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What is Binary Options Auto Trading?
Binary Options auto trading involves using robots, EAs and software to trade on your account automatically. Unlike regular trading signals, which require you to manually place the trades yourself, auto traders can place trades automatically in your account for you.
The following page provides reviews of the top auto-trading software and binary options robots.
Are Binary Auto Traders All Scams?
There is no definitive answer to this question. The rapid growth of the binary options market has certainly promoted the “make money quick” side of marketing. Many clever marketers have taken advantage of this new space by heavily promoting auto-trader robots and signals that claim to guarantee success but actually lose traders money.
The reason I don’t think there’s a definitive answer to whether auto-trading software such as BinaryAutoTrader.com or SignalPush.com are is because it depends on how you use these services as part of your strategy and to what extent you consider a win-rate of 60-70% a success.
For example, although most of these products claim to have guaranteed win-rates of 90%+ on their website, the majority of these auto-trading systems will be based on technical indicators and signals that realistically have a win-rate of 60-75%. This is no different to how professional Forex traders use technical indicators on their MT4 platform.
However, the difference is that professional traders will use these indicators as part of a holistic strategy (e.g. trend trading, scalping, channel trading etc) that takes into account market conditions, analysis and candlestick patterns.
If you’re completely relying on these signals alone to trade binary options then you’re unlikely to make much money in the long run. This is because technical indicators are highly prone to error in choppy market conditions.
Does that Mean I Will Make Money with Binary Options Auto Traders?
No. As mentioned, most of these binary auto traders rely on technical indicators with an average win-rate of 60-75%. In fact, many of the highly proclaims auto-traders actually lose the traders money, especially the ones backed by brokers or those with shorter time frames.
With that being said, some of the leading software providers such AutoBinarySignals.com actually provide you with a trend expectancy of 60-80% (as shown in the image below). Therefore, if you choose an option with an 80% expectancy and we assume that the software is only around 75% accurate then you’re actually looking at a win-rate of 0.8×0.7 = 56%. At this rate you’ll barely break-even, however you won’t necessarily lose money, therefore it’s up to you whether or not you consider this a scam.
Remember, if the software provides a “trend expectancy percentage” than you should take this into account when trading. If you start trading signals with an expectancy of less than 60% then of course you’ll lose money.
If the software provides a risk/money management feature then you should also take advantage of this to reduce your risks. Learn more about money management in our article here.
Be Wary of Software that is owned by Brokers
Some of the binary options robots are even backed by brokers now, where it is in their interest for you to lose money. Therefore, when choosing an auto-trader you need to be very careful to who actually owns and develops the software.
How do Binary Auto-Traders Make Money?
Although most binary auto trading software charges the user a fee of $50-$100 per month, you should also bear in mind that they earn a large commission by getting you to sign up to a broker. This is why many auto-trading software providers encourage you to sign up to multiple brokers and make a large initial deposit (the higher your deposit, the more that they earn).
What are the Advantages of Binary Options Auto Trading?
The main advantage of signing up to an auto-trader is that it will trade on your account automatically without you having to place traders yourself. This means you don’t miss any signal alerts, which technically means you’ll earn more money if the signals are profitable.
Auto trading software is binary options is also easy and quick for beginners to set up. There are no complicated MT4 charts, API software or indicators that you need to learn and download. In most cases you simply sign up an account and install a chrome extension or enter your broker details to complete the process.
Finally, most binary options trading products are sold using a payment provider called ClickBank.com. As a requirement, all products come with a 60-day money back guarantee. This means if you’re not satisfied with the product you bought then in many cases you can get a full refund (this doesn’t include any money deposited with a broker).
What are the Disadvantages of Auto Trading?
I’d argue there are more disadvantages than advantages to auto trading.
1. First of all, there is no way of verifying a system is successful before you sign up and pay for it. Unlike Forex, where EAs, auto-traders and signals can be verified on third-party tools such as MyFXBook.com and MQL5.com, no verification system exists in binary options.
2. Secondly, many binary options products actually lose traders money and publish false screenshots of winning trades on their website. In order to break-even with a winning payout of 85-90%, you need to trade 55%+ ITM (his doesn’t take into account the cost of the software). Therefore, you really need to see an average proven win-rate of 70%+ in order to make sure the software is worth it.
3. You lose control of trades on your account if you sign up to an auto-trading product. This is especially true if you leave it running overnight or on whilst your at work. This is why you need to be a lot more careful when choosing an auto-trading service as opposed to manual signals.
4. The interests of software providers are more aligned with brokers then with traders. Remember, even if you ask for a refund, the auto-trader owner will still make money from referral commissions if you deposited through a broker through their site. This shows that they don’t necessarily have to provide a great product to make money from traders. They make more money from brokers then the trader subscriptions themselves.
5. Most binary options software providers will be affiliated with brokers and will give you registration details to them. This means as soon as you sign up, you’ll likely receive spam emails from brokers encourage you to buy their software or open an account with a broker.
6. You’ll be culpable to any trading software that you download on your computer. Remember, none of these extensions or plugins that auto-trading websites provide are official. If something goes wrong or causes an error on your system hen you won’t be able to
So which is Better and what do I use? Binary options robot, Auto-Trading Services or Signal Providers?
Personally, I think manual signals and auto-trading services that allow you to place trades manually are the best decision. This ensures you can verify and practice with the software to see what works best, as opposed to blindly relying on the software to trade for you.
With that all said, if you’re serious about making money in binary options then you’re better off developing your own strategies and systems and learning how to trade successfully in our binary options strategies course.
If you enjoyed reading about binary options auto signals you may like to learn more about binary brokers.