Risk of binary options

Anyone who informs themselves about binary options on the Internet is usually quick to spread risk warnings. It shows, among other things, that the risk of loss is very high and it is possible that the entire deposit may be lost. But how dangerous is trading in binary options, which is also very popular among beginners? Should he be better avoided, or is this form of trade better than your reputation? We have overcome the pros and cons of each other in detail and want our readers in this article objectively about the risks, but also the trading opportunities with binary options informed.

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Binary options are highly speculative

Binary options are considered one of the most speculative forms of investment. This is because the development of prices is difficult to predict and especially with short maturities always change unpredictably. Therefore it is possible to accurately analyze the price and make a statement about the most likely course, but here also the luck factor plays an important role. Therefore, only money that needs to be invested in trading, losses that will not cause major financial restrictions for traders. If in doubt, first only a small amount is paid. Beginners can trade binary options on many providers without too much risk. Money needed for other purposes should not be used to trade in binary options.

 

 

Bets with high profit or loss

=Binary options are designed to help beginners get started in derivatives trading. Although “classic” financial derivatives such as Forex or CFDs have many options for opening and closing positions and therefore also many sources of error, binary options trading is deliberately preserved. The option period has been set at the beginning so that the trader must not close himself. The actual amount of price change is not important for binary options either. It only needs to be predicted whether the course will expire after the expiry time is higher or lower than the start time. If the dealer is right with his tip, he wins, if he is wrong, he loses his bet. Therefore, binary options have the same structure as sports or other bets and are easy to understand even for beginners.

There are only a few options to make a decision, which makes it easy for beginners to focus the important analysis and not have to deal with too many factors. Professional traders, on the other hand, often turn to more complex forms of derivatives trading such as CFDs, because the larger number of options to make a decision significantly reduces the luck factor compared to binary options.

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The best binary options winning strategy

Safe profit strategies do not exist when trading binary options. Often the risk of loss is high, because experienced and professional traders are at high variance. They try to keep them away by acting with sophisticated risk management binary options.

To be able to profit in the long term with binary options, a very good background knowledge is required. Traders need to know how to analyze prices to best estimate their course. However, even the best traders will always be in a phase where they cannot make a profit, but lose money in trading. This is calculated and, if possible, should be compensated for with risk management in mind.

Successful traders continue to educate themselves and recognize when it pays to make a trade. They increase their binary options chances by investing exclusively in trades with positive expectations.

 

In addition to the trading risk, there is the risk of fraud

The risk of binary options is already very high, but there is another added danger: not all brokers offering binary options trading are reputable companies. Since trading with binary options has become more and more popular in recent years and attracted by the simple structure of trading and many beginners, unfortunately, some fraudsters try to make a profit on dubious offers at the expense of customers. There are several possibilities. It can, for example, Trade prices are manipulated in favor of suppliers. Therefore, traders lose more bets than usual and brokers, who in this case act as market makers, ie as , the legal process is difficult and the probability of success in a lawsuit is low. direct trading partners of customers, making profits. Another danger with dubious brokers is that they don’t pay clients’ funds reliably. Because such brokers are mostly outside the European Union

Therefore, clients of binary options brokers need to make sure that the selected provider is serious and, if possible, has an EU license. In our numerous test reports, we also draw conclusions from the customer experiences of different brokers.

Possibilities and limitations of price analysis

To succeed as a long-term trader, beginners need to interact intensively with technical analysis. Just with the necessary knowledge binary options offer winning possibilities that are not just based on short-term luck, but can be sustained over a longer period of time. However, it must be clearly stated that even the best analysts cannot predict the course with certainty. Too many factors play a role here and just because of the short maturity of binary options, the price is in this short period of time not really calculated. Therefore, technical analysis is not about making 100% safe decisions, but the goal is to predict the most likely price. Not all times are favorable for entry. Therefore, A good trader carefully considers whether it is possible to predict the probability of price development so well that it is worth placing a trade. In case of doubt, it is better to stop investing, because a high supply will give you better opportunities in a very short time.

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Without solid risk management, it’s pure gambling

In order not to experience losses in trading, professionals usually use relatively conservative risk management. This means that even for promising trades they never spend more than a fraction of their entire balance. With each trade, the loss of the entire investment threatens and this will not affect the credit amount too much. Therefore, the maximum amount of investment will always be related to the available capital considered: The trader sets himself a certain percentage, which may not be exceeded. The lower this percentage, the more the risk of binary options can be minimized to lose all trading capital when trading decisions are consistently made well.

 

Professional binary options trading

Although the risk of binary options is very high, there are still some professional traders who specialize and make a living in this form of forex trading. Although many professionals due to the variety of options often sooner or later on forex or CFD change , appreciate professional binary options only the simplicity of this type of investment. However, good professionals also know that there is no binary options strategy that is 100 percent profitable and suitable for the use of their capital.

To be able to trade binary options professionally and in the long term, excellent risk management is essential. In social trading, successful traders recently also have the opportunity to earn additional income by allowing other traders to copy and apply their investment strategies in real time.

 

With a demo account trading can be tested risk-free

To get a first impression of binary options trading and try it for yourself, there is no need to take financial risks. Meanwhile, many brokers offer free demo accounts. This can be opened quickly as it requires only a few details. After that, customers can freely and without obligation by playing binary options trading money.

Not only to know the broker and market, free demo account. They are also a good way for already active traders to train their own skills without risk and continue to develop them. New strategies do not need to be tested with real money, but can be tried and tested for free until the user can definitely use them profitably even with real money.

Binary option margin is very rare

Although the risk with binary options is high, as many warnings indicate, there is an obligation to make additional contributions, as is often the case with brokers for other financial derivatives, but this is not a common practice for them. This is because binary options are financial bets that only use the actual amount in the account. Unlike leveraged products, the trader cannot lose more than the actual usage on the trading account. This has the great advantage that binary options are well risked. Traders cannot deposit more money into their trading account than they can easily lose without it to block finances.

 

Bonus payouts should live up to high deposits

Many online binary options brokers offer their clients a deposit bonus on their first deposit, or perhaps even on additional deposits. This is to inspire customers for their own offers and stand out from the competition, after all, merchants get here given additional credit. Many traders are tempted by such bonus payments to deposit more money on the trading account, as planned, because there is usually more money “paid” for higher deposits. .

Of course, the broker does not have any money to give. As a rule, they do not make losses on bonus offers because the payment of the bonus balance is subject to strict conditions. As a rule, customers have to convert the bonus amount several times into a trade before they can actually pay it. The terms of this transaction are designed by the broker so that the broker’s sole profit in implementing bonus credit additional costs are found. Therefore, bonuses are not really gifts. The deposit with the broker should always be so high that the trader thus has no financial problems, even if the entire deposit should be lost. Of course, if there is an additional bonus, it is welcome and can actually increase your profit in this situation.

 

The results of our analysis: Risk can be controlled with the right methods

Binary options actually have a very speculative character and luck plays an important role in trading. Therefore, this form of investment is not suitable for every trader and total losses are possible at any time despite good risk management. Therefore, only money that needs to be used, which is not needed immediately for other purposes and the possible loss of which is planned from the beginning. Because for most brokers, binary options funding responsibility is that traders risk the maximum amount they have paid into the trading account. This should be kept low Losing customers does not represent a major problem.

Before you start trading with the broker, please inform yourself in detail about the terms and make sure there is no additional financing. Despite good price analysis and professional risk management, trading in binary options remains risky and can result in the loss of the entire deposit.

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