Binary options are relatively new financial instruments, and retail trading in binary options contracts did not start until 2008. This coincided with the era of the advent of the smartphone, which brought a new dimension of trading into the homes of participants. The late 2000s also saw innovations in the development of web browser software. The web browsers were much more advanced than the early prototypes of the mid 90s, when online trading was deregulated to allow for private participation.
By the mid-2000s, the forex market was already undergoing a revolution in terms of development of software, tools and platforms. The first expert advisors which could allow for automated trading were already in the market at this time. So when binary options appeared in the marketplace, this form of investing already had a lot of catching up to do. It was not until 2011 that the first attempts at creating automated binary options software were made. Binary options robots have undergone tremendous changes since those early years and as we head into the last four years of the 2010s decade, there is every certainty that we will witness more changes.
Here is a description of the changes that binary options software have undergone through the years.
By this time, robots were already commonplace in the spot forex market, but there were limitations within the binary options market that needed to be overcome before the first binary options robots could be produced. One of the limitations was that binary options platforms were mostly web-based. As such, any robots for the binary options market had to have a way to connect from the web-based platforms to the trading servers for execution.
The first attempts at making binary options robots made use of an innovation in web browser technology. Google had just launched its web browser, Chrome, and this came with a new technology, which was the ability to attach software add-ons known as Extensions. These extensions could then be called upon to produce functions on the websites that were open within the web browsers. This meant that binary options robots could be coded in the form of web browser extensions, and they could be programmed to execute trades on the web-based platforms of binary options brokers. Other web browsers such as Mozilla FireFox and Opera followed suit by developing their own Extension browser technology. The age of the binary options robot was born.
Binary options robots in the form of web-based browsers were cool, but they had limitations. For instance, some brokers did not use the turnkey software from SpotOption, Tradologic and Tech Financials, the major trading software providers in the binary options market. Therefore attempts to use extensions on the software of brokers using proprietary platforms were not very successful. Furthermore, other software providers and developers saw a massive market opportunity and began to develop their own binary options robot solutions. Many of these new software did not require browser extensions technology to work. This period signalled the entrance of a new generation of binary options robots. Some of the new technology that came on stream were as follows:
- The MT4 bridge: this was a breakthrough in the market and gave the massive number of traders who had operated the MT4 in the forex market the opportunity to get their regular robots to implement signals from the MT4 platform to their binary options platforms.
- MT4 binaries: Some forex brokers started to offer binary options on their platforms, thus providing a system where binary options robots can be constructed using the platform’s programming language. This keeps the entire system in-house. Some forex brokers using the MT4 have already begun to implement such a solution.
Further advancements in technology have taken place. Some companies, willing to provide trading services for numerous clients, have created a system where manual trades performed by experts in a back end, can be copied and transmitted directly to trader’s accounts on the front-end using a software which functions as the robot. The advantage of this system is that traders using the system get the best of human input and automated input.
New software such as those run by BinaryRobot365 are also allowing traders to define certain parameters for their trades for the binary options robots to run with. For instance, traders can now set a stop loss, trade size, risk appetite, etc which in turn, define how the binary options robot sets trades. Therefore, frequency of trades, aggressiveness of trading, investment amounts and risk exposure, can be defined for the robot to follow. This allows traders to continue to retain a measure of control over their accounts, and still be able to do other things while the robot performs trades in an automated fashion.
Some companies have also started to develop downloadable versions of binary options platforms. Therefore, we can expect to see robots being coded to trade binary options in much the same way as we see robots being coded to trade the MT4 and MT5 forex platforms. This will also open the door for the development of software that can allow traders to automatically develop their own robots without having to use programmers to do so. This technology, already provided by companies like Molanis in the forex market, look set to take off in the binary options market as well.
It is very clear that with the rapid evolutionary changes that have occurred with binary options robots in the last five to six years, the next few years will see more innovation and more functional binary options robots. Time will unveil to the markets what is presently in the minds of developers who are working tirelessly to deliver more value to traders.