Is binary options trading a gamble?
Is Binary Options Trading a Gamble?
Recently, binary options trading has been enjoying its popularity because of its promise of easy money. Well, this is what some people thought it is: an all-or-nothing gamble. But is it? Let’s make a discussion about it.
What is binary options trading?
It is when you select an asset to trade, predict its value, if it is going to rise or fall at a given expiry time. If you bet your $100 and your assumption is right, you get your money back and you win 70% to 90% of your investment. If you are wrong, you lose your $100. But it is not as easy as how you see it. The underlying assets are too many, depending on the trading platform that you choose: commodities, currencies, indices, and others. To maximize your profitability, it is important that you learn how to read charts, perform technical analysis, and keep updated with economic data releases as these can highly influence the movement of the prices of the assets.
What are the elements that make binary options striking?
Primarily, the fixed risk and reward makes new traders feel comfortable in trading binary options. Regardless if you are in-the-money or out-of-the-money, you already know how much you will earn or loss. Percentage of payout is already specified thus you have an idea how much you will profit. The risk is the amount of money you opt to trade thus you can choose how much you are capable of losing. Likewise, binary options trading is easy to understand unlike the traditional trading and that contracts have shorter durations that you can already determine if you win or loss – then trade again.
Is it a safe and a profitable investment?
Risk exists in any kind of investment. For this reason, you have to make sure that you only deal with the best binary options brokers that will even help you understand what is binary options trading and how to trade binary options successfully through their educational tools and customer support (or even personal account manager) that are willing to assist you. Be sure to choose a reputable broker that are licensed and regulated by certain agencies.
Is it a profitable investment? Yes, but only if you will give your heart and mind into binary options trading because it requires your time to study the basics and to be able to learn technical information relevant to trading.
The question is: Is it a gamble? If you trade without understanding anything, you are up for a gamble. But if you make an effort to know all the fundamentals and study the techniques, then you treat it as a real investment.