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October 12, 2016

Pros And Cons Of Manual And Automated Binary Trading

With the increasing popularity of binary trading, the number of various trading tools has increased. Therefore, we now have many trading signals, robots and other automated trading systems. All of these serve to help traders be more successful and they can also save a lot of time.

Differences between manual and automated trading

Binary trading is placed on online platforms where the traders invest money and follow the prices of the assets they trade. At first, it was only done manually. The traders were supposed to deposit the money and manually set all the trading parameters. After this, they were supposed to follow the fluctuations in the market and maybe change the parameters if the platform allows it.

With the development of this trading method, many facilitating tools have appeared. Nowadays it is possible to use some of the trading robots and “autopilots”, such as Zero Loss Formula, for example. These software solutions allow traders to enter trading parameters and the software performs the trading for them.

Some robots even have the option of setting the parameters instead of the traders. Both manual and automated trading have their advantages and drawbacks, and to help you decide which method to use, we will present you with both sides of both methods.

Manual binary trading

Manual binary trading has several great advantages. First, you are in complete control of the process and you have the responsibility for wins and losses. Also, you determine the number of trades you execute, and you can end the trade earlier or change the prediction if you feel there is the need for it.

On the other hand, this type of trading can be very time-consuming, since you are required to spend time in front of the computer and follow the changes on the market and the fluctuations in prices. This is especially stressful and requires a lot of time if you trade stocks of large companies, such as those in oil and energy industry.

Automated binary trading

Automated trading is a relatively new concept and it is still being developed and perfected.

One of its biggest advantages is that it saves traders a lot of time. They can set the trading parameters and let the binary robot do all the work. Some of these robots have the control of the losses, so you cannot lose more money than you are willing.

Another advantage is that automated trading removes emotions from the process. They can often be harmful for the outcome of the trade, and sometimes it really is difficult to control them. Check out http://cybermentors.org.uk/.

On the minus side, not all binary robots are accurate and reliable. Since this concept is still relatively new, it is impossible to predict the fluctuations in price in a perfectly accurate manner.

Therefore, if you choose the best binary robot there is, it is still not likely to accurately predict more than 75-80 percent of your trades. However, since this concept is yet to be developed and perfected, in the future we can probably expect highly accurate and successful automated trading robots.

Binary Options Trading Strategies

Trading binary options is a popular and interesting trading concept. There are millions of users all over the world, and many of them are quite successful in it. Even though the concept is quite simple, it is important to be informed and educated about market conditions and market analysis. Another key to successful trading is managing your finances, and in this article we will deal with some money management strategies.

Why is it important to apply a money management strategy?

Money management is important for several reasons. First, it helps you control the expenses and reduce the amount of money you lose. Second, it keeps you disciplined. Applying a certain money management strategy helps you stay within the frames you determined for yourself. And third, a proper strategy can also increase your earnings. Keep in mind that it is more difficult to apply a certain strategy if you use a binary robot or a money system like Millionaire Blueprint or something similar. However, with manual trading, these strategies are more than useful.

The Straddle

This is the most used money management strategy, especially among novice binary traders. It involves choosing both of the two options, so you can minimize the loss of money. With this strategy, you invest a certain amount of money to call an option and determine one time frame, but also invest the same amount of money to put the option and determine different time frame. This tactics is especially useful in the markets with high fluctuations, such as oil, gas and energy market.

Doubling Up

This strategy is usually used by more experienced traders. We can say this is the opposite of the previous strategy. It also involves trading the same asset within two time frames – but you should choose the same option both times. Therefore, instead of calling and put an option simultaneously, you will either call it or put it in both trades. In order to do this, you should know the market well enough and be able to predict the fluctuation in prices with high precision.

Knock-on Effect

This is also a strategy chosen mainly by experienced and highly skilled traders. It involves predicting that the change of price of one asset will change the price of the other. For example, if a price of oil rises, the price of some other commodities is likely to rise as well, such as oil or natural gas. 

With such presupposition, the traders can trade binary options of all related assets. Just like the previous strategy, this one also requires knowing the market well enough to predict the changes, as well as cause and effect of changes.

Custom strategies

The previous strategies are the most common and the most popular one in the world of binary trading. Naturally, if none of them works for you, you are encouraged to create a strategy of your own. You can base it on some of the known principles and change the details so they work for you.

When you gain enough skill and experience, you can even invent your own trading strategy from scratch. One way or the other, using a money management strategy will be beneficial for you binary trading.
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