close
Finance

The Pros and Cons of Binary Options

binary-options-1024×424

Binary options trading is something that many advanced traders are trying out these days. It provides traders easy access to the foreign exchange and commodities market.

Now, it’s also not without flaws. If a trader isn’t careful enough, he or she can experience huge losses that can put a dent on his investment goals. Here are some of its pros and cons.

Pros

Simple

Right off the bat, traders can see that binary options trading require them to follow only a few basic steps.

The first one is to find a broker and find someone who can assist you in trading. Come up with an analysis of the price movement and make a trade.

After you have set up the trade, the only thing you need to do is monitor and track it.

You can bet small

You don’t necessarily have to bet huge amounts at the beginning. You can bet small amounts of trade and take your time to get comfortable.

And if you still like doing the small bets, you may stick to it. As long as the returns are sufficient to keep you trading, you can continue betting small.

Minimal Risks

The risks are minimal because you’re only betting small. You are the one to decide how much you want to risk, and therefore you have control of the risks you take.

In other words, you know how to make your trade go in your favor.

High and Fast Returns

The amount per trade of binary options is efficient and only varies a small amount from the standard trading.

If you can do it properly, you can expect to get as much as 90% returns in 15 minutes.

Market Conditions

Depending on the strategies you use, the changes in the market conditions can be in your favor. As long as you are aware of the possible changes and market moves, you can put your trade in a position where it could benefit you either way.

Cons

Scamming Risks

This risk is ever-present. Binary option trading in many countries is prone to fraudulent platforms. You can find reports where traders who made a good fortune were not paid by the broker.

Always do your due diligence and check whether the broker is trustworthy. Check its track record and find reviews of it online.

No Demo Accounts

When your trading binary options, you don’t get the chance to use a demo account. And because you can’t use a demo account, you don’t get to get a feel of how the actual process works.  You don’t get to check how the platform works and how you can use it to minimize the risk of losing money.

Market Regulation

Perhaps the biggest hiccup in this otherwise lucrative trading vehicle is that there are very few regulated binary options brokers.

There is no directing authority to control and monitor the system. Governments and other authorities cannot track your money invested and profits. And that’s not good, since many traders prefer markets and brokers that are regulated.

Eddie Nobles

The author Eddie Nobles