Do binary options robots work?

Do binary options robots work?Binary option robots promise to make you money while you sleep. But do binary options robots work? To answer this question, we have tested every aspect of binary options robots. This article presents the result by answering these three questions:

  • Do binary options robots work?
  • How do binary options robots earn money?
  • Can I test binary options robots with a demo account?

With the answers to these questions, you will understand why and how binary options robots work, and how you can find a great robot for yourself.

Do binary options robots work and how?

The simple answer to this question is: yes, binary options robots do work. Of course, not all of them work, and some might lose you money, but there are more than enough binary options robots out there that can help you to make money. To understand this statement, let’s look at the facts behind it.

The measuring stick for robots is accuracy. A robot’s accuracy describes the percentage of trades that the robot will win.

  • If a robot’s accuracy is high enough, the robot turns a profit.
  • If a robot’s accuracy is too low, the robot loses money.

The minimum accuracy a robot has to achieve to make you money depends on your broker’s average payout.

  • With higher payouts, you will still turn a profit even if you win fewer of your trades.
  • With lower payouts, you need to win more trades to turn a profit.

Even with a below average broker, you should be able to get an average payout of at least 70 percent. If your broker offers you an average payout of below 70 percent, you should switch to a new broker. Take a look at our top list of the best brokers in the market and pick the broker you like best.

For our calculation, let’s use the worst case scenario. With an average payout of 70 percent, you would need to win 59 percent of your trades to make money. To be safe, let’s round up to 60 percent.

This means every robot that can win you 60 percent of your trades or more can make you money.

Now, if you take a look at our top list of the best robots in the market, you will find that many of these robots achieve a significantly higher accuracy. Instead of winning 60 percent of their trades, these robots win 70 percent of their trades or more, providing you with more than enough of a cushion to guarantee a profit.

All you have to do to make money with robots is choose a robot that has a high enough accuracy and a broker that has a high enough payout. Since both elements are easily available, there is really no reason why using a robot to trade binary options should not work for you. There are sites like this one that can help you find the best brokers and robots, and there are ways to test these offers with low risk or completely risk-free (more on that later), so you just have to do it.

The great advantages of automated trading systems are also the reason why all of the big banks use computer trading to make money. Fortunately, this development has made trading accessible to everyone. You no longer have to study the markets for years, all you have to do is get the right program. So why not just do it?

How do binary options robots earn money?

Binary options robots can earn money because they rely on a system called technical analysis. Technical analysis is the ideal way of finding profitable trading opportunities on short time frames such as the ones that you use with binary options.

Technical analysis is based on a simple premise: it is impossible to know why an asset’s price will rise or fall over the next few minutes or the next few hours. The economic potential of a company might determine its stock price over the next years, but it is impossible to determine how it will affect its stock price in the near future.

When we discard the classic approach of equating an asset performance with it economic outlook, however, we might still not understand why an asset’s price will rise or fall, but we can find out that it will rise or fall. This is because short-term price movements are exclusively determined by supply and demand. By analyzing past price movements, we can understand how supply and demand related to each other in the past, and how this relationship will affect the price going forward.

This might sound complicated, but robots use sophisticated computer programs to perform this task. One tool of these programs is technical indicators such as the moving average. The moving average calculates the average price of an asset over a time period, for example 30 minutes. It then repeats this process from multiple points of time in the past and draws the results in a chart. This generates a line that connects all the average prices.

This line helps robots to understand what the market is doing:

  • Depending on whether the moving average is pointing up or down, robots know whether the market is rising or falling. If the line is pointing up and the current average market price is higher than the last one, the market must be rising. If the line is pointing down and the current market price is lower than the last one, the market must be falling.
  • Depending on whether the moving average is above or below the current market price, robots know what the market did in the past. If the current market price is higher than the moving average, the market must have risen in the recent past. If the current market price is lower than the moving average, the market must have fallen in the recent past.

With this information, robots can make a trade.

  • If the market has risen in the past and is still rising, there is a good chance that the market will keep rising. Robots can make this prediction and have a good chance of winning you a trade.
  • If the market has fallen in the past and is still falling, there is a good chance that the market will keep falling. Robots can make this prediction and have a good chance of winning you a trade.

With this approach, robots can win a high percentage of their trades. Of course, they will also lose some trades, but technical analysis is a numbers game. You are not trying to win every trade; you are merely trying to win enough trades to make money. When you win around 70 percent of your trades, this is easily enough.

You have to understand, though, that this means that you should never invest all of your money in a single trade. Even with good robots, there is a 30 percent chance that you will lose that trade, and you want to avoid that at all cost.

Always invest only a small percentage of your overall account balance, and technical analysis can earn you money in the long term.

This is why you can predict whether a robot will work for you by projecting its past results into the future. As long as the robot’s strategy remains unchanged and it has made money in the past, it will keep making money. Markets might change, but the basic way in which the market works remains the same. A robot that can deal with this way will perform well in any market environment.

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Can I test binary options robots with a demo account?

Of course, many traders want to try their new robot with a demo account before they invest their hard-earned money in it. Demo accounts allow you to trade with play money instead of real money, thereby taking all of the risks out of your trading and allowing you to figure out whether a system such as a robot works without having to risk a single Cent.

Whether you can test a robot with a demo account depends on two things:

  1. Your robot, and
  2. Your broker.

For the system to work, both your robot and your broker have to allow the robot to connect to the demo account.

Unfortunately, we are unable to make a general statement about whether this system will work for you. In some cases, it will; in many, it will not. If you can connect your robot with your demo account – great. You can skip to the conclusion of this article. If you are unable to connect your robot to your demo account, you can still find ways to test your robot with limited risk. Let’s look at these ways individually.

  1. You can test your robot through paper trading. Most robots publish a list of their past trades. Paper trading means to analyze this list and see how much trades you would have won with this robot and whether you would have made money if you would have combined it with your broker. Many robots already calculate their winning percentage for every month, making it easy for you to multiply this value with your broker’s average payout and to understand whether you would earn money with this robot.
  2. You can test your robot with the smallest investment possible. Many brokers allow you to trade from $1 per trade. With such a low minimum investment requirement, you can test a robot almost risk-free. Even in the worst-case scenario, you would only lose $10 or so before you understand that this robot is bad and quit the test. If you are unable to find a robot that works with a broker, perform this type of test. Most robots work with multiple brokers, and you should be able to find a broker that allows trades for $1 and can connect to your robot.
  3. You can test your robot under real-life trading conditions. You can also test your robot with a full investment right from the start. Now granted, this is the riskiest way of testing because you will be investing the most money, but if you do your research, you can greatly limit your risk. Risk-takers and traders that are itching to get started might prefer this option.

If you want, you can also combine these testing options. You can start by testing your robot with paper trading, and if this test works out, you can advance to investing the minimum requirement. If that still turns you a profit, you can go all-in and invest as your money management dictates it.

Conclusion

Binary options robots do work. They are based on a system called technical analysis that enables traders to find profitable trading opportunities in short-term environments, and that makes trading repeatable and predictable.

To find a working broker, find a broker that has worked in the past, and you can be sure that it will work in the future, too. Just make sure to analyze a long enough period of time of this robot’s performance, because their might some short-term variations in the robot’s performance, but over the period of a year or longer, all robots maintain a roughly consistent accuracy.

If you want to test your robot before you use it in full effect, analyze the robot’s past signals and calculate how much money you would have made with it. If you would have been able to turn a profit, advance to trade the robot with the minimal investment amount your broker allows, which is often as low as $1. If the robot still trades profitably, you can comfortably use it with real money.

This is the blueprint you have to follow. Enjoy and have fun!

Do binary options robots work?
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Do binary options robots work?
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