Don’t gamble on binary options.
That was the advice given in a 2010 Forbes Investor Team article. According to the author, investing in binary options is gambling, “pure and simple.”
Binary options trading isn’t about trading at all… it’s about betting, and it’s a loser’s game.
Do you believe it?
Or do you believe the stories of people making hundreds of dollars each MINUTE on binary options trading?
Let’s talk about it.
This could be the most important article you read all day.
The Basics of Binary Options Trading
First off, binary options are traded on both the North American Derivatives Exchange (Nadex) and the Chicago Board Options Exchange (CBOE). They are absolutely legal and above-board. Any horror stories you hear are from unregulated off-market trades.
Deciding against binary options trading based on the experience of those who were fooled by a scammer is like saying you won’t play the roulette wheel in Las Vegas because a neighborhood backroom gambling operation in Pakistan was fixed.
You may still choose not to participate in binary options trading – but make sure you base that decision on the right reason. Many people are drawn to what’s come to be known as “digital” options because they are simple to understand and they give the same opportunities to the small investor as to the big fish.
You don’t have to be wealthy to get into binary option trading. With binary options, the trading floor is level.
How binary option trading works
Digital options are an all-or-nothing investment. You either make a correct call and finish “in the money,” or you don’t. When the option expires, you either get the full settlement value for each option you take (always $100) or you forfeit your investment (always less than $100).
You may be familiar with the practice of “taking an option” on real estate. You pay a certain amount down and agree to buy the property at a pre-determined price on a set date. If the value of the property increases during that period, you made a wise decision. If it decreases, you can still buy (but not at the lower price). If you don’t, you lose the price of the option.
In binary option trading you’re asked one question: Will the value of the asset you’re taking an option on be above or below a certain price point when you either decide to settle early or at the time of expiration?
Some binary options traders base their decisions on economic events: Will the upcoming news on employment rates cause the asset to move up or down in price? Will the Federal Reserve decide to raise, lower, or maintain the current level of the prime interest rate… and how will that affect the asset?
Others look for trends. Others stay tuned to the news. Binary options trading decisions may be based on any criteria you choose. And the amounts you gain or forfeit will depend on the accuracy of your decisions.
Types of binary option assets available on the Nadex include:
- Stock index futures
- Economic data
- Foreign Exchange Market (Forex)
Not only are binary options simple to understand and adaptable to the type of market movement information you like best, they cross over the stock/commodities barrier and provide a more varied trading opportunity than traditional trading options.
The Binary Options Wild Card – Binary Options Robots
One thing the writer of the 2010 Forbes article didn’t have for reference is “binary option robot” trading. The robot is really just software based on pre-programmed algorithms.
These “robots” base your trades on machine logic and can provide exceptional returns on your money. Binary option robots use the same method investment banks and other financial institutions use in their banking operations.
This trading method for digital options uses a combination of the principles of quantum mechanics and the basics of Schrodinger time-dependent equation. Though binary options robots are still a quite recent development, they have reportedly created massive returns for early adopters.
Why robots rock!
Unlike humans, the robot always adheres to strictly disciplined pre-programmed trading rules. Even when the market gets more volatile and susceptible, the robot maintains a calm and intelligent approach.
Greed, for instance, causes many investors to lose money in trading activities, but the robot doesn’t get greedy. Not ever. It maintains the attitude of an expert trader at all times.
Benefits of trading with the help of binary options robots include:
- The binary robot has settings that allow you to toggle the risk level you’re willing to accept
- Robot technology makes binary options trading even simpler to understand
- You can set the maximum number of trades you want to complete in a day, the amount of money you are ready to risk, the level of maximum daily loss or gain you are comfortable with, and the assets you want to trade
- The robot ensures secure and low-risk trading by opting out of the market when things go against your best interests
- You have the option to reverse trades
When you use a robot to trade binary options, you tell the machine the parameters you want set… and the machine does EXACTLY as you request.
You don’t have to worry about losing more than you want to risk. Binary options give you full control over potential loss amounts.
How Can You Get Started with Binary Option Trading?
Look for a robot that allows you to switch from robot trading to self-selected trades. That gives you opportunity to pit yourself against the machine and test your skills. To check your results, go to your personal trading history on the robot site.
Financial experts and programmers ensure the software stays constantly updated with market trends. Your robot will react instantly to market changes, and once you have configured the robot it spreads the risk of trading binary options.
Do binary option robots work?
We’ve heard of consistent returns in the range of 75-90%.
How can you find out more? Put in a little study time before you invest. Check out a good binary options trading guide.
And always remember this: people can and do lose money in every type of stock market and commodity trading. No system is perfect. Not even robots.
If you’ve money to invest, and you can absorb the risk, give binary option trading a try – whether you choose robot-assisted trading or not.
You might love it. You might hate it. But you’ll never know until you give it a go.
Abel Cane writes about opportunities for entrepreneurs, and he’s intrigued by the idea of binary options trading.