Recently we made a big addition to our site in the form of a huge list of binary options signal providers and auto-trading services. If you are wondering what auto-trading is all about and what these “bots” are for, you are in the right place. Before you sign up for any of these services, it is really important for you to understand what they are and how they work. A lot of them promote themselves as effortless solutions to all of your trading problems, and some of them can legitimately help you out—but they all have limitations.
First things first …
What Is an Auto-Trader? What Are Signal Services? What is the Difference?
A signal service is any service which generates binary options trading signals or alerts. Signals simply let you know that a trading opportunity exists, and that you may want to take it. An auto-trading program or a binary options robot (“bot”) is software which places trades automatically for you based on the signals generated by alert providers. Some of the services on our list simply send out signals via text messages or email; others include auto-trading software, and will place trades on your behalf, even when you are away from your computer.
So in short, all auto-trading programs use signal services. But not all signal services are auto-traders. Know what you are looking for before you start browsing, so that you can select a service which makes sense for you.
What Binary Options Signals and Bots Cannot Do For You:
- Help you “tap into an unlimited stream of binary wealth.”
- Help you generate $$$$$$ in a single hour/day/week/month/year.
- Help you trade “risk free.”
And yes, all of those bulletins are based on actual quotations from sales pages for binary options bots and signal services. I feel it is very important to say right off the top that you cannot go into this with unrealistic expectations. There is no service that can take the risk out of trading. Binary options trading is and will always be a high-risk activity. There is also no service that can guarantee you will be profitable, or that you will generate a certain amount of money within a certain time period. You are not going to become a billionaire overnight, and certainly not by sitting on your hands at the beach. Some things you simply have to do yourself.
What Binary Options Signals and Bots Can Do For You:
- Alert you to potential money-making opportunities you might otherwise have missed. Trading signals from legitimate providers can help you spot excellent trades you might have glossed over without the alerts—either because you simply missed them on your own, or because you were too busy to spot every trade opportunity.
- Help you to trade when you cannot be at your computer. If you trust the signals which a binary options robot is using to place trades, it makes sense to use those signals when you cannot trade manually. Maybe you have a day job which takes you away from your computer for nine or ten hours a day. Or perhaps a lot of the best opportunities show up in the middle of the night when you are sleeping. Auto-trading helps you to make money during these times so you do not miss out.
- Free up hours in your day. If you are tired of endlessly staring at the charts day and night (which you really should not be doing anyway), a binary options signal service can help by staring at the charts for you. It cannot replace the opportunities you would find using your own system, but it may help you to stay active and in the game when you need your time to do other things.
- Build up capital while you are learning. It makes sense to lean a bit on someone else’s knowledge while you are trying to build up venture capital for your trading endeavors. While you can start trading on a shoestring budget, you cannot realistically get very far very fast with a small account. Using signals from a reliable service can help you to build up your bankroll while you work on developing your own binary options trading strategies.
How Do These Services Work?
That depends on the services you sign up for. Some services will simply send you an SMS or email when there is a trade opportunity available. You can click, view the details, and decide to manually place a trade or not on your trading platform. These services give you more control over your trading, and are a great middle ground if you want to take advantage of trading signals without handing over that control.
Other services will automatically trade on your behalf whether you are at your computer or not. The best programs allow you to select preferences, including a stop loss, so that you do not blow your bankroll if the program has a losing streak. You may have to download a program to use some of these trading bots; others work entirely online and do not require any kind of download. It is important to know whether a program is compatible with your device and your browser before you purchase a service. You definitely do not want to make the mistake of purchasing a Windows-only program if you trade on a Mac, or a desktop- or laptop-only program if you want to go mobile.
What Does Auto-Trading Cost?
This also depends on the service you sign up for. There are several different pricing models which are common for trading bots:
- Monthly or annual fees
- Lifetime fees
- Fees per signal
A lot of services charge on a monthly basis, often a couple hundred dollars. Others may charge by the year, or you may be able to qualify for a discount if you pay for a full year upfront. Other services may charge a single flat rate for a lifetime of signals and support. These are generally quite expensive upfront, but may be a great investment over the long run. Others may charge you per signal, which can keep your costs down if you only want to place a few trades each month. Note that some services may automatically charge your card each month unless you request a discontinuation. Paid services usually include some kind of free or discounted trial so you can check out the service before you commit.
What about free binary options bots? If you are wondering why anyone would offer a service worth hundreds of dollars per month for free, there is actually a completely legitimate pricing model there. These services require you to sign up with a partner broker and deposit money there to trade. The broker pays the signal provider so you do not have to. If you trade with one of these providers, you get the advantage of free signals. Just make sure you select one which partners with legit brokers.
Cautions for Auto-Trading
While binary options signal services and auto-trading robots can enhance your trading, it is smart to observe the following precautions:
- Carefully read the terms and conditions of any service before you sign up for it.
- If you can, try a program for free before you buy it. But keep in mind that does not mean you are using the program risk-free. There is still the risk associated with the money you are putting down on your trades, and you can still lose that. Most of these programs do not work with demo accounts, so you will have to put real money on the line to find out if something is going to work for you. Set a stop-loss and know how to deactivate the auto-trader if you need to.
- Always look for past performance data. If you cannot find it on the site, ask for it directly.
- Be wary of services that promise unrealistic results.
- Never trade with a company that reports impossible past data (like 100% wins).
- If you can, try and find out how alerts are generated.
- Avoid trading with services that partner up with untrustworthy brokers (whether you sign up with those brokers or not).
- Be cautious when signing up for a service that does not have much in the way of believable user testimonials. Do look for fair, balanced, believable customer reviews. Try and find out not only about the quality of the signals, but also the quality of customer service you can expect.
- When you do start using a binary options bot, make sure you understand exactly how to use the software. What can you control? What can you not control? How do you make changes to your preferences? How do you shut it off or turn it on?
- Know in advance how to discontinue your account.
- Do not rely completely on any signal service or trading robot. While you are auto-trading, it is a very good idea to work on coming up with your own trading strategies. You may even want to combine signal trading with your own trading in real-time. You will never become a winning trader over the long term without first becoming a trader, and a trader is someone who knows how to trade.
Used with care, binary options bots and signal services can be a great tool in your trading toolbox. Used improperly or irresponsibly though, they can spell disaster for your trading account. Be careful about which services you sign up for; some are excellent while others are scams, and there is plenty of mediocrity in between. Do not mistake an auto-trading program as an effortless solution or a shortcut to riches; ultimately all traders must rely on their own ingenuity for long-term success.