The use of binary options robots – “bots” – and other automated trading software and apps has exploded in the last few years. Here we explain how a trading robot works and review the top services 2020, and list what you as a user need to know and look out for. We also show where to get a robot demo account to trial the service, and teach you to use auto trading software and tools.
The best auto trading service for you will be down to individual choice, so read on to get all the facts.
Top Robots and Auto Traders
How an Auto Trading Robot Works
Robot software and auto trading 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.
Will a Robot Make You a Better Trader?
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.
Reviews of Auto Traders
Binary Bot from Binary.com
Binary.com also offer the facility to design and run an auto trading robot. Long the broker for advanced traders, Binary.com now offer a range of ‘advanced platforms’ – one of which includes the Binary bot platform (Screenshot below).
This platform gives traders the ability to put together an automated trading system. As might be expected from this firm, the feature offers more depth than some of their rivals – again appealing to advanced users. The criteria available for putting together the algorithm offer greater choice than elsewhere. The process allows extra layers of complexity to built in, enabling users to get very specific about their trade ‘triggers’.
Binary Bot follows the Binary.com look and feel, which is fairly unique. The visual ‘fluff’ has been trimmed back, and replaced with more features and usability – typical of the brand. Read more about the platform in the Binary.com review.
Other 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.
Signals – Essential to Auto Trading
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.
Copy Other Traders
There are also 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. This kind of “almost auto trading” is called copy trading.
Robot and 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.