Trading Robots

Introduction

To make the most out of trading you need time, patience, practice and of course, a great broker! Sadly for so many having the time to really dedicate to your trading can be very hard to find, this is where trading robots can be a real asset to the every day trader.

Trading Robots or ‘bots’ is the colloquial term for algorithmic trading which is the use of trading robots along with other automated trading software. The use of these ‘bots’ has exploded in recent years with traders taking advantage of using complex mathematical algorithms to examine market data and, in turn, use this to make highly profitable and low risk trades.

Any trader can use trading robots and indicators in their day to day activity, the systems are often fully automated and integrate with brokers and online platforms. When you sign up with an online broker they will list the trading robots that are compatible with their platform. We’ve taken a detailed look into the ever growing area of trading robots to help you decided whether or not this type of trade is for you.

How Robots help Traders?

Binary Options trading robots are essentially a set of programming code that analyses and trades the market on it’s own. Sound like something straight out of a sci-fi movie? Well, it’s not as complicated as you might think. Although the programmes used are made up of complex code they are generally simple and straight forward to use. Using parameters set by the trader the sophisticated software makes signal-based, algorithmic decisions to make trades, we’ll look into exactly how this works later in this article.

One of the main benefits of using trading robots is their convenience and the time saving element. They allow you, the trader, to set trading criteria and then let the ‘bot’ trade to your chosen strategy allowing you time to concentrate on other areas or even trade while you sleep! They also remove the human element from trading, taking the emotion out of the trade and working only on facts.

Below is a list of simple steps to help you get started:

Choose a robot service

Before you start looking into what robot service to choose we would highly recommend that you learn how binary options work and complete some trading on your own. Binary options is a volatile and fast moving industry that must be understood, although a bot can be a real asset it cannot work without the strategy and parameters set by the trader, therefore taking some time to learn the industry and markets if you’re a beginner would be advisable.

When looking for a robot service you want to look out for some key areas such as how customisable the software is, is it from a reputable provider and what tools does it offer? Things like risk management features, customer support if you experience any difficulties using your bot, mobile technology and strategy support can all be included depending on the provider. You’ve also got free and paid for services, don’t be fooled though, paying for a bot service doesn’t always mean it will be superior to some of the free offerings.

We’ve taken all of this into account and have put together a list of our recommended automatic trading services for you to review and find the service for you.

Install the software

Once you’ve selected the trading software you want to use the majority of services will require you to download and install some software. Don’t worry, you don’t need to be a qualified coder to complete this step; quite often this will be linked to the broker that you have signed up with and is usually easy and straight forward to set up, the broker will take you through step by step to ensure success. In the unlikely event that you do encounter any issues the broker will normally have a support service on hand to help and if you get really stuck there are a number of services that you can access via a web browser!

If you like to trade on the go, we would recommend looking for a service with a good mobile app, again, assistance with the set up of the mobile trading platform should be included when you download the original software and is a great addition for the busy trader.

Sign-up with a broker

In order to trade with a robot service you’ll need to sign up to a broker. Normally, once you have selected the automatic trading software that you want to use it will automatically recommend binary options brokers that are compatible with the software for you to choose and open an account with. If you’ve already got a favourite broker check out their site for information on the robot services that they are compatible with.

If you’re new to trading, you need to ensure you’re selecting both a reputable robot service and broker, we’ll cover how to spot a scam bot service later on in this article and you can check out our review pages for a guide to the best brokers out there.

Programme the robot software

Once you’ve selected your service, downloaded the software and opened the relevant accounts you’re ready to programme the software. This is a crucial step as the technical indicators that you set will be the parameter that your bot trades from. Think about things like trade size and expiry time, volume and moving averages. It’s also a good idea to set daily loss limits to minimise your losses where possible. We also recommend setting your robot to work in a demo account first and supervising it for a while to ensure that the parameters you’ve set are working as you thought.

How Options Robots work

In the simplest of terms, Binary Options Robots are a set of programming code that analyses and trades the market on it’s ‘own’. The intuitive robot software, along with automated trading algorithms take the already well used signal service a step further. By combining automated trading with signal service it means that the software will not only attempt to identify profitable trades but can then also place the trades for the trader. This is what makes this type of trading so attractive to investors who may not have the time to trade manually, it can also be a helpful start for beginners who may lack the confidence or experience to trade on their own initially.

To start using a Binary Option Robot you first need to choose an automated trading service that is compatible with the broker you are choosing. You may be required to download and install some software to your device / computer before you can start. The majority of them will come with a demo account that you can use to test your bot before setting them free in the real market. This allows you to check that the bot is performing as you would expect and that all parameters that you’ve set are working correctly. It also gives you the opportunity to tweak and adjust your settings as required without risking any unnecessary losses.

Traders have two options when choosing a binary option robot, one is to set parameters and then allow the ‘bot’ to independently analyse the market, find the signals and then place the trades, this is called auto trading. The other option is to receive the signals but decide yourself whether or not to execute them, this is signal trading. Both of these methods use the algorithms ability to analyse large amounts of data at speed and without any human emotion. As already discussed, auto trading bots will place the trade while signal trading bots will provide all of the information to the trader but the trader will still decide whether or not to go ahead with the trade, keeping ultimate control. Using a binary options robot can be of benefit to both the experienced and novice trader, it can help free up time for a more experienced trader who may be confident to set and monitor parameters for an auto-trading bot allowing them time to concentrate on other areas. For the beginner, a trading signal bot can be helpful, providing advice and information on which trades to make, allowing the trader to learn from how the bot has read the market and come to that decision.

Benefits of Software Automation

There are many benefits to using the types of automated software we have discussed in this article, below is a list of some of the most common benefits:

• Great to help novice traders learn how to analyse the markets
• They can save time. This can be a particular bonus for the day trader as the bots can be used to trade while they sleep / complete other tasks
• Trading robots are very accessible with many of them free or inexpensive
• The bots are able to trade impassively – taking the human emotion element out of the equation
• They are compatible with most broker platforms
• They are able to process a much larger amount of information in a much shorter space of time making them more efficient
• They are customisable and convenient, enabling you to set them to suit your strategy and parameters etc
• Can be used by traders of any level of experience

How to find legitimate robot software

Like anything, there are always pros and cons and this is no different when it comes to binary options trading robots. Unfortunately the automated nature of the software means that it attracts many nefarious operations, the majority of these are what are known as ‘scam robots’ which are designed to take advantage of traders resulting in financial losses.

It’s important to know the warning signs for these scams which usually always include a lack of transparency, promises of high or guaranteed profits and claims that cannot be verified. In these instances the old saying of ‘if it seems too good to be true, it usually is’ is one to follow.

To help you navigate what can be a tricky landscape we’ve put a list of red flags to look out for when choosing your trading robot below:

• Cold Calls – you should not receive cold calls from a legitimate service
• Sales Funnels – a scheme that forces you to sign up with a specific broker are not normally a reliable choice and more of than not will be unregulated
• Marketing that is ‘too good to be true’ – look out for false assertions that cannot be verified
• Check the credentials – if you can’t find a registered address or company details it’s worth delving a bit deeper

In summary, binary options robots can be a useful and effective tool for traders when used correctly, they can help save time, educate, inform and ultimately help make more profitable trades than the trader could otherwise make on their own.