Binary Options Robots
With the modern binary options trading platform, more and more traders are trying to switch to automated systems for trading instead of manual trading, because they are unable to give dedicated time to trading. In a binary options market, the Binary Options Robot is becoming increasingly popular. It is an automated software that automatically trades on behalf of traders. These robots produce signals of asset prices on the basis of market indicators, and automatically place the trades on behalf of the traders after evaluating the trends according to the pre-defined set of rules.
How Binary Options Robot Work?
Binary option robot uses the online platform to enter trade orders after defining the algorithms, and then execute the pre-defined rules. The binary options robot actually allows the investors and traders to define the rules for trade exits and entries. The entry and exit rules are usually defined by the strategies used for binary options trading. Once the rules are fully programmed, the trades are automatically placed using a computer. For automated binary options trading, traders require an application which is usually linked to a broker. These robots are also known as Expert Advisors (EA).
What Trading Indicators are used for Binary Options Robot?
The binary options robot usually receives the signals from the following trading indicators:
Trend – It is one of the widely known trading indicators, which provide the trading signals with respect to how the market evolves on the basis of historical data.
RSI (Relative Strength Index) – This indicator revolves around the recent losses and gains. It generates a signal in an overbought situation (create PUT signal) where there is a high profit close rate than low losses close rates, or in an oversold situation (creates CALL signal) when there are more losses close rates and less gain close rates.
MACD (Moving Average Convergence Divergence) – In an MACD indicator, binary traders get the signals when two moving averages of different time period cross each other.
STOCH (Stochastic Oscillator) – In a STOCH indicator, the last closing rate is compared with the price range of a current period. A Put signal is created when the last closing rate is closed to the period high, whereas a CALL signal is created when the last closing rate is near the period low.
CCI (Commodity Channel Index) – This indicator actually assesses the relationship between moving averages and current rate, and any deviation from the moving average. It basically defines whether a currency pair is oversold (create CALL signals) or overbought (create PUT signals).
These indicators work effectively if they are used in combination with each other. Therefore, whenever you trade in the binary options market, try to use the combinations in order to generate effective results. Moreover, before trading these strategies and indicators, it is important for you to understand them in detail, so that you can take reasonable trading decisions.
Types of Robots – Free and Pro Versions
There are usually two types of robots offered by the brokers and other trading platforms, a free version and a premium version. The features of both the versions vary from one platform to another. However, they generally include:
Free Versions Features – include 1 binary options broker, 2 or 3 trading indicators, 2 or 3 trading systems if any, maximum of 1 or 2 trades, 5 minute trade option, and a fixed amount per trade.
Premium Version Features – The premium version provides more features as compared to free versions and includes more than one binary option brokers, 5 or 6 indicators, 6 or more than 6 currency pairs, free lifetime updates and upgrades, 60/30/15/10/5/1 minute trade option, etc.
Pros and Cons
With binary options auto robots, you do not have to sit in front of the computer, because it trades on the basis of pre-defined strategies. Moreover, there is no involvement of emotions, and traders have no choice but to stick to the rules they define at an initial stage. Secondly, it has been observed that discipline is usually lost if you trade emotionally due to the fear of loss, etc., but binary auto robots preserve discipline even in a volatile market by executing the trading rules as planned.
It allows the traders to trade multiple strategies at the same time, and as a result, spread the risk over different instruments and minimize the risk of loss. However, due to mechanical order, trades may not be executed properly if there is a problem with the internet connection, which would eventually result in lost trades. Therefore, binary auto robots do require monitoring in order to avoid such crashes and mechanical failures.