Binary Options Auto-Trading: Re-analyzed Commentary
The first airplanes that flew needed very skilled and tactful pilots. The pilots had to understand and demonstrate their technical prowess to ensure safe flights. The grueling training and basics have not changed so much in contemporary times. However, evolution in that industry has diverted the emphasis of reliance from a pilot to a algorithmic system, the auto-pilot. The underlying factor which drove this change was a combination of enhanced technology and better understanding of technical matters related to flying. Those days are not far when flying would solely be done by automated systems.
In the same manner, binary options trading have entered a phase where automated trading is starting to spread among traders. These automated systems of binary options trading use complex algorithms to enter and exit trades. Parameters are intelligently defined in the engine or core of the system in such a manner that results are mostly acceptable. In a striking similarity with auto-pilot, these algorithms incorporate the basics of trading knowledge, analyze the data on preferred patterns and make great buy or sell decisions. The involvement of the trader is often limited to overseeing the operation of an automated trading system, making fine adjustments, etc.
In binary options auto-trading systems you can witness the reliance shifting from the trader to the system, capable of digesting vast information and churning a good buy or sell decision. Here as well the reliance of the decision and of the position’s operation increases manifold. The most basic ingredient that enables this is the elimination of human emotion. Due to overzealous feelings or over cautious behavior, traders tend to revert on their positions or make illogical trading decisions. The automated trading systems eliminate this factor; they do not act on false impulses.
In recent years, there has been an increase in the use of automated binary options trading. In the near future this is likely to increase quite a lot. However, the systems themselves are still not perfect. There are lacunas in engines driving the algorithmic auto-trading systems. For example, some systems are not able to distinguish between false signals, that is, whipsaws. Some traders merely trade on tides generated by fundamental indicators. Therefore, another example is that the automated trading systems solely rely on technical indicators and fail to recognize the importance and efficacy of fundamental tools.
Hence, a near perfect system is still yet to come. That said, one cannot discount how well the current generation of automated trading software are doing. Many of such systems generate a success rate of more than 55% on average, and sometimes more than 65%. That is enough to keep a trader securely in a profit range.
There is one other factor that only evolution will define for us. Theoretically speaking, once the automated systems that are near perfect come in to operation, there should be very less room to maneuver the market anomalies, which is why the price fluctuate. As a result the amount of margin earned by traders should fall and stay limited. If you are on the same page on this, it is probably the best time to start trading binary options now than wait for a near perfect system.