Because of stupid advertising to the most ignorant and greedy segments of the population, usually through very basic persuasion, binary options are often mistaken for a game or casino.
Yes, they are positioned in a similar way. Binary companies emphasize in every possible way that 2 buttons are the simplest and sponsor sports teams. Some sponsor Juventus, others sponsor the AGI Racing team in Australian Formula and there are a lot of similar examples.
Sports teams, strange choice, isn’t it? Not strange at all – binary brokers need an audience that is passionate about sports betting and wants to try something new. Binary options cater for all types of betting and gambling fans.
However, there’s a catch there. The game… our whole life is a game, as you understand it. In the world of real currency trading, this term is often used – a currency game. And world-famous citizens like Alexander Elder write books with absurd titles “How to play and win on the stock exchange”.
A “game”, well, what can we say? They’re actually playing in a casino. For considering the stock market a game of chance, all these citizens need to be beaten, but the fact remains. Speculation on the stock market can indeed be considered gambling. Whether it’s stocks, bonds, commodities, foreign exchange assets, options, futures and dozens of derivatives.
However, there is a huge difference between gambling and the work of a professional trader. What is the goal of a gambler? Depositing quickly, diversifying the deposit, “millions of dollars in 1 week” and other garbage you constantly see on the Internet. The task of a professional is to work with assets traded on the stock exchange and earn capital steadily. That’s what they’re doing.
Binaries have an advantage here. For example, to trade stocks intraday on the New York Stock Exchange, also known as the NYSE, you need at least $25,000. In binary, you can start with $1 (or $100 on the Nadex binary exchange) and dream that you’ll turn $1 into a million. That’s not going to happen, although one guy with 500 reals in binary reached several million in a few days, fabulous luck.
How to make a lot of money with binary options
Once, a representative of one of the Brazilian binary companies spoke to me on Skype, and he was horrified. After switching to a new platform, a guy came along who went from 1000 reais to 400,000 in one day and didn’t think about stopping. What’s more, judging by the server logs, he’s been trading all these days without stopping to eat or go to the toilet. The broker was tearing his hair out and didn’t understand whether this was a “hole” in the new platform, or whether they were facing the greatest genius in trading.
The reality is much simpler. Sometimes you just get lucky. It happens in casinos, in cards, it’s the theory of probability. Sometimes heads or tails can give the same result 30 times in a row and that’s normal – it happens. If you’re lucky, you can go very high.
You don’t need to know anything about trading, technical analysis or anything else. I once described an example of a taxi driver who made 25,000 dollars in binary, simply by using the banal pivot zones (we’ll talk about them later).
He didn’t know technical analysis. And he didn’t know anything. I just entered a pivot level rebound with a martingale. Bam – 25 grand in a week. So the broker put him into hibernation for two weeks, waiting to see if he would fail or keep winning.
But the taxi driver, an experienced gambler, clenched his fists (although everything inside was burning with the desire to continue), switched off his computer, didn’t answer the broker’s calls and drove around the city for a day, trying to distract himself. Realizing that it was useless to wait, the broker paid out those funds.
Binary casino players love to use pivot points.
I know many examples of this kind of gambling luck. Heroes keep appearing in binary games that break the bank in the martingale. There are plenty of them in sports betting (see the wonderful movie “Money for Two” – that’s right), in casinos, poker, anywhere.
I myself, as a student, together with my group, would go out for video poker in the nearest casino and sometimes get 2 royal flushes in a row. Statistically, this is extremely unlikely (people who know the subject will understand) – but it happens, against all odds. The student wanted to eat. But, in the end, he just kept his profits. Only later did I realize how fabulously lucky I was: there were more and more players getting into debt, whose parents had to save them.
Excitement, luck… yes, you can work the markets like that. Forget that the interbank market quotes are on the chart and just play, counting on luck. However, luck cannot be predicted. It is unique. You can’t anticipate it. You can’t force luck to obey.
Therefore, citizens who have made a few million reais in a week, within six months that money ends up being returned to the brokers. And then they deposit even more. There are practically no exceptions.
As it comes, so it goes. Any fabulous gains are extremely short-lived and very, very quickly returned to the broker.
The main difference between playing and working in the market
How is gambling on any market different from working? Gambling or betting involves betting on a certain event or dice for material gain. At the same time, the main emphasis is on the chance of luck, on luck – in other words, on the fact that probability theory will work in your favor. Luck is your main ally here.
In the market, they invest in certain financial instruments. For example, in shares to receive dividends and speculate on their price, in various commodities, derivatives and the like. Every time you buy shares in a company, you are sponsoring it, providing funds for its further development.
Likewise with bonds, investment funds and other instruments, where the outcome of investments, unlike luck, is usually known in advance. For example, take a look at the statistics of an investment fund that has been in operation for over 20 years and see what annual income you can expect as an investor.
Binary options: investment or speculation?
Can binary stock and betting options be considered a type of investment? What about ordinary, so-called “vanilla” options?
It depends on the trader’s objectives. He may be an investor who is in no hurry to make a quick profit, or he may be a speculator who wants to make money immediately. Investors like to invest for the long term. Speculators are looking for quick cash and jumping through hoops, trying to find one where you can make a profit in the shortest possible time.
Based on this, binary, whether on official exchanges like Nadex or in European bookmakers, is not an investment, of course, but a common speculative tool. And of course you can speculate to such an extent that it will be indistinguishable from gambling.
However, speculation is not a game of chance. Yes, it is a quick profit tool, but nobody buys shares for luck. Complex fundamental, technical and volume analyses are always carried out, risk and money management, various trading systems for certain derivatives are used.
The risks in this case depend solely on the trader. And this is absolutely true for binary options. You can work with passion, martingale, on 60-second options, or you can follow money management, when the transaction is no more than 5% of the deposit, don’t try to recover, develop an effective trading system and earn from it.
And, of course, in a casino, a player counting cards can take a beating at the back of the room. No one has been hurt counting the number of candles or analyzing moving averages yet 🙂
Thus, binary options can be considered a speculative market instrument that is obtained using analysis methods proven on Wall Street. Like any tool, it can easily be turned into a meaningless game of chance. This is exactly what happens to newcomers.
Gambling
Beginners who learn about binary options always behave in the same way. At best, they Google some strategy like “100% strategy for binaries” or, even better, “100% signals”, after which they put money into the broker and hope for good luck.
At the same time, which is funny, it seems that they “work” like this – in fact, the guys turn the crank of the slot machine. Without the basics of technical analysis, psychology, money management, practical experience and many other things, 80% of binary options traders do badly and leave at the end of the month, in a year there will be, at best, 1 in 100.
Binary options for a beginner
How do professionals work? They never rely on luck. Years of experience, an understanding of market mechanisms, technical and fundamental factors that affect the price, the fundamentals of business and the economy – all this helps them to sustainably take money out of the market.
While a novice recklessly doubles down on 60 seconds, a professional can bet on just one proper entry into the market over the course of a week.
Sometimes I open a chart day after day, see no conditions for my trading system and close straight away. Patience is the main quality that distinguishes professionals from morons.
A gambler can bet all or half of his deposit. A professional trader rarely risks more than 1-2% of their deposit, whether on binary options, Forex or the stock market.
Pan or Lost
It’s up to you which binary options you choose. Do you want things to be like a casino? No problem, here are all the possibilities for that. Two buttons, crazy interest rates, the theoretical possibility of winning at least a million in a day, please play. Many people are playing.
Do you want to make money from it on a sustainable basis? Make a living from it? Do you want to turn it into your job? Then do it. Read trading books, practice, forget about quick wins.
As you can see, there are only two possibilities. And the sooner you decide what you want to achieve in this market, the clearer your trading destiny will be.
