Binary options robots, including robot software and apps, have exploded in the last few years. We are going to explain what a ‘binary options trading robot’ is, how auto trading works and what traders need to look out for.
We will also review some robot services, and putting those reviews together helped us find the top robot services. The best binary options robot for you however, will be down to individual choice. We also explain where to get a robots demo account, and learn to use auto trading software and tools. We have also included a robot demo video that shows exactly how to use the robots feature at IQ Option.
Best Auto Trading SoftwareWhile not strictly automated trading, Nadex do offer US traders the ability to use open (working) orders and stops, meaning orders can be filled without the need for a trader to be online.
Robot software or algorithms combine a signal service with automated trading. So the software will attempt to identify profitable trades, and will then place the trades automatically. This automated element takes signal services a step forward, and actually place the trades as well – rather than leaving that to the trader. These systems will have differing levels of risk management – from stop losses, to daily fixed spend limits. The automated element however, does increase the financial risk for traders overall.
There is also a growing trend for brokers to provide their traders with the ability to configure their own ‘bots’ or automated trading systems. These tend to simplify the the process, letting traders “drag and drop” technical indicators into their system. The best bespoke robot features also allow traders to run their robot in a demo account, in order to trial it risk free.
Brokers are keen to promote robots, because they create higher trade volume, and therefore reduce risk for the broker. They can be a great tool for traders too – but as ever in binary options – any promises of profits are an immediate ‘red flag’. Robots, like binaries themselves, need to be fully understood before use, and they are not a route to guaranteed profits.
Do Binary Option Robots Work?
Sometimes. Trading robots will have swings, just like any other trading method. Likewise, the settings by which the robot is operated, might become less (or more) effective over time. So they will need to be constantly monitored for performance.
Automated trading without doubt increases risk – and binary options are already a high risk investment vehicle. But an automated bot running unchecked could rattle through a large number of losing trades, particularly where a news event impacts the market. An event that might make a human trader step back from the markets, is not going to stop an automated robot.
This extra risk can be managed to some extent. Many robots will have daily loss limits, and overall limits. They can also be set to stop if a certain level of profit is reached. Traders need to be aware of all the pitfalls however and treat bots with respect.
Binary Options Robots Reviews
IQ Option provide an excellent ‘self build’ robot feature. One of the strengths of this particular offer, is the ability to experiment. IQ Option give traders the chance to try any robot on their demo account, and even back test it. This is a great way for traders to play with the settings and see what works for them and what does not – all risk free.
Another feature of the IQ Robot service is the fact that traders can find robots that other users have built and perfected – and use those to automate trades too. So if a user strikes upon an effective setup, other traders can emulate that and profit from it too. With copy trading booming, the ability to copy other robots seems a natural progression. IQ Option are the first to offer it.
Read more about the IQ Option Robot in our review.
Compare robot performance for both self-built systems and the auto trading robots of other traders. Any robot can be used to trade, so users can copy the winning bots of other traders.
OptionBit – Algobit
OptionBit also offer access to an automated trading service. Their trading robot is known as Algobit. The system is able to scan the markets for volatility and alert users of potentially profitable trends. The Algobit system is self-contained which means that after receiving the signals, trades can be directly executed through the system itself. The platform uses the Tradologic API and is easy to use.
In fact, the intuitive and pioneering system has already won two awards since its introduction in 2012:
- The Best Innovative Technology Award for 2012
- 2012 Financial Innovation Award (FIA).
How to Use Algobit
With Algobit, traders can choose between trading manually or with signals. When trading according to signals, the direction of the trade will be predetermined by Algobit. All traders have to do is to set the expiry time and the amount to invest.
In addition, traders do have the option to trade against the trend by selecting the opposite side of the predetermined direction. To get an updated chart, just click on the “Analyze” button located on the top left side of the platform.
If the system is set to receive short term binary option signals, the analysis displayed will only show short term trends. These are trades with one to five minutes expiry time. If traders opt for long term analysis, the trends displayed will be longer term trends. Expiry times for longer term trades ranges from 30 minutes to end of the day trades.
Manual trading is where traders trade without the benefit of Algobit’s analysis. Trades can also be done directly through the Algobit platform without having to activate the OptionBit main trading platform. To select the manual trading mode, just click on the “Manual” button located on the top left hand side of the Algobit’s interface. The manual trading mode is similar to trading with normal binary options trading platforms making it easy for traders to get used to the Algobit system.
Once a trade is confirmed, a box will appear at the top of the dashboard. A green box will represent an in-the-money trade while a red box will show an out-the-money trade.
The Algobit robot has been designed to be used alongside the signals and make trading binary options much simpler.
Binary Option Robot Demo
The robot demo video below walks users through the process of creating a robot – both using a pre-built setup, or building one from scratch. It is a full demonstration of the IQ Option Robot feature:
One the large benefits of the IQ Option robot feature is that it can be used in parallel with the demo account. This offers trader a huge amount of flexibility. Firstly, those new to the idea of a trading robots, can play with the robot demo account until they are comfortable. Equally, experienced traders, more used to using automated traders already, can use the demo feature to back test certain setups. The back testing can be run as many times as required, over a variety of timescales – and the result are displayed immediately.
Any robots built, can also be left to autotrade on a demo account. This means any problems, or flaws in the analysis can be ironed out before any real money is put at risk. It also means different configurations can be run at the same time, and judged against each other on exactly the same data. Backtesting can tell you what would have happened, but running the robots in the demo account give you a great ‘feel’ for the performance day to day.
So anyone looking to experiment with robots before diving in and using auto trading bots for real, should probably consider an IQ Option demo account.
Auto Trading Software
Auto trading software does require a small manual element in setting up, but once that is done – as the names suggests – the trading is automated. This form of trading is generally very similar to robot services. A trader using automated software will first setup the software based on the type of trading they are interested in. So the level of investment, the type of assets to trade and the level of risk. Once configured, the software can be left to place trades based on the settings given.
Auto Trading Signals
In theory, signals and automated trading are similar. The difference being that when auto trading software spots a signal, based on data analysis, it will open a trade. A signal provider will simply highlight the trading opportunity, but leave the actual opening of the trade to the user.
Automated software therefore, generates signals based on the algorithms it uses, and will open and close trades based on those algorithms.
There are however, services that will allow trades to be opened based on a real-life binary options trader. Providers will offer a list of live traders, and publish their results. Users of the platform can then decide to copy those traders – choosing levels of risk and investment to suit their own needs.
Auto Trading Scams
The automated nature of this style of trading is fraught with danger. If ever a trader hands control of their trading over to someone else, the level of risk grows hugely. Our scams page details some of the red flags to look for (including a list of scam services), but auto trading in particular attracts a lot of scam operations. Here are a few reasons why:
- Novice Traders – Auto trading software is often aimed at novice traders, or people who do not have the time or knowledge to trade themselves. This group is perhaps easier to mislead, and they are therefore targeted.
- Easy to blame the trader – Linked to the first point. Dishonest providers will simply say the software was misused, and therefore not at fault.
- Control – If traders have put someone else in control of their trading, it is very easy to simply say the money was lost trading.
Warning sings of a scam will include a lack of transparency (results that are not verifiable), forcing users to use a particular broker, and the most obvious – the promises of guaranteed or very high profits. If it was easy, everyone would be doing it. Tread very carefully if proceeding with auto traders. The risk of scams is considerable.