You may have come across some website that is promoting Binary Options Robot Software. In many cases, this is being touted as revolutionary and will no doubt substantially increase your trading returns.
This is, however, far from the truth. Blindly following the advice of some online marketer is a guaranteed way to lose money in the long run.
One of the most important points that one should consider when looking for Binary Options Robot software is which brokers they work with and whether they have verifiable historical trade history.
In the below, we will go through some of the things that you must look for when trying to find the best automated trading software that only works to your advantage.
What is Binary Options Software?
These are often claimed to be automatic trading software that will place trades for the client regularly without the need for human intervention. The client will usually select the amount that they would like to stake on each trade as well as the assets that you would like to trade.
Then, when the client is logged out, the Binary Options Robot Software gets to work by monitoring a number of trading levels and technical indicators. If there is an important signal that appears, the software will place the Binary Options trade for the trader.
Are Binary Options Robots a Scam?
The simple answer to that question is a yes and no. It really does depend on which broker you are using the robot with as well as the nature of the Robot.
With respect to the broker, it only seems logical that no illegitimate broker would allow a trader to make money on their platform with a piece of software. Hence, the robots that are integrated with the broker are unlikely to be profitable.
Indeed, the most certain giveaway that this will be a scam is if the Robot is being offered for “free”. This is a big red flag. There are no developers who would create a Robot that was vaguely effective if it was given away for nothing.
In most of these cases, the Robot provider is encouraged to lose money and hence earn a percentage of the losses that the client incurs on the platform.
On the other hand, there are other Binary Options Robots that are not affiliated with a particular platform and use only regulated reputable brokers. These Robots also only trade the option when they are nearly certain that they will profit.
This Binary Options Robot Software makes use of important technical indicators such as RSI, Bollinger bands and other trend lines. If the software detects a confluence of all of these indicators in a short period of time then only does it enter the position.
Reputable Robot Software
Finding the best Binary Options Robot software can indeed be tough. This is because if the robot is effective, people would be less likely to promote it on the basis that they do not want too many people to spread the word.
Before you start searching for the best Binary Options Robot software, you have to make sure that you know what you are looking for and that you ask the right questions.
One of the first and most important questions that you can indeed ask is which brokers the Robot software provider recommends? Are these regulated and are they reputable? What are their trading conditions. There are a number of methods one can embark on when choosing a binary options broker.
Then, once you have established what broker you will be using, you have to determine how the signals are generated and what is the historical win rate. The win rate is the percentage of the trades that end up in the money.
You also want to make sure that this win rate can be independently verified. Of course the signal provider will provide their historical win rate but when they are linked up with a service such as MyFXbook you can do an in depth analysis of the returns.
Things you will need to check include the maximum daily draw down over the month or the year. This is of course an important thing to monitor as draw downs can seriously impact your returns if they occur.
If there was a particular period where there was a draw down and you were uncomfortable about that, you could inquire about it from the signal provider. Sometimes anomalies occur and are unlikely to occur again. This includes such examples as the financial crisis etc.
You also are advised to examine some of the trades that are involved. This would allow you to get a better understanding of how the Robot operates as well as the signals that it is attempting to trade on.
Once you have found a Robot that you are comfortable using, you need to start testing it out.
How to use Binary Options Robots?
Robots should be intuitive to use but this is not always the case. On some occasions the Robots are incredibly sophisticated and you need to understand what settings to implement in order to trade it.
If the Binary Options Robot Software allows you the benefit of a free trial on a demo account, then you should jump on the offer. Free trials are always helpful not only because you do not have to risk your money initially but it allows you to get a better sense of how to operate the Robot.
The Robot provider will tell you which broker allows them to integrate their API. There are usually only a few brokers that would allow this but these are indeed some of the most reputable.
Once you have set up the demo account with the broker, the Robot provider will give you instructions as to how you would go about integrating the system and connecting to the API.
You would also need to set up the Robot such that it trades with the most favourable trading conditions. This includes the trade size as well as the indicators that you would like to Robot to monitor.
When it comes to trade size, you should keep in mind the max daily draw-down that you observed in MYFXbook. This is because of the fact that a string of losing trades on a large trade size could deplete your account before you have actually started.
A good starting point in terms of account size is about 1-5% of the capital in the account. This will ensure a respectable buffer is in place in the event of a few losing trades on the account.
If you wanted to log out of the website of the Robot provider and leave the account to trade on its own then you may need to make use of a VPS.
What is a VPS?
A VPS is a Virtual Private Server. This is a remote server that is held in a data centre that usually only performs one function. In the case of the trading VPS, the main purpose is to place automated trades with the Robot you are using.
This machine runs 24/7 and does not require you to be logged in to the website in order to operate the robot. Many of the top traders in the world make use of a VPS as they know the importance of having a machine that is dedicated to only one purpose.
Indeed, some of the top algorithmic hedge funds in the world use dedicated servers that run their Robot software. There should be no reason why normal investors don’t have the same tools available to them.
When and What Should I Invest?
Once you have tested the trading Robot for a few days and are comfortable with its trading performance as well as its risk management capabilities, you should consider investing a limited amount in to begin with.
You should start with an amount that you are willing to lose. This is indeed one of the most important mantras in online trading. This is because whenever a trader stakes more than they are able to lose, their emotions take over and they make unforced errors.
The trader should use a similar amount than they were using in the testing stage (1-5%) and select the technical indicators that were giving them the best returns.
Another important word of caution is that the trader should always monitor the account and make certain that the Option Robot software is indeed trading according to the chosen parameters.
The last thing that you want to do is to turn the Robot on and then take a vacation hoping that all will go well in the interim. Although it is likely the Robot will trade according to the set parameters, it is wise to check the account at least once a day and confirm all is well.
Which Robots Should I Consider?
There are a number of Binary Option robot software providers out there but many of them are mainly affiliate marketing funnels for the brokers themselves. You should be vary wary of trading software that promises the world as these are usually binary option scams.
One of the best Binary Option Robot software that we have come across is those of Ace Signals. They are a signal provider that uses advanced algorithms as well as professional signal providers to facilitate the trading.
They allow the traders the opportunity to link up their accounts with the broker’s API and trade the signals automatically should they choose a VPS. They also only use the most reputable regulated brokers such as ETX and Binary.com.
Moreover, they provide free trials such that you can test the signals and even trade them with the broker account that you currently have.