As binary options are a fairly new trend in the financial industry there have been a lot of misplaced myths about trading them particularly as when people hear the word ‘options’ they think of complicated financial derivatives. In fact, binary options are not a complicated mystery at all, thus we aim to simplify binary options for you.
Dispelling the Myths
Firstly, many people believe that trading binary options successfully is based on luck. This is not the case, and although there are at times last minute extreme changes in prices, if you learn trading strategies you will be able to predict fairly accurately the price behavior of an asset and thereby make a profit on your trades. You don’t have to be a financial guru to trade binary options. If you have the correct approach binary option trading can a wonderful method of increasing your income. You just need to be positive and want to spend time learning about the characteristics of binary trading. Binary options were designed to be traded as a simple investment route compared to the other conventional markets such as the foreign exchange and commodities markets.
Anyone can trade binary options, however, it’s not for investors with a gambler’s mentality. A trader with a gambler’s mentality can lose a lot of money as all they do all day is mindlessly buy calls and puts. Predicting if the price of an asset is going to fall or rise within an hour is very exciting because in a moment the price can change due to economic news or some other information which can cause an asset to gain or lose in price.
Also many people think you need a lot of money to start trading options. This is also a myth. In reality, you can open an account with a respectable account manager with very little money. For instance, with Banc De Binary, you can open an account with as little as $250. Meanwhile, account managers don’t ask you to pay commission fees either.
Most people think that trading binary options means sitting in front of your computer all day long buying or selling calls and puts and then being stressed out for days waiting for your option to expire while wondering if you predicted the right way or not. This is not the case as binary options are short term investments which on, for example, Banc De Binary’s platform include expiration periods as low as 30 seconds. So they are very short-term, stress-free, investments indeed.
Another popular myth is that before you start making money and become a successful trader, you must lose a lot of money while you are going through a trading learning curve. This is not true at all as a trade can be made on as little as $1, thereby allowing plenty of room for practice. In a nutshell binary option trading is simple and affordable and is fast becoming the investment of choice.