Trading binary options is associated with certain risks . This type of activity, despite its apparent simplicity, requires deep market analysis and a clear plan of action. Automatic binary options trading, which minimizes traders' participation, can help to simplify this task. Using this trading method, you can increase the number of profitable transactions, but it is important to set up the robot correctly. Read our review to find out how to do this.
Content:
What are binary options bots
Why do we need trading robots?
How Binary Options Bots Work
Advantages and Disadvantages of Using Bots
Top 5 Best Binary Options Bots
How to choose the right bot
Tips for using trading robots
Legality and regulation of binary options bots
Conclusion
Binary Options Bots FAQ
What are Binary Options Bots
Binary options bots are robots for automated trading. This type of trading differs from the usual one in that specialized programs perform market analysis and other operations. Users can set them up so that they open and close trades independently according to specified parameters. However, the effectiveness of such trading directly depends on the settings. For example, if a trader does not specify the moment when the program should close trades, most of them will probably close with a loss at the end of the trading day.
This means that binary options robots make trading decisions based on certain strategies. Of course, bots simplify many operations, allowing traders to abandon independent market analysis. However, they cannot determine the rules for opening and closing transactions themselves. Programs only monitor changes in the rates of financial instruments and open transactions when the conditions laid down in trading strategies are met.
Thus, thanks to algorithmic trading, binary options traders have the opportunity to test their strategies on historical data and select the most effective parameters for them. Robots can also be used in a semi-automatic mode, when signals from them are perceived not as instructions for action, but as an additional filter when deciding to open a deal.
Why do We Need Trading Robots?
There are several reasons why trading robots are used in binary options:
- A binary options robot can analyze market data and make trades much faster than a human, which is especially important when trading highly volatile assets on lower timeframes .
- Binary options trading bots do not feel fear or greed. Therefore, unlike humans, their trading depends solely on the algorithm embedded in them and the technical conditions in which they are used: the availability of uninterrupted Internet, electricity, etc.
- Due to their high speed, binary options trading bots are capable of simultaneously trading multiple assets.
- After setting up the trading bot, the trader can go about his business, and the trading robot will continue to function automatically.
How Binary Options Bots Work
Binary options robots work around the clock, analyzing the market non-stop. This is done with the help of a specialized computer program equipped with technical analysis tools based on technical indicators , graphic patterns and incoming news, following pre-installed strategies and algorithms. It analyzes market data: prices, volumes , indicator values, compares them with each other and, based on this information, makes a decision to buy a Call or Put option.
Algorithms and strategies used by bots
Binary options robots use a wide range of strategies and trading algorithms. They help bots make decisions about buying binary options. The choice of a specific algorithm depends on the characteristics of the asset being traded, the trading time , and the trader's attitude to risk.
Based on the method of generating trading signals , robot strategies are divided into those based on technical indicators and candlestick patterns .
Technical indicators:
- Moving averages – helps to determine the trend and support/resistance levels.
- RSI (Relative Strength Index) – evaluates the strength and direction of market movement.
- MACD (Moving Average Convergence Divergence) – signals about a change in trend and potential reversal points.
- Bollinger Bands – determines the level of volatility and potential overbought/oversold zones.
- Stochastic Oscillator – evaluates overbought/oversold levels and warns the trader about a possible price reversal.
Candlestick patterns:
- Head and Shoulders – signals a possible change in trend.
- Triangles – can indicate both a continuation of the current trend and its reversal.
- Flags and pennants – signal the continuation of the existing trend.
You can learn more about candlestick combinations and methods of working based on them from a special selection of articles on our website.
- Candlestick analysis and binary options.
- Japanese Candlesticks for Beginners and How to Read Them.
- Japanese candlesticks – graphical analysis.
- Using Pin Bars in Binary Options Trading.
How Bots Analyze the Market and Make Decisions
It all starts with trading bots collecting data on prices, volumes and other market information. Then, on each bar, they calculate the indicator values and check if the conditions for opening binary options buy trades are met. If the conditions are met, the trading robot sends the order to the broker's platform and waits for confirmation of its execution. After receiving confirmation, trading robots wait for information from the broker about closing the trade after the set expiration date and about the financial result of the trade.
Advantages and Disadvantages of Using Bots
Advantages of automatic binary options trading strategies over manual trading:
- Automation of all operations. Robots take over the market analysis completely, which saves time and speeds up the trading process. Programs automatically find potentially profitable deals and conclude them, bringing profit without the participation of a trader.
- Customizable parameters. Users independently set the conditions for opening transactions by the robot, which helps to effectively control risks when the market situation changes.
- High transaction speed. Automated systems respond to trading signals much faster than humans, and instant purchase of options often becomes a key factor in making a profit.
- 24/7 operation. Robots trade without breaks and weekends, while the markets remain open, allowing you to make deals even when the trader is resting or absent from the terminal.
- No emotions. Robots trade strictly according to the set rules, excluding the influence of emotions, which often prevent traders from making informed decisions. They work until the conditions for stopping trading are met or the set limit on the account is reached.
Despite the obvious advantages, automated trading also has its disadvantages: 
- Bot patterns. Trading any assets is always associated with risks caused by non-standard market behavior. If the behavior of a currency pair or index changes significantly, bots will continue to make deals despite their obvious loss, since they act according to pre-set patterns.
- Partial automation of trading. Bot developers claim that their programs can perform all operations independently. However, in practice, the trader must still set the rules for opening transactions and configure them. In addition, users are required to adjust the parameters depending on the market situation.
Top 5 Best Binary Options Bots
Now it's time to discuss the bots available on the market. At the time of writing, the following binary options robots were popular among traders:
|
Trading Bots |
Description |
Methods of replenishment |
|
|
More than 20 templates of strategies for autotrading with flexible settings Opening trades based on technical analysis Risk control and competent management of a series of transactions Built-in bridge for receiving external signals Broadcasting signals from TradingView and MetaTrader 4/5 to the Pocket Option platform |
Binance Pay Payment by Visa and Mastercard Pay with 42 cryptocurrencies, including Bitcoin and Tether |
|
|
Regulated broker Large selection of assets Automated trading with various presets Create complex algorithms without programming skills Tools for identifying profitable trades |
MasterCard and Visa cards PayPal Bitcoin |
|
|
Automatic selection of the most profitable assets Opening trades based on technical analysis Smart, proven strategies for all risk levels Quick setup with instructions in your language $10,000 on a demo account to test the robot |
Bitcoin ePayments Neteller Skrill Fasapay |
|
|
Multiple assets for trading Experienced trading strategy developer Flexible trading rules There is no mobile app |
MasterCard and Visa cards PayPal Bitcoin |
|
|
Supports all major currency pairs Trading binary options Call and Put in automatic mode |
Depending on the connected broker |
As can be seen from the table above, the Pocket Option bot has the most functionality, as it can not only perform standard operations to open trades in accordance with the strategy embedded in it, but also be a connecting element between different applications. In particular, it acts as a bridge, transmitting signals from the MetaTrader 4 , MetaTrader 5 and TradingView trading platforms to the binary options broker's trading gateway.
Deriv Bot also boasts a variety of ready-made trading presets and flexible options for their further customization. The modular system for creating an algorithm from ready-made logical blocks is not new and has long been used by developers of software for autotrading, but the broker Deriv has brought the stage of developing trading systems to perfection, actually creating an environment in which you can implement strategies with complex logic and many conditions.
Broker OlympTrade decided to keep up with its competitors and released its version of a bot for automatic trading of binary options — Olymp Robot. This program analyzes the market automatically, using more than 20 technical indicators. The bot offers its users several strategies optimized for different levels of risk. We advise you to start with a demo account and see for yourself the effectiveness of trading systems from this developer.
Our rating is completed by BinBot Pro and Binary Option Robot. Although they are not as popular as the previous three, they also deserve your attention.
How to Choose the Right Bot
There are many offers online to buy robotic systems for trading digital contracts. However, many of them are ineffective. Therefore, when choosing a robot, you need to follow certain rules.
Selection criteria
- Real reviews from traders. When choosing a bot, it is important to consider the opinions of people who have used it. This will help you to learn about its effectiveness and features. Pay attention to negative reviews. Often, software developers buy comments on specialized sites in order to form a positive opinion about their product. Therefore, you can find many positive reviews on the Internet about robots that do not actually bring results.
- Availability of a trial period. Even effective robots can bring losses over short periods of time. Therefore, it is important to have the opportunity to test them on a demo account. It is also possible that the developers have not conducted a proper analysis of their product. Before purchasing robotic systems, be sure to test them in action, for which, as a rule, a trial period is provided.
- Types of trading. Many systems use primitive methods that either do not produce results or are intended more for playing than for serious trading. Most often, such robots use the Martingale method , which is criticized for its high risks. At short distances, such robots can show high profits, but in the long term, the probability of losses is very high. Therefore, it is recommended to use Martingale bots carefully and with small bets, since sufficient funds will be required to compensate for possible drawdowns.
- Price. Keep in mind that if robots are sold at a low price, then most likely their efficiency will be minimal. High-quality and proven products are always priced higher.
What to look for when testing
When testing a binary options robot, try to understand what algorithms and strategies it is based on. The clearer the algorithm, the easier it is to assess its potential and possible risks. In addition, a good trading strategy should adapt to constantly changing market conditions and show decent results both at high and low volatility. Next, we recommend evaluating how well your bot can distribute transactions across different assets and expiration times . Remember the million-dollar tip: you can’t put all your eggs in one basket.
When testing on historical data, pay attention to how the bot behaved in areas of growth, decline and in the sideways. If possible, be sure to check the bot's work on a demo account in real time. This will allow you to assess how correctly the robot's parameters are selected for a specific asset and whether they aren't just an adjustment to historical data. Also analyze the profitability statistics, series of profitable and unprofitable transactions and other indicators.
However, if you are a beginner, avoid using robotic systems at first. First, learn to trade using simple technical analysis, and then move on to choosing suitable bots.
Tips for Using Trading Robots
The use of a trading bot largely depends on trading tactics used by the trader. After purchasing and installing the program, you need to select one of the built-in templates or enter your own parameters, based on which the bot will analyze the market and make a decision on opening transactions.
When you set up the bot, choose a trading strategy that suits you. To do this, install:
- maximum and minimum transaction size
- daily loss limits
- the time interval during which your robot will work
After entering all the settings, you can start automatic trading of binary options. However, when entering the parameters, be sure to consider the risks that you are willing to take. Pay attention to this when setting the maximum transaction amount. If the risks are not taken into account, one transaction can bring a loss comparable to the size of the deposit. It is not recommended to fully automate the process. To avoid errors, you should monitor the bot's decisions. If they occur, make adjustments to the system settings.
Legality and Regulation of Binary Options Bots
This is a rather complex and ambiguous question. The fact is that the binary options market has certain specifics and is not regulated in most countries of the world. What can we say about bots trading in this market?
The constant development of technologies and the emergence of new financial instruments, such as cryptocurrencies , significantly complicate the creation of uniform rules for regulating automated trading in general and binary options in particular. As for the legality of using bots at binary options brokers, this issue remains extremely relevant.
Most brokers explicitly prohibit the use of third-party software in their rules. Violating these rules may result in the client's account being blocked with the inability to withdraw funds. Therefore, before you start trading binary options bots, be sure to check whether your broker allows this type of trading.
We recommend using only official bots of brokerage companies to avoid problems with the withdrawal of funds as a result of such trading.
Conclusion
Automated trading systems, when properly configured and used, can significantly simplify binary options trading, reducing the time for analysis and decision-making. However, such products are not always effective, and some of them are created solely to drain money from users.
To avoid such situations, before starting work or buying a robot, be sure to read reviews from real users. Give preference to popular systems that are widely used. This usually indicates their effectiveness and makes it easier to find reviews.
When reading comments, remember that many of them might have been paid for. Therefore, pay special attention to negative reviews, as they often contain objective information.
Systems that use technical analysis and several trading methods, not limited to Martingale, are considered effective. If this principle is not followed, trading turns into a game where success depends solely on luck.
When choosing bots, give preference to those that have a trial period. This will allow you to test the program in action. Also, do not focus solely on the cost of the product - both cheap and expensive systems may be ineffective.
Binary Options Bots FAQ
Is there AI for binary trading?
At the time of writing, there were AI-powered bots for trading cryptocurrencies, stocks, and Forex . There are no known AI-powered trading robots for binary options trading.
Where is the best place to trade binary options?
It is best to trade binary options with a broker that completely suits you in terms of cooperation. The list of these conditions should include reliability, regulation, a convenient trading platform , low starting capital, bonuses , promotions and social trading tools. All this is offered by companies from our rating of the best binary options brokers .
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