Binary option trading robots are software programs that carry out automated trades according to certain parameters. Binary options robots generally rely on so called signals to carry out their tasks. There are many bundled solutions available online, where a signal provider offers a software solution for automated trading using their signals – a robot. Automated trading is not unique to the world of binary options. Quite the contrary, it is something that takes place on a wide range of markets world wide. There are for instance traders that employ automated trading software and algorithms to trade in stocks, forex and commodities. As a user, you can use robots in various ways and amend what they are allowed to do on your behalf. You can adapt their scope to your trading strategy and preferences. Some binary option sellers give you the option to build your own trading robot from ready-made building blocks integrated in the platform. Warnings The field of binary option trading robots is rife with outright scams and robots that simply doesn’t live up to the hype. Be critical when you dissect the available binary option robots. If something sounds to good to be true… As stated above, automated trading is widespread and a lot of people and companies are making huge amounts of money from automated trading. However, that doesn’t mean that any robot that you find online will make you a millionaire You can lose a lot of money using a robot if you don’t rein it in and keep it on a short leash. Robot trading is especially risky if you allow the robot to use leverage. With leverage, you can end up owning the binary option seller more money than you ever had in your trading account. Using a binary option trading robot To use a binary option trading robot, you give it access to your trading account. The robot must be given authorization to actually carry out real-money purchases and sales in your name. The robot will determine things such as underlying asset, stake, direction and expiration. Of course, it is pertinent to limit the robots freedom to avoid getting an unpleasant surprise the next time you take a look at your account. Be wary of robots that doesn’t allow you to set your own detailed perimeters and limits for the robot. Of course, be too strict with the robot can hamper performance and you might find yourself in a situation where you are making so many decisions that you could just as well make do without the robot. It’s a fine line to balance. Cost Many binary option robots cost money to use, or are bundled with a mandatory signal service that charges a monthly prescription fee. Robots advertised as free of charge are often robots that you can only gain access to if you sign up with a specific broker and deposit money with that broker. It’s a good idea to ask yourself if this really is the best possible broker for you or if you are getting lured into a sub-optimal broker with the promise of a “free” robot. Signals The signals utilized by auto-trading binary option robots are typically derived from technical analysis. In many cases, the signal provider isn’t overly eager to let you know exactly how the signals are generated and what’s required to prompt a transaction order. This means that you can end up with a robot that basically runs on randomly generated signals or doesn’t have any reasonable way of determining which signals to ignore and which signals to act upon. Even with a signal service provider that is seemingly happy to tell you about how their signals are generated and selected, it can be difficult for you to confirm if they are telling the truth or not. This is especially true if you let a robot do your trading instead of you receiving the signals personally and evaluating them yourself before using them for your manual trading decisions. Of course, manual trading and manual decision making requires more work than auto-trading, and you can also more easily fall prey to your short-term emotions and allow them to influence your rapid decision making.