Those of us who’ve been trading for some time have seen quite a lot of change over the years. The world of binary options trading is always evolving and innovations are constantly being introduced to the global trading community. One of these areas is auto binary options trading, where robots actually place the trade while the trader gets to enjoy any profits.
Auto binary options came out of the popularity of binary trading overall. As binary trading started to attract traders worldwide, a growing trend started to present itself that used automated binary options trading bot software that developed from stocks algorithmic trading.
Algorithmic trading, also called automated trading, is the use of electronic platforms for entering trading orders with an algorithm. From there, these electronic platforms execute pre-programmed trading instructions whose variables may include timing, price or in many cases initiation of an order by a robot without human intervention. Algorithmic trading is widely used by investment banks, pension funds, mutual funds, and other institutional traders, to divide large trades into several smaller trades to manage market impact and risk.
After it was clear that the popularity of binary trading would not falter, a number of individuals started to believe that they could apply the principles of algorithmic trading to the binary options world. As a result, binary options robots were created that acted as software programs to place trades automatically on behalf of the trader.
The way it works is that a trader typically pays a set fee to the automatic binary options provider for downloading the robot, he downloads it and the program will execute trades on your behalf according to requirements that you set in the system. The robot will pair your requirements with market insight and binary trading signals that are built into the software.
A good robot is only supposed to execute a trade if it believes it will end in a return based on the technical data built into the system’s algorithm. Additionally, you can adjust your manual requirements at any time, providing human intervention in the process. Once the parameters are set and the program launched, the robot will commence to trading binary options on its own. Robots, or bots, have been used in standard forex trading for quite some time but these new robots are designed specifically for binary options trading.
One of the largest benefits of these programs for an advanced trader is that they can greatly reduce or eliminate the amount of time needed to perform technical analysis. They can also benefit new binary options traders who have yet to master the task of reading charts and graphs correctly.
That being said, one of the major disadvantages of these automatic binary options trading systems is that robots do not have the ability to analyze fundamental analysis. When news and current events impact the value of an asset, a bot would only be able to take action after the value shift has occurred. So, as a trader, you’ll still have to monitor the markets if you want to take advantage of shorter term expiration times that may have an immediate influence on the value of a financial asset.
For those of you who are just starting out and attracted by the idea of using a binary options bot, it doesn’t mean that you can forgo any education on the markets or identifying signals. In order to achieve consistent returns – bot or not – you need to learn about the markets correctly so you can set the right parameters as well as take advantage of all profit making trades. Many traders find that when they start learning they actually enjoy placing trades on their own without an automated system and since platforms these days are quite simple to use, there’s no hassle either.
Before you subscribe to an automated trading service, you also need to understand the fees you will have to pay. You need to ensure that any fees will be paid back in the form of your profits. It’s hard to know this straight away but you should be able to research the reliability of the system so you can estimate if it will be worth it financially.
If you do decide to use an automated system, always ensure that it provides you with security. Just like you would check the security measures your binary trading platform has, you need to do the same with your automated bot. Since the bot will be trading with your money, a high level of security is a must. You want to ensure that you won’t encounter any problems that could cause the robot to act outside the parameters, placing incorrect trades that could prove costly to you.
Remember that you can trade binary options without the use of an automatic binary options provider. While using an automated system helps some people, it’s not for everyone. If you speak to some of the most accomplished binary traders, you’ll find that all you need to succeed is to commit to learning more about the financial markets, identify binary trading signals and take advantage of opportunities as they present themselves.
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