Updated: April 29, 2017
If you’re even remotely interested in investing, you must have heard about binary options by now. While they’re still a relatively new form of investing, they’ve generated a lot of interest in this very short period of time.
Although that doesn’t necessarily mean you’re trading binary options at the moment, you’re probably at least a little curious about whether or not the hype surrounding binaries is even remotely true or if you should stick to your current method of investing.
Binary Options Are a Legitimate Form of Trading
Let’s put one rumor to rest right away by saying that, yes, trading binaries is a legitimate way to make money. Although the industry is definitely surrounded by a lot of hype, that doesn’t mean that there’s nothing behind it.
Countless people all over the world are trading binary options every single day with more investors on the way. It’s definitely not a scam.
That being said, it’s also not some guarantee of profits either. Too many people seem to think that because the margins can be so huge and you can make so many trades every single day, they’ll have an easy time quickly becoming a millionaire.
Claims like that are definitely hype and you should avoid anyone who tries to convince you of their truth.
You Can Make Money in Any Market
Similarly, you can also believe that trading binaries makes it possible to profit in any market. In fact, a lot of binary options traders prefer volatile ones.
Whereas more traditional traders see volatility and get scared, those who are trading binary options often get excited
Again, though, this doesn’t mean you don’t need to practice common sense. It will take time and patience to understand which options pay out in which economic climates.
Until you have this type of understanding, expect that you might lose money in any market too.
Your Risk Is Always Fixed
The good thing about trading binary options is that your risks are always fixed up front. That is 100% true, which should help explain why so many people prefer binary options to any other form of trading and also why so many of them have seen such huge profits early on. You simply aren’t taking the types of losses you would with, say, stocks.
It’s also worth mentioning that contracts can last as little as five minutes too. Another advantage for beginners, then, is that they will know the outcome of the risks they take quickly. Again, with something like stocks or commodities, you could be waiting years before you get your money back””if you get it back””and can make more trades.
Emotion Can Ruin You
As with any type of trading, you must keep your emotions in check. You can’t afford to start trading irrationally because you had a couple of tough losses and want to make up for them. Many a trader has lost their shirt this way.
However, it’s probably even more important that you control your emotions when trading binary options. The ability to trade quickly and manage your risk so easily means that many traders quickly become adrenaline-junkies. They don’t stop and learn from each trade because they’re chasing the thrill of trading again and again and again.
Do not let this happen to you.
The world of trading binary options could easily help you see amazing profits. All over the world, people are chasing fortunes full time. Still, while much of the frenzy around this type of trading is justified, you need to be smart about your assessment and approach.
This article is written by Gene Geneta, a financial analyst from OneTwoTrade