Binary options are the relatively new type of trading that is surrounded by many myths. As always when a new product appears, many people are keen to project their stereotypes which prevent them from making a profit. As binary options are very lucrative and profitable way of trading with payouts sometimes over 90%, it is only natural to burst the mythological bubble surrounding them.
Find out the top 10 myths about binary options that are preventing you from making money!
1st Myth: Binary Options Trading is Gambling
This is the most common myth about binary options trading, still, it is completely different to play roulette and trade binary options. Gambling is based on luck and binary options trading is based on knowledge and taking advantage of it. For this reason, it is ok to say that binary options are not gambling. Traders can gamble their money in binary options simply by guessing, but they will never make a profit. Binary traders who learn and approach binary trading seriously will definitely make a profit.
2nd Myth: Binary Trading is for Wealthy People Only
It is not unusual that this binary option myth exists, as financial trading in past really was a privilege of rich people. But, binary options are democratic and are accessible to traders all over the world as minimum deposit often starts at $10 only.
Binary Options trading is created for new traders who prefer to place their trades online, without accountant or intermediaries that are frequently necessary for traditional financial trading.
3rd Myth: Demo Account is Insignificant
There are many people, even traders, who believe that demo account is something to play with. After all, there is no real risk involved. However, experienced traders understand how binary trading demo accounts are created for traders who never traded on that type of platform before, or for traders who are only entering the world of binary options. Demo account is the best way to learn about binary options and to trade responsibly as demo trading helps to improve strategies as well.
4th Myth: Binary Options Are Not Real Trading
Besides being described as gambling, binary options are frequently mentioned as something that is already determined, which makes impossible to make money in binary trading. The truth is that binary options trading takes place on world’s market and it is impossible to influence the entire trading industry in that way. Binary options analysis will show traders how there is period when the market is hardly moving, and periods when it takes an unexpected turn. Good analysis can help binary options traders to make the right movement at the right time, but it is impossible to fix results in advance.
5th Myth: Binary Brokers Are Scam
Binary options industry is getting bigger each year, and as always, successful industries attract a great number of scams. Before proclaiming that all brokers are a scam, traders should do their research, read useful broker reviews and only then make a decision about a broker.
Some traders only want easy money, so they deposit with the first broker that comes around. It is not surprising that they end up depositing with a scam, and later feel defrauded. Such traders are always saying that all binary brokers are a scam.
6th Myth: Binary Options Trading is Easy Money
This myth about binary options trading is directly connected to the previous one. Many people feel that they can handle it without prior education or even research. The result of this approach is often interaction with scam binary brokers and loss of deposit.
Binary options traders who want to make money have to put some effort into education and research before they even start. If they want to skip this part, they can always try binary options auto trading. Also, traders must know how bigger binary options trading investments usually bring larger profit.
7th Myth: Binary Options Bonus is a Free Gift
Binary options trading beginners often skip educational aspect as they are curious to start trading immediately. Of course, this means that they often don’t understand the basic terminology and believe that bonuses are free money given by the broker as a welcome present.
Binary options bonuses are additional funds provided by the broker to increase leverage, but only under certain terms. Traders can really make more money when they accept the bonus, but only if they fulfill all terms and conditions. It is impossible to withdraw money unless al terms and obligations are met.
8th Myth: Binary Options Trading is Only for Professionals
This myth is very similar to 2nd myth about binary options listed here and is a result of the history of financial trading. In the past, traders were always people who had large amounts of money or extensive knowledge. Luckily, binary options changed the world of financial trading and made it accessible to everyone.
Successful binary options traders are the ones who have enough dedication to learning and educate themselves on the matter of binary options trading. They don’t have to study business, as most brokers nowadays are offering free tools, articles, videos, and webinars.
9th Myth: Binary Options Trades Carry Unknown Risk
Many traders believe how binary options usually have unexpected results. It is true that financial markets can take an unusual turn as there are factors that are beyond human power, but in all cases, binary options traders know three very important things: invested sum, possible payout, and profit, and when they will see the result (or the binary options expiry time).
This makes binary options trading more reliable than any form of financial trading. Let’s say that trader invested $100 on a single trade, with a payout of 80%. If the trade turns out to be profitable, the trader will end up with $180 ($100 invested + $80 made). If the prediction was wrong, the trader will only lose $100 invested in that single trade.
10th Myth: Binary Options Trading is Addictive
Binary options trading is no more addictive than any other form of financial trading. However, traders should always consider having a financial and investing plan in order to avoid overtrading and forced trades. Also, traders should know that risky trades such as short-term trades that last only 30 or 60-seconds are more exciting and often direct traders in an unwanted direction, especially beginners.
For this reason, it is important to combine different types of trading and diversified portfolio. So, traders won’t depend on the only certain type of asset or trades and will have a more professional approach towards binary options.