Binary Options trading is growing in popularity day by day. Nowadays, many traders are opting for automated trading systems for trading Binary Options. Like trading Forex and cryptocurrencies with robots, options can also be traded with bots. The process is also referred as algorithmic trading or mechanical trading systems. Many traders also use the bots in order to do multiple trading at the same time. Some of the traders, however, trade Binary Options as a side project and thus find it difficult to focus on the market when concentrating on their main job. These traders can use bots to trade Binary Options. Once a person has got the hang of trading Binary Options it becomes difficult to leave this challenging, exciting field. Bots—this is one way to keep your passion alive and continue working.
Bots are automated systems which can share information, answer any queries and also perform trading actions. Most of the robots analyse price action and exchange rates. They can automatically process data and improve their strategies. Extensive analytics and advanced software are the reason behind this. The algorithms created by the software installed in these bots are based on the current market trends. A Binary Options robot enables the traders to conduct trades on the same dashboard.
The binary broker plays a pivotal role in trading Binary Options. But not all the trading software offered by the binary brokers is compatible with automated trading. If a trader decides to try out automated Binary Options trading then s/he will first have to check whether the brokerage website allows binary trading or not. Most of the Binary Options brokers now offer the automated trading option.
Binary Options Robots over Binary Trading Signals
The binary signals have to be manually operated mainly. Compared to this, the Binary Options robots are obviously presenting a dynamic trading environment.
A trader should be careful when choosing auto trading robots. Make sure that you have the option to open a position rather than the bot opening the position on your behalf. This way the trader will have the last say when it comes to opening a position. The trader has to feed the time of expiry to the robot beforehand. The bot will then use the most appropriate Binary Options trading strategy (depending on the market condition) to trade the underlying asset or commodity. Moreover, if the rules have established by the trader then, the robot can also scrutinize the market for buy and sell opportunities. The robot follows the specific set of rules such that trailing stops, stop losses and profit targets are automatically generated.
Some Advantages of Automated Binary Options Trading
- Lessens anxiety: Most of the traders get emotionally involved when it comes to trading. The Binary Options trader knows beforehand the amount s/he is going to lose in case of an unfavourable trade. Still, a trader gets anxious and may make some wrong decisions. Entrusting the trade to automated trading systems helps the Binary Options trader to keep their emotions in check. Moreover, as the trade is executed automatically according to the set of rules the trader will have no place to question the trade. The bots also help to curb overtrade.
- Backtesting: A trader always strives to make a foolproof trading strategy such that s/he is always in a win-win situation. Here, comes the idea of backtesting. The trading robots are of immense help in this aspect. The traders can thus test the strategy on the historical market data before opening a position and modify their strategy to reduce the risk of losing.
- Disciplinarian: A Binary Options trader may become anxious and pull out of trading fearing a loss or else overtrade with the desire to earn more profits. In such cases, the automatic trading system acts as a strict disciplinarian. This is because the trade rules are pre-established and the expiration period is pre-determined in Binary Options trading.
- Being consistent: A Binary Options strategy has to be constantly updated and modified to increase the win percentage. Still, the trader may lose out due to sudden changes in the market. These losses may haunt the trader, such that a trader facing 2-3 loses consecutively may decide to leave out the next trade. Now, if this trade turns out to be a winner then, the expectancy of the system is destroyed. Therefore, automated trading is the ideal method to be consistent by trading the plan.
- Enhanced entry speed: A trading bot can quickly catch the changes in the Binary Options market and will immediately generate orders so as to win the trade. If required the bot will close the position before reaching the expiry.
As mentioned earlier, automated trading systems allow the trader to trade more than one underlying asset (with same or different strategies) at the same time. With a multitude of advantages, automated Binary Options trading is thus a much safer option.