Forex robots have been on the market longer than the retail binary market itself. It was easy to follow the development and progression of forex robots. But when it came to binary robots, it immediately became clear that programmers had to become a bit more creative in the development of the software required for automated binary options trading. Binary platforms were mostly web-based, and this meant that it was not possible to download platforms or software for offline programming. Furthermore,brokers did not use a single uniform platform as was the case in forex where almost every broker offered the MT4 turnkey platform. With such a variation in platforms and trade types, it was clear that binary robots would have to be created differently.
Enter the first generation of binary options robots. The first of this generation of binary options robots were introduced into the market some time in 2012. These robots were basically designed as web browser extensions. The idea was to use the same languages and software extension technology with which modern browsers such as Chrome worked, and use them to produce software extensions which could communicate with the web-based platforms and instruct them on what trades to take.
This required collaboration with the makers of the various web-based platforms, who had to reconfigure their platforms to accept these browser extensions for automated trades to be placed on their platforms. With this breakthrough, newer and more powerful/versatile robots were designed.
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What is a Binary Options Robot?
A robot is a piece of software that is designed to trade options contracts in an automated fashion if the strategy parameters on which the robot is based are met. Binary options robots are of two varieties:
- Semi-automated: Here, the robots generate daily signals and present the trade parameters (usually on a pop-up box) and the trader can choose to complete the trade execution or to pass.
- Fully automated: This format allows the robot to execute the trade on the trader’s behalf. Usually, the trader is required to activate the “Autotrade” function on the software interface for this function to work.
How Do Binary Options Robots Work?
Most of today’s binary options robots can only be used to trade the Call/Put options. The more complicated investment options (such as the In/Out or boundary trade) are not amenable to robot trading.
Binary options robots are programmed with certain trade parameters that aim to detect when prices will rise or fall. There are some robots which have in-built indicators. These indicators can be combined in several ways to produce several trade strategies. Some of these software allow traders to adjust the indicator settings so that trades are only conducted on the trader accounts, based on the settings chosen by the trader.
There are also robots that work by getting signals generated by human traders at the back-end, and executing these signals on the trader’s account. There are also robots that are built to do all trade analysis on the MT4, and then use the information to execute trades on the trader’s account.
How to Avoid Binary Options Robot Scams
Perhaps the greatest problem confronting the binary market today is the massive proliferation of robot scams. The prevalent scams are those which give out “free” binary robots to traders with the promise of making millions of dollars on the trader accounts. This usually comes with a proviso: that the trader makes a $250 deposit into a new trader account using credit cards (MasterCard or VISA) or digital wallets such as Skrill and Neteller, in order to use the robot. Is binary options trading easy? The ads promoting these robots certainly make it look like it is easy, but the reality is that it is not. Usually, the bad robots end up blowing the $250 accounts, and the traders are called up and asked to put in a lot more money. The robots usually target the fast paying short term options. However, the million dollar question is this: if a binary robot could not make profit on $250, what are the guarantees that the results would be better on larger accounts?
An online search of binaries scams will show clearly the scale of the problem. Many traders all over the world have lost huge amounts of money. A trader in Canada was reported to have committed suicide after losing half a million dollars to these scams. You simply have to protect yourself by going for the best binary options robots.
- There are online forums dedicated to posting objective reviews of people who have actually used a binary options robot. You get first-hand information on the best robots and the worst of the worst.
- Ensure that the robot package comes with a trial period. The standard trial period should not be less than 14 days. This will serve as a very good means of evaluating the software before you pay money for the product.
- Request for verifiable trade results from the vendor of the robot. If possible, ask the vendor to show you their real account results, or challenge them to run the software under your supervision for at least 14 days. Any legit vendor that can guarantee the quality of their product would not shirk away from such a challenge.
- It is preferable to test the robot on a live, low-deposit account. Testing of binary robots should not be done on a demo account. This is because demo accounts tend to work with prices that lag or are downright inaccurate. Live accounts tend to provide real-time pricing and real market conditions. Your robot is not going to be used to trade a demo account for money, so why test it on demo?
Advantages of Binary Options Robots
- These robots take away the stress of manual executions. With binary robots, traders do not have to stay on their computers all day, searching for profitable opportunities.
- Traders tend to make errors in manual trading. Some of these errors could be from selecting the wrong asset, entering the wrong investment amount, or even inadvertently choosing the wrong option. The robots help to eliminate these errors.
- Traders who have their own good robots can actually use them to make extra money for themselves by selling the signals that are generated.
Binary Options Robot: Existing Technology
In the concluding section of this article, we will discuss the existing technology out there as far as the binary options robots are concerned. This will help you make a choice of the best binary options robots when you eventually decide to get one for yourself.
One thing you have to know is that the platforms are web-based and this eliminates any chance of being able to host any of the binary robots on a virtual private server. However, this will not matter much with the technology available at your disposal.
So what are the existing binary robot technologies out there?
- JAVA-based applications: The conventional binary options robots which work directly with the web-based applications are JAVA-based software. These software are built as standalone products which can communicate directly with the broker’s platforms to execute trades.
- MT4 Bridge: Some binary options robots are designed to use the charts and indicators of the MT4 platform to analyze the market and generate signals, and these signals can either be passed on to the trader for manual execution, or can be transmitted to the web-based platform for automated execution. This is one of the latest technologies out there as far as robots are concerned.
It is quite obvious to all who have read this article that it can be a quite daunting trying to get the best binary options robot which will enable you achieve good returns on your investments. We have taken the pains to review many of the robots in the market and have come up with a list of software that could very well do the job for you.
Q: What is a trading robot?
Answer: It is a programmed piece of software or code that trades on your behalf. It analyses and monitors the market in order to identify trading opportunities and then opens trades for you.
Q: What are the benefits of a trading robot?
Answer: When a robot is trading your account it saves you having to be stuck at your computer all day. Additionally there are only a certain amount of markets or assets a trader can become expert in understanding, whereas a trading robot can follow many assets at the same time based on preprogrammed parameters. Robots are especially useful for beginners that don’t know how to trade but would like to gain access to the financial markets.