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In the past, to make trades in any financial market, you have to do it yourself. You have to carefully conduct some thorough analysis. This analysis should typically include fundamental analysis – which involves checking market news and events around the world, to see how they will affect the prices of financial assets.
Beyond that, you have to look at a set of charts and indicators, searching for price patterns that may suggest the future directions of prices of the financial instruments. This is known as technical analysis. After then, you can now make your trades.
However, things are not always as easy as they sound. Before you can be equipped enough to conduct the above analysis, you must have undergone a considerably thorough learning process. This will require you to commit some length of time to consistent practice. That was in the past.
Today, with the concept of robotic trading, you can trade without you being physically involved.
What is Robotic Trading?
Robotic trading can also be referred to as automated trading. It involves the use of computer software – called trading robots or trading algorithms or “robo advisor” or expert advisor (EA) – to make analysis and enter trades without any physical involvement. What you need to do as a trader is set up the software and link to your trading account, and it will automatically conduct the analysis and execute the trades for you, without you being involved.
Trading robots exist for all markets, and there are now a lot of robots made specifically for online trading.
Benefits and Risks of Using Online Trading Robots
While there are many benefits to using trading robots, there are also significant downsides. Outlined below are the advantages and disadvantages of using robots to trade binary options.
1. Can Trade All Through the Day
Perhaps one of the most significant advantages robotic traders have over human traders is that they can function all through the day 24/7 without stopping.
Human traders are usually confined to trading within specific periods of the day, and they still have to combine trading with other commitments such as family, work, and leisure.
A binary trading robot can work continuously with no need for breaks, which means they will be watching and acting on the market at all times. With this, you do not get to miss important market opportunities.
2. Not Controlled by Emotions
One of the most significant causes of losses for binary options traders is that they are influenced by emotions. Because their hard-earned money is involved, the conflicting emotions of greed, fear, and hope can cloud the reasoning of human traders, causing them to make wrong judgments.
However, trading robots operate on a set of pre-determined algorithms, and they will stick to the rules no matter what.
3. Can Operate More Effectively
Another feature that differentiates robotic traders from human traders is that they are much more effective.
A binary trading robot can scan several markets, find opportunities based on defined conditions, and carry out trades according to its rules, all in a matter of seconds. A human trader doing this manually is likely to take much longer and may miss opportunities, or waste time making decisions or entering an order.
4. Can Be Used by Anyone
One of the biggest fears of people just coming into trading is that it takes a long time for anyone to become profitable. This is after they might have recorded several recurring losses, and blown their trading accounts.
But that stress of going through a rigorous learning process is removed once you put software in place to do the job for you.
1. Not Good at Fundamental Analysis
Binary robots are good at conducting technical analysis, which involves reading historical market statistics and price charts to predict what might happen in the future. But they are not so helpful when it comes to analysing the news and making appropriate judgements.
This a human trader can do reasonably quickly.
2. Mostly Scalping Method
Most binary robots make use of short-term trading called scalping. This will not be suitable for traders who prefer holding their trades for more extended periods.
By far, one of the most significant disadvantages is that a good number of robots in the market are scams. These losses have led to traders losing substantial sums of capital.
As such, traders have to be careful when selecting a trading robot.
4. Power and Internet
For most trading robots to work, you need your computer system to be always on, with quality internet speed. Poor internet speed might lead to the robots making wrong decisions which may cause the trader losing significant capital.
There is, however, a solution – you can use trading VPS, although they can be quite expensive.
OlympTrade Trading Robot is not possible
Olymp Trade does not allow the use of trading robots on its trading platforms. This is mostly due to the high percentage of scams that most robots are. If you are using a robot for Olymp Trade it will be 99% a fraud to your trading account.
Tips on Using Forex Robot EAs
No matter the binary robot provider you choose to go with, we advise that you still observe some tips in making use of a forex robot. Those tips include:
1. Back-test the Robot
Before you start applying the robot, you must go back in time to check how well the robot has performed in the past. This is known as backtesting. With this, you can see how the trading software faired under different market conditions in the past.
2. Use a Demo Account
Similar to the above. However, this time you are actually applying the robotic software to a real trading account, without risking your capital.
After subscribing to your binary robot provider of choice, don’t apply the software to your live trading account right away. Use a demo account first, and sustain this for some period, say a month. You will understand how it works, the strategies upon which it was built, and much more, without exposing yourself to any risk whatsoever.
3. Be Patient
Trading robots have different strategies programmed into them. As such, some perform extraordinarily well under some market conditions and fail terribly under others. You have to patiently see the software through different market conditions by testing it for a considerable amount of time before making any conclusions.
Similarly, once you’ve subscribed to one robot stick to it. Many traders make use of multiple robotic traders. That is counter-productive and may lead to massive losses.
Read our other articles about Olymp Trade:
- Olymp Trade Mobile App Test
- Olymp Trade Forex Trading
- Olymp Trade Africa
- Olymp Trade India
- Olymp Trade Bonus
- Olymp Trade Trading Platform Tutorial
- Olymp Trade Indonesia
- Olymp Trade Trading Strategy
- Olymp Trade Tips and Tricks
- Olymp Trade Withdrawal
- Olymp Trade Deposit
- Olymp Trade Review
- Olymp Trade Demo Account