How do you make money with binary options? You do so by making the correct prediction out of two possible options provided for each asset by the platform. You can decide to use manual trading to choose from the available options, or you could decide to go the way of binary options auto trading. Auto trading involves the use of software which is capable of handling the entire trading process for you, from analysis all the way down to trade execution. Binary options auto trader software has to be configured with a trading strategy, be compatible with a brokerage platform and be capable of placing trades automatically on the trader account. Usually, this auto trading software is used for simple Call/Put options and not for complicated binary trades such as the pairs options.
What Goes Into the Creation of a Binary Options Auto Trader?
The binary options market differs from Forex in the area of trading platforms used.
- The platforms used are all web-based.
- Platforms are not all uniform. For instance, the trading platforms designed by Tradologic are different from those designed by SpotOption Ltd. Therefore, the listed prediction options will be different, potential payouts will differ, and there are different deposit and withdrawal conditions, all of which will affect how trades are conducted.
These factors will affect how auto trading software is designed. So what goes into the creation of such software?
- The type of trading platform on which the software will be used. Most of the trading platforms today are all JAVA based, but some programmers have found a way to use other bridging technology to generate signals from other platforms and transmit them to the web-based platforms.
- Compatibility with mobile trading apps is another issue that is to be considered when designing an auto trader. Having software which are capable of trading web-based as well as mobile versions of a trading platform is the desired solution for traders today. Therefore, compatibility with mobile apps is a major consideration in design. Most traders carry their mobile phones wherever they go, but the same cannot be said of laptops and other computers. So would it not make all the sense in the world for an auto trader to have mobile trading functionality?
- Determination of risk is a major component of binary options auto trading software. The major reason why most of the junk software out there are utterly useless is because the creators neglect this factor. Every trader cannot have the same risk settings and the reason is simple. A trader with only $500 in a trading account does not have the same flexibility that a trader with $10,000 has. Most binary platforms fix minimum trade sizes at between $10 and $25. There is no leverage in binary options, so all money staked must come from the trader. Simply put, the $500 trader does not have the kind of luxury the $10,000 would have in surviving losing streaks. So how can they both trade with the same risk settings? This is why a good binary options auto trading software should be able to allow traders adjust their risk settings BEFORE the auto trader goes to work. This will in turn, adjust the investment amount that the binary robot will use in setting up trades.
- An auto trading software works by analyzing past data, then makes a prediction of future price movement based on such data. But there is a drawback: auto traders cannot respond to sudden, unexpected market news and real-time fundamentals.This singular factor is what makes auto traders difficult to rely on for the long term.With such dynamic market scenarios to contend with, it is necessary that the auto trader is designed to at least respond to changes in volume of trade. Trade volumes are not constant. There are periods of the day when trading volumes are higher for the various asset classes. A good binary options auto trader should be able to incorporate information from volume charts to make better trade decisions. So if trading volumes from sellers are more, then the binary robot should be more inclined to making a short trade.
How to Select Trustworthy Binary Options Auto Trader Software
Not all auto trading software is created equal. Given the humongous number of scams in the market today, you simply have to know how to sift out the wheat from the chaff. It helps to use the following guidelines to select a trustworthy binary options auto trader.
- Find out the real face behind the software
One of the easiest ways to fish out auto trader software that is not genuine is to try to find out who is behind the software. Many of the scams we see today feature faceless people, faceless companies and fake reviews written by online actors who are not really who they say they are. Where there is a real face behind the software, you have some level of conviction that there has actually been a genuine attempt at coming up with a product that is genuine.
- Daily Signals
The great thing about the binary options market is that it is possible to generate daily signals. This is in part due to the short expiry times, which make it possible to take on several trades in a day. A genuine auto trading software should be able to generate daily signals on several assets. Most people think that it is risky for a piece of software to generate many daily signals. That is incorrect. The focus should rather be on the money management settings of the software and not on how many trades are opened. If a binary options auto trading software open several trades, but maximum exposure is within acceptable risk limits, then there should be no problem.
- Is there an Identifiable Strategy Behind the Software?
Using an auto trader without knowing the strategy behind its workings is like using a gadget without an operational manual. How would you ever know what the product was doing? It is unthinkable that some traders do not bother to find out what a binary robot is actually doing on an account that contains their hard-earned money. The least you deserve is for the software creators to give some insight as to how the software generates its signals. There are some auto trading software services which actually trade with functional strategies built from the conventional indicators that traders are used to. By showing what indicators are used, how they are combined and the risk settings to the software, traders can at least get some comfort knowing that the trades on their accounts are not random events but carefully thought out processes.
What to Do Before You Trading Real Money with a Binary Auto Trader
Here is a checklist of things you should do before you trade your precious funds with an auto trader.
- In the light of all that has been discussed above, you should ask the relevant questions and seek answers from the software vendor before you buy. What went into the design of the software? Can the risk settings be manually controlled? What indicators and strategy settings have been used?
- Ask to see VERIFIABLE results of the trade performance of the software. Too often, binary robot vendors make outlandish claims of profits that can hardly be proven. Prove the software.
- Most software providers will allow you to try the software before you buy. You have no business engaging with a binary options auto trader software vendor that cannot offer a trial period, yet will charge lots of money to use the software.
The days of simply making buying decisions based on sweetly-worded promotional sales pitches is gone. You have to test every piece of software and ensure it passes your initial evaluation before you make the purchase. There is no leverage in binary options; all the money risked in the market is yours. Do not add to your risk by using bad software. We have looked at some of the auto trading software in the market and come up with some recommendations of software you can try out.
Q: What is autotrading?
Answer: Autotrading software is a piece of technology like an algorithm that handles the entire trading process on your behalf. Apart from depositing funds into a brokers account you can just sit back and watch our trading account grow (or shrink!). The autotrader is excellent for novice traders that don’t yet know how to trade as it takes over the whole process. It also means you can leave your terminal once in a while! The software places trades on your behalfautomatically by identifying trends and patterns, spotting trading opportunities and actually executing the trade.
Q: Does the Binary Options Auto Trader Allow for Human Control?
Answer: A good auto trader should be able to trade automatically, but should also allow for human control of its settings before it goes about its job. For instance, it should be possible to adjust money management and risk settings, as well as allow for determination of trading limits for the day.