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Are Binary Options Better than Other Trading Methods?

It depends. There are several things to take into account, such as your skill level and market knowledge, the amount of money you want to put into it, how much you feel comfortable risking per trade, and how often you will be trading.

Experience

As a general rule, to be successful within binary trading, you should have just as much knowledge of the markets you will be trading as you would if you were within any other type of trading. However, because the assets you will be trading do not need to move as much to make a profit, there is more of a margin for error. Also, you do not need to be as exact in your measurements to secure a decent profit. More knowledge will translate to more cash in your account, but you don’t need a ton of market know how to be successful in the binary market. So, market experience is helpful and leads to higher profits, but it is not absolutely vital to make a profit.
Taking the Right Method

Trading Amount

The amount of money you will be putting into your trading is important. If you have tens of thousands of dollars to invest the trading you do will necessarily be different than if you have $500. Because binaries allow you to make big profits off of small amounts, you don’t need a ton of money to see long term success here. However, you do need patience and skill to get here, and a lot of new traders learn this the hard way. If you are new to trading, you probably do not want to front a lot of money before you begin. This seems like common sense, but brokers often will urge you to deposit more in order to get a big welcome bonus. If you have the expendable income and don’t care whether or not you lose your money, this is fine, but the bonus should not be your focus.

Trading Risk

No matter how much you deposit, your money is not at risk until you begin executing trades. Within the stock market or Forex market, you usually need to risk large amounts in order to make your trading worthwhile. Stocks and currencies do not often move enough to make a short term trade worth it for you unless you put up a lot of cash per trade. Leverage helps with this, but that’s still money that you are risking, even if it is borrowed.

A lot of people are against binaries because they are an all or nothing trade. You either get a full profit, or you lose everything. However, the amount that you are risking at one time should always be smaller than within any other type of trade. If you lose it all, the loss shouldn’t be that bad. And because the profit rate is so high per trade, you don’t have to risk a lot at once. An 80 percent return is unheard of in 15 minutes within the stock market, but in binaries, it is the norm. By risking less at once and gaining more quicker, you can get comparable (or better) profit rates with less risk at any given moment. If you are looking at large amounts of cash at once, this doesn’t work out, but for those that want to risk less per trade and still see a profit, binaries are often the best choice.

Trading Frequency

How often will you be trading? Day traders in the stock and Forex markets often make dozens of trade per day. The problem is that this can be costly. Stockbrokers charge per trade, and within the Forex market, you will find that there’s a gap between the price you buy a currency at, and what you sell it at. These all cut into your profit rate when you trade several times per day–even if you’re predictions are correct. With binary options, there is no cost to your trading unless your predictions are wrong. You will be wrong once in a while, but the more often you’re right, the less you pay your broker in doing business with them.

In other words, binaries are great for newer traders, smaller traders, and those that want to trade a lot. This doesn’t mean that others should avoid them, but these people will see the biggest benefits from using the binary market.