Automated Trading – Binary Options
To succeed in binary options trading, a trader should have the right combination of investment, time, and effort. If a trader lacks in any of the aforementioned requirements, then generating revenue from binary options trading would only remain a mere ambition, rather than an achievable reality. Fortunately, the advent of technology and the availability of exceptional traders with programming skills has allowed the evolution and development of automated trading software, or “Binary Options Robots” – as they are more commonly known.
A good Binary Options Robot will perform the complex task of identifying trading opportunities, determining the investment amount, and placing orders – all based on simple settings via an user-friendly interface. We’ve explored the world of automated binary trading to review and recommend those robots with exceptional performance, where you can safely trade, and (hopefully!) generate consistent profit as a binary options investor.
Best Binary Options Trading Robots
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Principle Behind a Binary Trading Robot
In simplest terms, a binary trading robot replaces a human being in making decisions related to trading. A “Robot” is merely the name given to a software program which performs a trade (buy or sell) when a number of user-defined conditions are met. The number of conditions can theoretically range from one to infinity. Correspondingly, depending on the complexity, the software may consist of a few lines to several hundred lines of coding.
When the conditions pertaining to a buy or sell trade are met, the robot triggers the corresponding order through the website of a connected binary broker. The order is then placed after considering restrictions, if any, put forth by the trader. The restrictions may include, but not limited to; expiry time, the maximum amount that can be invested in a trade, total number of trades that can be simultaneously placed, which assets are to be traded or discarded, etc.
Choosing a Binary Trading Robot
It’s natural to feel overwhelmed by the many robots offered as numerous websites now offer automated trading. However, automated trading is not actually easy. It takes several months to build a robot which can generate consistent returns, and there are numerous variable to consider. For example, a robot that performs exceptionally in a bull market, may start losing in a bear market and vice-versa. Therefore, it crucial that you use a robot that was adequately back and forward tested in numerous scenarios. Back Testing is the process of testing the program based on past historical data, while Forward Testing or paper trading is the process of validating the trading logic in a live market without the actual use of money at an integrated broker.
TradersAsset Tip – Ensure that the binary option robot you are considering using has existed for a reasonable period of time. This means that the robot has withstood the test of time. BinaryOptionsRobot (our top choice above), is a classic example of this.
How to Trade Using a Robot
Once a funded real account is opened with a binary broker through any of the reputed and popular automated binary option robots related websites discussed above, a trader should arrive at the optimum settings in the following manner.
- Pick the asset you wish to trade.
- Pick a suitable indicator. Always remember that MACD will indicate both momentum and trend. CCI (Commodity Channel Index) is used for trading commodities. RSI, Stochastic and Williams%R are momentum oscillators. So, as you can understand, there is no point in selecting RSI and stochastic. Either you have to select MACD and RSI or MACD and stochastic indicator. Similarly, in the case of commodities, CCI and MACD or CCI and RSI will match very well.
- Try placing smallest possible trades using a combination of indicator(s) and the strategy. Begin with a conservative classic strategy. Avoid martingale. In a volatile market, a trader with martingale strategy is likely to lose his entire investment in no time.
- Allow the robot to trade using different sessions (Asian, European, and US session). Validate the results. Change the indicator and/or strategy and test again using the smallest possible amount. Concentrate on one or two assets at a time. Once you start getting highly consistent results, note the indicator, strategy and trading session.
- Increase the volume slowly. Once the robot starts accumulating profits, add few more assets and follow the same procedure discussed above to arrive at the best possible indicator/strategy combination.
- Build volume and withdraw profits regularly.
The undeniable advantage of automated trading is that a robot is not prone to emotion. When volatility increases, even the most seasoned trader can make mistakes. Another benefit to robot trading is the absence of fatigue. As time passes, human beings can lose concentration due to a dip in energy levels – again resulting in an increased likelihood of making costly mistakes.
As outlined above, if you prepare, test and pre-define settings correctly, a trader can profitably entrust the job of binary trading to a robot.