With binary options, very high profits can be made in a short period of time and without experience in the financial market. At least the brokers promise. Critics, on the other hand, caution users against the dangers, as binary options are highly speculative and carry a much higher risk of loss than other forms of investment. So, shouldn’t you invest in binary options? Or can be traded profitably and with moderate risk with a compatible binary options training with this financial product, as it is often offered for free online. With the following article we aim to eliminate the ambiguity and show which requirements the trader for binary options should fully meet and how high risk can be handled appropriately.
Many customers have already suffered high losses
The special structure of binary options especially attracts beginners, who have little or no experience in trading financial products. Here it often happens that the risks go wrong and investors quickly lose their entire trading capital. Therefore, the internet is full of binary options criticism. Not only does this come from damaged customers, but Consumer Center now issues a binary options warning. Some former traders claim that binary options are fake and therefore you cannot win any money with it, this is also not true. Although there are always fraudsters among online brokers, binary options trading is possible even in dire circumstances. Investors just need to be aware of the highly speculative nature of binary options. While losses are unlikely in more conservative forms of investing with the right strategies and total losses almost never occur, both happen everyday when trading binary options. Therefore, really only money should be invested here if it can be considered a kind of “game use”, which grades can be lost with even less probability.
Why binary options are so popular with newbies
Binary options can lead to high losses, is now known. Not only are consumer advocates trying to warn binary users about the dangers of trading with their critics, but there are also many customers who themselves have encountered loss reports on the Internet.
Still, new entrants keep registering with many brokers and in some cases pay huge amounts for them. The reason binary options are so popular with beginners is because of their simple structure: trading can be learned quickly and not many decisions have to be made to place a trade. Thus, binary options are an ideal opportunity for many users to participate in the financial market to deal with the functioning of the trading platform for the day or week. On the other hand, most professional traders prefer trading CFDs or more complex Forex products, as it offers more options, so making good decisions has a greater impact on profits. Although there are some successful binary options professionals, the majority will sooner or later switch to other products. But this does not necessarily disprove binary options: many professionals have started their careers here and have made quite a lot of money with binary options.
Trust is good, control is better: finding a suitable broker
Traders need a broker to trade binary options. As interest in this form of investment has grown steadily in recent years, the number of brokers has automatically increased. Thus, it is not easy to find your way among the many providers. Broker comparison helps and in our detailed reviews we take a closer look at individual providers to help you decide on the right broker.
Reputable brokers are overseen by official authorities and are regulated by searchers. Not every regulatory authority is equally good. For example, for German traders, it has many advantages if the broker is regulated within the EU. On the one hand, security regulations are particularly stringent here, so that EU brokers generally cause problems much less often than much more regulated brokers who, for example, are often sited in the Caribbean. The broker, on the other hand, is more tangible if it should indeed get into a legal dispute. Optimum is always a broker from your country, but there are very few German providers for binary options. Most German financial professionals attach great importance to EU regulation.
Binary Options Addiction – At A Long Term Low Risk
Common binary options criticisms are related to the high risk of loss and misleading advertising. But addiction should not be underestimated. Not many traders will come to terms with the idea that binary options can be addictive when registering with a broker. After all, it is after all a financial product and not slot machines or the like.
Even though binary options can affect the chances of winning with a good chart analysis and thus are not a pure game of chance, the two areas are similar to each other and even with binary options, success is part luck. it depends on . Added to this is the special structure: when a trade is won an amount is deposited, which is often as high as the stake. Because of the clearly defined ending, the passage of time is predictable. If the trade is really won, it will definitely create a feeling of happiness, the trader’s body releases so-called endorphins. Of course, the trader wants to experience this feeling of happiness again and again. It creates an addiction just like the slots game. Therefore, in any case, the finger away for binary options, if there is already an addiction problem or the potential trader is considered at risk.
Good risk management cannot be forgiven
If you trade binary options, you will suffer losses all the time, because trading is very speculative and despite good analysis, prices usually do not match what the trader expected. Therefore, anyone who wants to trade binary options in the long term should be prepared to have a good financial plan, in which he is disciplined. Such a plan includes a maximum percentage of the available credit that can be used simultaneously. Since a losing trade does not require a perfect trade, it must be planned for. A single loss should not affect the capital too much, otherwise it will fluctuate widely and reduce to the first negative variance.
Some broker training materials recommend that you never spend more than 10% of your total balance on a single trade. It sounds a bit, but it is still courageous, considering that several trades are regularly lost in a row. Professional traders therefore choose significantly smaller percentages and continually optimize them if they have a losing streak and their total capital therefore becomes smaller.
So binary options do not threaten existence
Binary options are not suitable for making meaningful investments that are marked for home construction, aging arrangements, or acquisitions, while still making a profit. With luck, this is what can be done, but customers don’t have it entirely in their hands. Due to the highly speculative nature of binary options, there is at least some risk that the invested money will be lost. As a result, the client has to limit himself financially, as he can no longer use his capital as planned.
Avoid the described binary options trap and only invest money whose losses are not a problem for you. Many brokers have low or no minimum deposit requirements. If you want to try binary options, you should do so with the smallest possible amount, or with a free demo account. This type of demo account is offered by many brokers and can usually be used for a limited time. Here you can trade for free and without risk and do not deposit money, so experience with binary options without deposit.
Despite precautionary measures: the risk remains
As we have seen, there are many ways to make binary options trading safer. Nevertheless, trading is a highly speculative affair that will never be without risk. For investors who, in the worst case scenario, don’t have too much of an issue with the loss of their entire investment and still want to take their chances on binary options, they can still be a suitable trading variant. To everyone else: stay away from binary options! There are always traders who want to make fast money with binary options and ignore the risks, even though they really need their capital urgently. These traders often tell themselves that total loss will not happen to them and dream of quick profits. Unfortunately, it is precisely these users who are especially often affected by total loss. Among other things, this may be due to the fact that the pressure of not losing capital means that optimal decisions cannot be made and in many cases the trader is very emotional. But even if all precautions are taken, it may still happen that all is lost. Professional traders are aware of this risk and have a plan B.
Our conclusion: Binary Options takes the criticism seriously
Important statements regarding binary options should be taken seriously by both active traders and potential new entrants. It is not a safe investment in which to invest assets that are required to maintain a standard of living or are planned for other purposes. For this there are better opportunities on the financial market.
If it is written that binary options are fake or a rip-off, then this is also exaggerated. Although in the past, there were always brokers who actually cheated and brought in a lot of money from clients, there are no scams with reputable providers. Nevertheless, it should be noted that the biggest profit is usually the broker. The client receives a financial product, which can be enhanced by a good expertise and corresponding value analysis, profit opportunities, but profit still largely depends on the opportunity. The terms of trading can be read in the terms and conditions by reputable providers, so that no trader has to be ripped off. Professional traders inform themselves in advance and sign up only with brokers where they find good positions.
Trading in binary options remains highly speculative and there is always a risk of high losses, even total losses. Only clients who consciously accept this have a chance to be happy with binary options in the long term and operate successfully.