Trading In Binary Options – Gambling Or Work?
The rapid popularization of binary options and the obsessive advertising of brokerage companies make uneducated folks think that option trading has much common with casinos and gambling. In addition, many brokers openly position this financial instrument this way – there’s nothing easier than to guess one of the two directions of quotations get a fantastic profit in a minute. In this article, we will analyze why some experts call binary options a serious financial instrument, while others label these assets as pure gambling, and who is actually right.
So, a binary option is an exchange contract, the profit on which is determined by the correctly formed forecast for the further movement of its quotations within a certain time interval (from 1 minute to a year). Due to a simple algorithm many people compare trading with gambling, where betting on a certain result is also made. However, the problem is not even in the algorithm of this financial instrument, but in how it’s positioned by some optional brokers and how traders use it.
1. Much depends on the broker
Many brokerage companies are aimed at gamblers. After unsuccessful sports betting or losing in the casino, these people want to get the adrenalin going in trying something new. Such clients really consider trading to be another form of betting. As a result, a naive newcomer looking for easy money starts trading and after a few days he or she loses the whole trading deposit, which is the main goal of such companies. It’s worth noting that the trading terminals of these brokers are very primitive and it’s impossible to earn on them – a trader can rely only on his luck as in gambling, since they don’t come with a proper set of tools for market analysis.
Undoubtedly, in binary options, as in gambling, a trader can be lucky enough, so even on such a primitive trading platform a trader can make a profit without even knowing the basics of technical analysis. Well, first, it happens rarely, and secondly – luck has its own limit. For real earnings a trader should use a high-tech trading terminal where he can professionally work with binary options. What does the professional trading platform look like? It has a large-scale optional chart of quotes (a live graph for an example) and a variety of technical tools for accurate market forecasting. Exactly such trading platforms are used by successful investors.
For example, that’s a platform of the company Binomo:
2. It’s all about the trader
The problem of gamblers is their inability to stop on time. So when luck ends, all newly-won thousands of dollars are returned to the casino owner or the broker. However, one should realize that there’s a significant difference between an ordinary gambler and an option trader. Playing roulette or betting on sports, a player can only rely on his luck or the probability that, for example, the football team that won twice in a row will most likely win in the third game. A trader has more chances to close the deal with profit because he can use trading strategies with binary options, built around regularities that cyclically recur on the financial market.
Of course, many newcomers still lose their deposits – some of them lose due to bad luck, others are failed by their strategies, while some people lose only due to their strong desire to get money quickly. What should you do not to lose all your money? First, never trade blindly, you should stick with your trading strategy. Secondly, you need to choose only proven strategies, neglecting strategies with a so-called «100% guarantee». Thirdly, don’t try to instantly triple your initial capital. Set yourself to trade slowly – you need time to make a good deal. You need to make sure you have all the necessary conditions to enter the market with your strategy. For example, if you cooperate with a reliable broker, on its website you will certainly find a selection of proven strategies.
In fact, it’s up to the trader to make binary options either profitable or losing. Those who want to get a casino thrill will get gambling. Just two buttons, a crazy profitability, a theoretical potential of earning even a million – everything a gambler needs for happiness. At the same time, anyone who wants to earn money and turn trading into his source of income, gets fantastic opportunities. To do this, you only need to take this tool seriously, undergo training, have some practice, constantly improve your skills and forget about fast money.