A lot of people avoid binary options because they do not believe that they are safe. This is unfortunate because the vast majority of binary brokers are completely safe and heavily regulated. Yes, it’s true that there are a few scam sites out there, but this is true of any industry. As long as you are careful and do your research before sending your deposit money over, you should be in good shape.
This by itself, however, ignores the other half of the “safety” question. Even with a reputable broker, is it safe to trade this type of financial transaction? Or, are binary options fundamentally flawed?
The answer depends upon your experience and strategies. There is ALWAYS risk in trading and investing, and binaries are no different. If you don’t know what you are doing, you will lose money. The odds are against the random trader because of the deficit between the return on a correct trade and the loss on an incorrect trade. When you’re right, you will get about an 80 percent return. But when you’re wrong, you lose 100 percent of what you’ve risked. A random trader will be right 50 percent of the time, and this means long term losses.
To make a profit, you need to be correct more often than the deficit. Depending upon what your rate of return is, this will vary. The easiest way to figure it out is to look at 100 fictional trades at $100 each and figure out how many you need to be correct on to break even. Once you figure out that number, you can track your trades with a clear goal in mind and move forward from there. If you find that you need to be right 65 times out of 100, that’s a 65 percent correct trade rate. Anything better than that is going to be a profit for you. The better you get at trading, the higher your correct trade rate will be.
This simple technique will allow you to pick the best and safest brokers, as well. It singles out the best ones for your personal needs by looking at the assets you will be trading the most, and giving you the very best rates. It takes the focus off of the shiny gimmicks that a lot of brokers use to try and get you to send them your money. Things like deposit bonuses carry a lot of allure with them because they give you free cash. But most people never actually get to withdraw their bonus cash. A 100 percent matching bonus is nice, but it means little if you don’t ever get to hold that money in your hand. These have threshold requirements of the amount you have to risk before they are unlocked, and if you aren’t experienced in binaries, odds are you will lose your cash before you’re able to withdraw the extra cash, especially if you are trading foolishly. The bonus is great, but you need to be earning something substantial in order to get to keep them.
In other words, binary options are only as safe as the person trading them allows them to be. You must pick the right broker, and you must also make sure that you are making your trades go as far as possible. Just by doing some simple research and math, you can take a type of trade that is sometimes thought as unreliable and turn it into a wealth-building machine for yourself.
This isn’t meant to persuade you away from binaries, but rather to illustrate that they are not something you should just jump into. If you want to be successful trading, you need to put the time and effort into them to get the rewards out of them that you want. Research your brokerage choices, and make sure you have the best long term strategy that you can make. Avoid the tricks and gimmicks and focus on where you will be in a year, not what your trading account will look like after you get a big bonus. That bonus is just a number on a screen if you can’t actually use it, and that means being able to trade profitably over the long term, first. Binaries are safe if you go into them prepared, just like any other type of trading.