Binary options, which are enjoying ever-increasing popularity as a result of their status as innovative investment instruments, are also traded automatically by trading bots. These “expert advisors” – software programs for automated trades – are offered by different brokers under a variety of names, such as “Algobit” or “Binary Option Robot.” Behind the bots are software programs that generate trading signals – and which even execute fully-automated trades.
An overview of how trading signals work
Binary Options Robots constantly monitor financial markets using their own, proprietary algorithms, analyzing trading signals before issuing them to the trader for manual or semi-automated trading, or even implementing a pre-programmed strategy on a fully autonomous basis. The extent to which they develop trading strategies beyond that – a sign of artificial intelligence – has unfortunately not yet been made public. It is however safe to assume that traders could implement AI elements of this nature by combining binary options postings under the “ladder” system (following a progressive series of purchase limits) with a volatility indicator.
Traditional expert advisors certainly support this functionality. However, a distinction should be made as to whether a trading bot is trading in traditional derivatives or binary options. In the latter case, it is frequently crucial to identify the right time to take up an option, as classic stop-loss management does not apply, even using an automatic trailing stop. In any event, programs such as Algobit or Binary Option Robot are able to identify new trends as they begin to form and to react accordingly by trading in call or put options.
Who can benefit from trading robots?
In principle, every trader could use systems like these for trading in binary options, without the need for constant market monitoring. Effectively, that comes very close to allowing trading bots to operate on a fully automatic basis. Brokers report hit rates of around 99%, but this does not mean that 99% of trades generate profits: instead, at any given time, Algobit can identify a trend over a specific period with 99% certainty. This statistic omits at least one piece of crucial information, however: over what interval was this trend identified – an hour, a day, or a week? This needs to be evaluated in order to use trading bots profitably. Nevertheless, bot providers assert that these systems are suitable for traders who focus more on overall profits than on the hit rate. For example, the broker, OptionBit, recommends concluding multiple trades in quick succession using Algobit (the program used by OptionBit), which should result in a number of profitable outcomes as long as the timing is right.
About Binary Option Robot
The programs mentioned above include Binary Option Robot, which was developed by New York-based Binary Soft Ltd. A variety of different brokers offer this program which, in the words of the developers, is designed to “bridge the credibility gap between traders and brokers.” The Binary Option Robot financial tool, which has its own website, automatically carries out real-time analysis, provides recommendations, and, if the trader wishes, can even trade automatically. If you read the testimonials on the corresponding websites (which are illustrated by young traders bathing in cash), you might easily be put off by so much self-serving praise and exaggerated marketing, but don’t panic: these marketing methods are part of a longstanding tradition in the Anglo-American sphere, where even the simplest domestic appliances have been marketed with flowery language for years.
As a trader, take it all in your stride, with a smile on your face: but put simply, there really are tools that allow automated trading – and the proof is the impact that they have had in the world of traditional derivatives since 2010, where they are known as “expert advisors.” Around 70 to 80 percent of worldwide certificate trading takes place through the use of these tools, which can complete 10,000 operations per second. It, therefore, seems inevitable that they would also make headway in the world of binary options trading.
What does Binary Option Robot do?
In the meantime, binary options have become popular with a large community of traders, but anyone who examines them in depth will quickly grasp just how complex they are. Binary options are not nearly as simple as their name suggests, and in truth, traders in binary options have nearly as many possibilities to choose from as in the world of traditional derivatives. Binary Option Robot relieves investors of the responsibility of making these decisions, and elaborate market analysis is no longer required. The trading bot automatically takes care of analysis, with real-time analytical functionality and the ability to respond to the ensuing signals independently.
All traditional tools are available, of course, including real-time streaming prices and dynamic buy and sell signals. The number of assets is almost limitless, with the brokers and their choice of offering being the only limiting factor. Binary Option Robot works with any browser and also provides an intuitive user interface that allows users can get to grips within a flash. A mobile application is in development at the time of writing (February 2015) and should be presented over the next few weeks. Technical analysis is based on well-proven indicators that are used by other expert advisors such as MetaTrader. In total, four recommendations can be generated, depending on the strength of the market signals:
- Buy (call)
- Strong buy
- Sell (put)
- Strong sell
The time factor is materially significant when placing binary options, and Binary Option Robot is designed to address this, with ultra-fast real-time analysis of market movements, generating trading signals just as rapidly.
User reviews for Binary Option Robot
Several traders state in their reviews how well the program works, and that it clearly surpasses other forms of automatic trading. One important fact should be mentioned at this stage: brokers provide programs such as Binary Options Robot and Algobit for free. That is not necessarily remarkable: MetaTrader, for instance, is generally offered free of charge for automated trades in traditional derivatives. However semi-professional traders, in particular, can benefit immensely from a tool like this, as anyone who has a job stands no chance of monitoring the markets full time in order to trade on a consistently profitable basis. Accordingly, users report feeling more positive about their investments over the long term as a result of using trading bots. Investment returns seem to suggest decisive, convincing results, with traders reporting a tripling of relatively small initial sums, from $500 to $1,500, in just a week.