the trades made by more experienced traders copied in their own portfolios. Some experienced traders also use copy trading for a part of their portfolio as a risk-management tool. When you follow a trader or traders with a different profile than your own, e.g., favourite binary options types, underlying assets and risk level, it creates a more diversified portfolio.

Before engaging in automated copy trading, ensure you know if and how you can set parameters for what the software is allowed to do. With many platforms, you can use various risk management tools to avoid allocating too much of your bankroll to a single trade.