Learning to trade is a difficult, long but obligatory path that every beginner must follow. If the main goal in trading is to make a profit, there is no other way. Or is it possible to do without studying the theory?
Today we’re going to talk about trust management in binary options. What this method of making money looks like, the advantages and disadvantages and how much profit it can bring (and whether it can).
What is trust management
It’s not just speculators who make money on the financial markets. It can also be done by investors who understand trading with a little knowledge. And that’s great news for those who don’t want to or for some reason can’t trade on their own. But first of all, you need to learn more about this investment method.
Trust management is cooperation between the manager and the investor, in which the former operates the latter’s money. When the manager manages to increase the capital, he returns the money to the investor along with the profit, receiving a certain percentage for this.
In binary options, a slightly modified version of trust management is popular – copying trades (or signals). In this case, the investor gives nothing to the trader whose trades will be copied.
Are there differences between copying trades and trust management in options? Yes, but the principle is no different. The main difference is that when copying trades on the broker’s platform, you don’t have to pay them a percentage.
Advantages and disadvantages of trust management
At first glance, we see a significant advantage – simplicity. All you have to do is invest, and the operators will do the rest. And that’s true, because the investor really doesn’t have to do anything. However, there are other nuances that are worth knowing about. And not all of them will please you.
Let’s start with the positive points. In addition to simplicity, we can note the following factors:
- Almost passive earnings. If you have a full-time job, this option is perfect for you. You don’t have to pore over charts and watch indicators. Just invest money and wait for the balance to grow without your participation;
- Investors decide for themselves who to invest in and how much. Every platform that offers reliable trust management has statistics on each of the users whose trades can be copied. Below, we’ll explain other places where you can look for a managing trader.
Now let’s talk about the disadvantages:
- First of all, understand that managing money on another trader’s options is not a guarantee of profit for you. You still run the risk of losing money, even if the trader’s statistics indicate that your trades are doing well;
- Although there are statistics on broker platforms, they may not be detailed. This means you won’t be able to be sure about traders’ profitability.
In terms of investment in trust management, binary options are still inferior to Forex. However, as we promised, below we will tell you where you can find managing traders who will offer more detailed statistics.
Searching for management traders in the forums
There are enough themed forums on the Internet dedicated to binary options. There is a trust management theme in almost all of them. In them, there are messages from investors who are determined to increase their profit, in addition to the investors’ capital.
There may be little information in the topics themselves, but these traders often leave contact details. In a private conversation, you can go into more detail.
The disadvantage of an independent search for a managing trader is that both the investor and the trader will have to try to establish a relationship of trust, because all agreements will be concluded without intermediaries.
Trust management in binary options is attractive for both parties to the transaction. However, be aware of the risks. Before investing money in someone, think about whether you are prepared to lose money in the event of a problem. A managing trader must also be confident in his abilities, because he will be taking risks not only with his own money, but also with investors’ capital.
