Advantages And Disadvantages of Trading Binary Options
By IQ Option
Articles about the advantages of binary options are spreading throughout the web every single day. The brokers publish their ‘shining’ texts about how is it easy to make money on binary options. As the result, naive traders lose their first deposit with the first ‘opportunity’. As for us, It’s time to add some clearance to this advertisement approach, so we will talk today about binary options’ pros and cons.
Now, as we have already discussed all the disadvantages, we can move on to better hands. I hope that most of you have already taken off the pink sunglasses.
Advantages of Binary Options
Well, the main advantage of the binary options trading is in the profit percentage which is very high. Generally speaking, you can earn up to 85 % of the profit with one single deal. That sounds great, right? So you can double-up the amount of your bet in 5 minutes. Any other financial instruments do not have such a profitability.
Binary options carry a high level of risk and can result in the loss of all the funds. Traders should never invest money that they cannot afford to lose”.
Comparatively low initial capital is definitely the advantage of binary options trading. Especially when it comes to Forex and others. Let’s say, a deposit of 100-200 dollars would be enough to work with good risk management and control all of the risks (we can remind that the initial bet should not exceed the range of 1 to 5% of your deposit). By the way, the risks are only for the amount that you have opened a deal with, not more or less.
Small initial amounts
Online accessAnother binary options advantage is the mobility and accessibility of the trading. You can use your smartphone or a tablet or a laptop to trade (except for that flatiron, you cannot use it). In this way, everything is done for the trader’s comfort. There are fast mobile apps and browser versions. The trading platforms themselves are easy to find online, so the trader does not need any special equipment.
AccessibilityThe learning issue is the final point in our binary options pros and cons rating. The binary options trading is good because you can learn how to trade in a profitable way and all the information is available online. We are not saying that it is easy and it would take 5 minutes. But you can learn it, you do not need any special knowledge to do that. So everything depends on your motivation. The spet-by-step instructions how to learn are also available.
Disadvantages of Binary optionsWe’ll start with the disadvantages, of course. Because you need to know your enemy in the face.
The possibility of losing money is surely the main disadvantage of the binary options. Yes, binary options are extremely profitable, for one single bet you can get up to 85% of the profit. But at the same time, you can lose 100% of the investment you made. Especially if you are just guessing and clicking the buttons. Anyway, this aspect of the binary options trading has to be considered.
Generally speaking, we can just call them usual swindlers or scammers, who represent a significant disadvantage of the whole binary options trading space. Because, and we are sure that you will agree with that, it’s very offensive to know that you have been frauded all the time: they do not pay out the money you made or a manager took all the money from your card by himself (usually such a practice is in place via TeamViewer, so don’t give them access to your computer to someone you do not know). Unfortunately, we have to admit this fact that the number of the scammer brokers is increasing every single day, such frauds as MyBoption, Metainvesting, Daily trades, ScalaTrade etc. You can continue the list indefinitely. But the problem is that even some old market players start to make some frauds for their current clients. We can use examples of 24option, Optek, Optionrally. So you need to be very cautious when choosing a broker to trade with.
Another significant disadvantage of the binary options trading is Holy Grails, as we call it when traders do not want to learn about how to trade. We also call it a “Pinocchio syndrome”, a widely known fairy tale. So you can approximately imagine what can happen to you (if you can not then it’s time to read the book). But there is also a fault of unscrupulous sellers of different robots, special trading strategies and other unique methods, which are represented all across the web. The beginners, who do not understand a thing here, are being caught by the hand by someone who starts to ensnare them by different century mysteries, methods of millions, money secrets and other bullshit. We have got an advice for you. If you see such a silver-tongued headline, then you should send such an offer to the spam folder. Just save your money and nerves.
Well, demo account exists but only in a half of the brokers. But there is no sense in that because the brokers help you to trade on the demo account with the purpose that traders would move to the real account faster. But the real demo accounts, where you can learn how to trade, they just do not exist. Do not be surprised, but it is a big disadvantage for many traders nowadays. Moreover, it is a huge disadvantage. It’s just very important for some beginners to have a possibility to click the buttons, and the virtual trading is very boring and absurd for them. By the way, demo accounts did not exist at all several years ago.
No Demo accounts
The stressThe stress is one more disadvantage of the binary options trading. Yes, we all know that we need and we can fight the stress. But to be honest, who does that? Of course, nobody does. By the way, traders should work on care about their nerves and health.
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