Everyone trades for different reasons, yet everyone also has the same end goal: to make money. Still, looking at your reasoning behind doing so will help you to learn more about your particular style of trading and give yourself an edge over the markets once you do so. It might be only a small advantage, but it’s still something that you can use to start making more money.
Take advantage of large payouts while trading binary options. Understand the risks of trading.
To help get you started, here are a list of five popular reasons why people trade binary options in particular over other trading instruments. See if any of these describe you, and think if there are any additional reasons why you trade. You just might find out that binary options can meet your goals more effectively than any other trading method can.
1.) Reducing risk. Binaries tend to be quick, and therefore, you don’t want to front as much money on a single trade as you would in the stock market or even in the Forex market. It’s kind of a built in mechanism to help you lower your risk. Yes, they are an all or nothing trade,but you risk so much less at once that this is more to your advantage than anything else. If you don’t want to risk thousands of dollars at once while you are learning the ropes, binaries are a great place to start since you can risk $10 to $25 per trade at first. If you end up deciding that this isn’t for you, or you don’t have a huge amount of cash to set aside for trading, your risk is minimal and you can stop at any time without extra losses.
2.) Simple. Binary options are really easy to understand. You either hit your price goal or you don’t. If you do, you get a full profit. If you don’t, you lose what you risked. There’s no middle ground, no extra fees or commissions, none of that. Everything is upfront and known before you actually execute the trade. All that you need to do is predict whether the price of an asset will go up or down with accuracy.
3.) High profit rate. When you start to get the hang of trading with binaries, you will see that there is a ton of potential for increasing your profit rate. A great money manager on Wall Street can make 10 percent profits in a year. An average binary option trade will return 78 percent. The math is pretty clear cut here. With a high enough success rate in binaries, you can destroy a professional on Wall Street’s numbers.
4.) Lower costs. This was alluded to above, but binary options do not have any fees or commissions attached to them. There are no spreads to worry about, either. The broker still needs to make money, though, and they do this off of your losing trades and the gap in price between losing trades and profitable trades. This is why the loss rate needs to be higher than the profit rate. But, in theory, this would never affect you if you were never wrong in your predictions! Of course, this won’t happen, but the fact is, binary options give you a ton of potential in reducing your trading costs, and it’s all based upon whether you are going to be successful or not.
5.) Ease of use. When it comes to trading software, most binary brokers use a web based interface. These require no downloads to your computer, just an internet connection. You may want to download a trading app to your mobile device if you want to trade on your phone later on, but it’s not necessary. Regardless of how you decide to trade, binary brokers tend to have extremely simplistic platforms
. Part of this is the nature of binaries in general, and part of it is the fact that these brokers know that confusing interfaces are just going to drive clients away. Even though they make money off of you when you are incorrect, having successful clients is good business and attracts more clientele. It only makes sense that brokers will ensure that their product is as easy to use and attractive as possible as this keeps their business going well into the future. Furthermore, the best brokers are always trying to improve their products, too. New mobile apps and improved connections are just a couple ways in which this happens on an ongoing basis.