Robots and automated trading

Binary options robots, or ‘bots’, are becoming increasingly popular. Auto trading software has attracted many traders who are new to binary options. However, they are inherently risky, and binary trading must be fully understood before considering any robot service. Here’s how a trading robot works, reviews the most important services and illustrates what you need to know and be aware of comparing binary trading robots.

 

 

We will explain how and where to get demo accounts and also explain why risks increase significantly when using automated trading.

We recommend that you learn binary options before considering robot services. Although it is sold as such, it is not a good choice for beginners.

Top binary options robots

 

What is a trading robot?

A definition;

A robot is a piece of software designed to identify and analyze market signals, determine suitable trades and execute orders automatically without human intervention.

 

 

Robot reviews

Whether or not a trade is placed depends on whether the market conditions meet the rules and parameters defined by the trader. A trading bot is not ‘intelligent’; it is only execution of orders predetermined by the creator.

These automated trading systems (ATS) have been making headlines for quite some time. Volatile price movements are often blamed on trading bots. From Wall Street to London, this form of trading dominates markets.

Clashes explained

Automated trading robot software and algorithms combine a signal service with automated trading. The software will therefore attempt to identify profitable trades and then place them automatically. This automated element takes signal services a step further and actually places the trades as well – rather than leaving it up to the trader.

The MetaTrader (mt4 or mt5) platform is particularly effective in enabling you to receive signals via the ‘Expert Advisor’ facility. Here you can go as far as creating your own alert system by setting the parameters to be followed by your own expert advisor – or you can download a program from elsewhere and have it work, simply by dragging it into the interface and to drop; .

These systems will have different levels of risk management – from stop losses to daily fixed spending limits. However, the automated element increases the financial risk for traders in general. The feedback and comments we receive mostly focus on whether risks were hidden to traders before they opened an account. Make sure the financial risk is fully understood.

Self-build

There is also a growing trend for brokers to allow their traders to set up their own ‘bots’ or automated trading systems. This tends to simplify the process, allowing traders to “drag” technical indicators into their system. The best custom robot features also allow traders to run their robot in a demo account, to release the risk.

Brokers are eager to promote robots, because they create a higher trading volume, and reduce the risk for the broker. It can also be an excellent tool for traders – but as always in binary options – any promises of profits are an immediate ‘red flag’. Robots, like binaries themselves, must be fully understood before use, and are not a path to guaranteed profits.

Car trade

Auto-trading, or trading via robots, has a number of advantages:

• Car dealers don’t sleep
  An online brokerage platform allows you to trade 24/7 from any device you choose. But of course, you can’t be online all the time, which means there’s always the annoying reality of missing out on potential opportunities – even if you get helpful trading alerts delivered to your phone.
  A robot is always ready; no matter what time it is, as long as an opportunity arises that meets the pre-programmed criteria, the robot will execute the trade.
• Software doesn’t get emotional. ‘
  A Robot does not frantically chase losses or deviate from a strategy. It acts indifferently based on the criteria set for it.
• Robots are not overwhelmed.
  All the markets are open and opportunities abound. It can be easy to get stuck, to let fatigue creep in, and to make mistakes. None of this is for a robot; large amounts of data can be processed instantly, and the right steps can be taken at the right time – no matter how ‘hectic’ the market may seem.

There are also some disadvantages associated with car dealerships:

• Robots do not respond
  if markets are not affected by an outside event, a robot will continue to blindly follow the settings given to it. Common sense does not apply to a robot.
• They are often mis-sold.
  Robots attract fraud. Our scam section below highlights how to spot this, but with the automated element, dishonest services can suggest ‘easy money’ can be made. This is simply not true.
• Increased risk
  automation means a certain loss of control. Although many risk management techniques can be applied (stop losses, and maximum losses, etc.), there is no doubt that the risk is increased.

 

 

Scams

The automated nature of this style of trading is fraught with danger. If a trader ever hands over control of their trade to someone else, the risk level grows tremendously. Our scams page has some red flags to look for (including a list of scam services), but bots and car trading in particular attract a lot of scam operations.

Here are some reasons why:

• Beginner Traders  – Automated trading software is often aimed at novice traders, or people who don’t have the time or knowledge to trade themselves. It is perhaps easier to deceive this group, which is why they are targeted.
• Easy to blame the dealer  – linked to the first point. Dishonest providers will simply say the software is misused, and therefore not wrong.
• Control  – If traders put someone else in control of their trading, it is easy to say that the money was lost trading.

Warning signs of a scam will include a lack of transparency (profit rate results that cannot be confirmed), forcing users to use a specific broker, and the most obvious – the promises of guaranteed or very high profits. If it was easy, everyone would be doing it. Be very careful when proceeding with car dealerships. The risk for scams is high. Here is a checklist of warning signs:

• Get quick fast marketing
  If a service promises huge profits, with little or no effort, it’s probably a scam. In the same way, any phrase like ‘zero risk’, ‘100% win rate’ or ‘easy money’ should be considered a lie.
• Cold Calls
  Legitmate services will not cold call you.
• Managed accounts
  It is a very bad idea to allow someone to trade for you or trade with your money. Even with auto trading and robots you need to be in control.
• Bogus-
  bonus conditions Some bonus conditions include closing your initial deposit. Check the terms and conditions before parting with cash.
• Sales funnels
  Some robot systems force you to open an account with a specific broker. This is usually not the best choice, and often unregulated and unreliable.
• Free robot services that are not free,
  if you have to join a broker and make a deposit to get signals – it was not free. Free services require no deposit.

Some blacklisted services that claim to provide signals and automated trading are:

The Brit Method / Jason Taylor
Copy Buffet
Millionaire Blueprint
Ultimate4Trading
QuantumCode

This is an easy way to make money, and should be avoided by ALL.

Settings

The settings or indicators used in a robot are very important. They will determine the success or otherwise of the strategy. The number and flexibility of settings or parameters within a robot platform is a useful comparison factor when assessing different firms.

The best settings will depend on the individual trading strategy – but the basic parameters should not be overlooked. Trade size and expiration time are two simple settings, but traders can forget to check if the size and time frame they want to use is available with the robot they are comparing.

Moving averages and volume are popular indicators, and almost any candlestick pattern can be set as a signal. The self build bot at Binary.com offers the most flexibility of settings. Some of the poorer services provide none. Some programs also offer money management settings. Martingales are best avoided, especially for beginners.

Demo Accounts

The better companies offer a free demo or virtual account to try out the service. This allows traders to change settings and find a money management plan that works for them. The best demo accounts will be open and even topped up when the balance runs out.

Some demos may download software, but the majority will not. Login details will be transferred to the correct money account when and if upgraded. Many providers offer mobile apps, and again most are compatible on Android, iOS (iPad and iPhone) and Windows.

Review of Binary Bot

Binary.com also provides the ability to design and create an auto trading bot. Binary.com is licensed in the UK and Malta, but is based in Malaysia and popular in the region, especially Indonesia and Singapore.

Often called the broker for advanced traders, Binary.com now offers a range of ‘advanced platforms’ – including the ‘Binary bot’ platform which provides the ‘toolkit’ for users to create their own algorithm for automated trading software.So the platform introduces self-build tools to build yourself, but – as is often the case with this brand – it also caters for the more advanced customer. The available tools and settings offer greater depth than with competitors. This allows users to direct more complicated strategies. In turn, this can lead to more accurate and specific trading.

Binary Bot matches the rest of the Binary.com look and feel. Some of the distracting elements of other platforms have been removed and replaced with more depth and features – typical of the brand.