Binary options trading has become popular all over the world and there are more than 2.5 million traders actively involved in this industry worldwide. The key to success is to do your homework on binary options brokers and select a reliable one to ensure you get a fair playing ground. If you are new to binary options trading and wish to know the pros and cons of this type of financial trading, we give you valid reasons why you should try your hand in this industry and make good money while having fun at the same time.
Easy to Learn and Use
Compared to forex or stock trading, binary options trading is easier to understand and participate in. You simply need to predict the movement of a selected asset. For instance, you need to decide whether the stock value of Microsoft will rise or fall in the chosen time period. If you are able to make an informed decision, then you are ready for binary trading.
In comparison, forex and stock trading are more complicated. There, you need to factor in variables like project profit margins, profit rates, and more. In addition, you also need to utilize mathematical formulas to avoid random guesswork and to make educated decisions.
You Can Become Rich Quick
Trading with binary options brokers is one of the fastest online methods to become rich. As mentioned above, you simply need to predict whether the asset value will rise or fall in the chosen time period to make good money. In addition, market studies show that 26% of binary trading accounts make a profit.
The best part is you will emerge a winner even if there is a only a slight rise or fall in the stock value. For example, if you decide that Microsoft’s stock would go up in a few days, and if the rate rises from the current $500 to just $500.01 in the chosen time period, you will emerge a winner and get the full payout.
The reason why binary trading is lucrative is because most binary options brokers offer high payout rates. If a broker’s payout rate is 90% and you invest $100, then if your prediction is right, you will earn $190 from the deal. In comparison, stock trading is slow and you need to wait for the stock value to grow gradually to make money.
You Need Not Be a Financial Guru
One of the advantages of binary trading is you don’t need to be a financial expert to participate. You simply need to have common sense and some general knowledge to make accurate predictions. For instance, if a company is planning to release a new product in the next few days, you can accurately forecast that its asset value will rise after the launch. You can use this knowledge to make money. In comparison, you need expert financial and economics knowledge to trade profitably in forex and stocks.
The Trading is Flexible
With binary trading, you can control your risks, limits, investment sums, and potential profits. Thus, from the beginning you will know how much you can earn or lose. For instance, if you decide to invest $50 in deciding Microsoft stock will rise, you can go ahead and choose the expiration time and the payout rate. This ensures there will be no surprises for you as is the case with stock trading.
Watch Out for Interesting Innovations
Binary options brokers are making binary trading more interesting by rolling out exciting tools and features. Binary trading is flexible and top brokers make use of this by adding interesting features such as giving traders the option to close a contract before expiration time, doubling their investment money while trade is going on, and more. These exciting innovations are adding to the popularity of binary trading. In contrast, stock trading remains staid and boring.
It Offers An Exciting Experience
Binary trading offers great excitement. You can decide the investment, control your winnings and losses, and watch the expiration period counter eagerly to learn whether you will make money. In contrast, forex and stock trading are less dynamic. So, binary trading is a more exciting and potentially more lucrative alternative to normal forex and stock trading.
Anytime, Anywhere Trading
Online binary options trading platforms can be accessed from anywhere, anytime, using any internet-ready computer or mobile device. This means investors from any country that allows this type of trading can participate and have fun.
Binary Trading is Gaining Official Acceptance
As binary trading is becoming popular all over the world, many countries have decided to step in and regulate and legalize it. This boosts the credibility of the industry which in turn serves to attract more investors. Currently, a lot of countries including the US, UK, and Cyprus have taken the initiative and have become leaders in officially regulating this type of trading. Australia, South Africa, and Japan are following suit. Slowly, more nations will join the bandwagon and make binary trading a legitimate investment platform for traders across the globe.
You Can Go Social
Binary traders can share their experiences on social networks and learn from each other. They can discuss the latest strategies and trends on social platforms that are like Facebook. This social aspect is expected to give a big boost to the popularity of binary investing. Binary expiration periods are short which allows traders to continuously exchange ideas and experiences. You cannot get this benefit with forex and stock trading as they are too slow for the social aspect.
It Is Better Than Gambling
Binary trading is a serious and professional alternative to uninformed gambling. Many people are trying gambling to make quick money. However, since gambling is based on luck your chances of making money without risks are quite slim. In contrast, with binary trading you can beat the system and make money with preparation and effort. All you need to do is track the latest market news and trends, and then make informed predictions on the likely movement of assets to become a winner.
You Can Control Your Losses
A comforting aspect of binary trading is you can control your losing amount. For example, if you decide to invest just $10, you will only lose that amount and not a penny more if things go wrong. On the other hand, in stock trading if your stock value tanks dramatically, you might end up losing everything. Therefore, binary trading is preferable to stock trading when it comes to having control over potential losses.
Convenient Customization Options
Traders can easily customize their trading options for their individual requirements. Apart from simple rise or fall options with different expiration times, you can also try one touch and boundary trading. With the one touch option, you become a winner if the asset reaches a decided price at any junction during the trade’s life. In boundary trade, you make profits if the price finishes in the predicted price range at expiration time.
Issues To be Wary About
Along with the positive points and advantages, it’s only fair that we warn you about the potential downsides of binary trading. These include:
- Regulation: Binary trading is a relatively new industry and therefore not strictly regulated. As a result, there are many fly-by-night operators who are looking to cash in on investor greed and flee with their hard-earned money. Therefore, be diligent and do your homework about the reliability of a broker before you decide to trust them. There are many websites that provide an updated list of blacklisted brokers that you can consult.
- Big Losses: In binary trading, you win or lose everything. If your prediction goes wrong, you will lose 100% of the invested money. Therefore, be careful and invest well within your budget. Start with small amounts and learn the tricks of the trade first. Once you make some money and become more confident about the techniques and strategies involved, then you can raise the stakes.
- Short-Term Trades: Binary trading involves short-term predictions. Therefore, it is akin to gambling as more accurate predictions are possible only over the long term. Therefore, binary trading may not be a good vehicle for traders who wish to avoid risks.
A lot of people predicted doom for binary options trading because of the news about scams and shady operators as well as the risk of unregulated trading. However, the truth is binary trading is becoming more popular by the day for the numerous advantages and benefits we have detailed in this article. In addition, governments are stepping in to ensure the industry is regulated properly which is attracting more traders. Give binary trading a try and start with a small amount to see if you enjoy the trading atmosphere and experience.