Can you make money with binary options?
Posted: Jan 13, 2021
New industries are born day by day thanks to the internet and the great global community it has created. One of these industries is binary options trading. Some might call it the "new Forex market", which may be partly true.
Online binary options trading is an exciting new market that provides an alternative to a person who is looking for additional income but does not have the time or flexibility to start studying the currency market.
Trading binary options is as simple as you can imagine and there are significant amounts of money at stake. If you create an account with an average binary broker, you will most likely find a very simple and friendly web environment based on the most "complex" symbols being an up arrow and a down arrow.
Binary Options trading is about just assuming (or predicting, if you want to be politically correct) if an asset (currencies or commodities) is rising or falling, or even more accurate for my taste if the asset's price will be above or below a specific price, at a certain time in the future, which can be found from 1 minute to several months from now. In theory, you don't need to know much about finance to participate in the Binary Options system. In practice, the more you know, the more effective your predictions will be.
Whether or not you are a financial expert, you have a less than 50% chance of "winning" and receiving a profit. This is because, although a random probability is 50/50, winning trades usually pay less than the amount lost in a losing trade, which means that, in practice, a binary options trader needs to win more than approximately 55% to 60% of your trades just to stay in balance. This is the reason why it is much more difficult to generate profit from binary options trading compared to spot trading on Forex, commodities, CFD’s, etc. The good thing about Binary Options is that you know exactly how much you are going to win or lose on each trade and that this cannot be changed.
If you take it easy and trade responsibly, that is, not risking money that you cannot afford to lose, it is very likely that very soon you will become one of the thousands of followers of Binary Options in the world.
Although at the end of the day you are trading currencies or commodities, the differences between Forex and Binary Options trading are huge. The most obvious difference is complexity versus simplicity.
One thing most people would agree with is that the average Forex platform is not very intuitive and with all the graphics built into the platform, the newbie to the forex market will be overwhelmed almost immediately. This is not the case with binary trading. The average binary platform is something that can be traded by an average 11-year-old kid. However, there should be no doubt whatsoever that it is extremely difficult to generate any consistent profit from binary options trading.
When we consider that one of the most important proverbs for profitable trading is "let the winners run", we can see why binary options trading is a game for losers. The only way that it can really benefit a trader is if a trader has a very strong belief that a certain level will not only hold but will hold so strongly that there is a greater than 60% probability that, in X time, the price will be on one side of that level. Such opportunities are few and far between and can only be exploited by true experts. Therefore, for retail traders who do not have access to the bank order flow, binary options trading is an almost impossible way to make money.
What are the binary options?
Binary options are an investment system that consists of betting either on the rise or fall of the price of a financial asset that is quoted on the stock markets. As the name suggests, there are only two possible outcomes when it comes to profitability: if your forecast is correct, you will win, otherwise, you will lose your investment. For more information, this article could be of great help.
How do you perform binary trades?
The first thing, first of all, is to choose the asset or assets of your preference, predict which direction they will take and set an expiration time (this depends on the broker in which you are performing this operation). It is advisable to opt for one of the many binary options strategies available. You then have to choose how much money you want to risk.
The next thing to do is to find a suitable broker or trading platform, which is well established from a legal point of view in your country. When carrying out the operation, you must wait for the expiration date to either collect the profits or losses depending on how the result has been.
What is the best binary options platform?
Each trader must choose which is the most suitable platform to carry out this type of operation based on their own preferences. To help you make a decision, Daily Forex recommends reviewing this list of brokers and their respective reviews.
Teacher-turned online blogger, Shirley is a full-time backyard homesteader based in Virginia. When she doesn't have her face buried in a book or striding in her garden, she's busy blogging about simple life hacks of the daily life.