The reply to the question posed in the title would be “to flip a coin”. After all, that is what binary is all about. It is a situation of either this or that. In reality the scenario may not be that simple or unpredictable as the flip of a coin, but it is quite close to that so far as simplicity goes. One has to be aware of some other aspects before venturing into binary options trading.
Is it profitable to trade binary options?
At the outset, the investor who has gone for this option would have to accept the fact that this form of investment has high returns and quick ones at that. It is only with a positive attitude that the investor would be able to pick up the nuances of how to trade binary options and how to make fast and high profits from it. Without this confidence in not only the investor’s personal capability but also that of this trading process there is little chance of making any substantial profit.
What is binary options trading in the first place?
As regards with the aspect of unpredictability, there is the issue of how binary options trading is done that comes to play. One has to learn the trick and that comes with reading. With the net there is no dearth of such reading and learning material. Blogs, forums and the likes are good enough for one to go to and read, in order to learn. Of course there is the issue of being able to sift the genuine from the fake.
The basics of a Binary Options Trading System
In this form of trading, the investor decides whether a stock or a commodity or some other liquid asset would rise or fall before the day’s trading session ends. The investment that the traders need to put in is quite small. The trader then places a ‘call’ which means the trader predicts the value would rise. The trader would place a “put” in case the prediction is for the value to fall. It is only the direction of the value that would make or break the bet that traders has placed with the call or put functions.
The yield is fixed based on win or loss and there is no factor of number of shares and the price of each etc, which is the scenario in the normal stock market speculations. The simplicity that this form of trading features is quite evident from this basic explanation.
Is there a need for Binary Options Brokers?
The straight response to that query is a big no. The basic reason is that this form of trading is still new and therefore no broker worth their bread would be any more experienced than the investor themselves. It is therefore not very advisable to go to a broker in the first place. It would rather be more intelligent to check for blogs that some brokers would have created. Reading the blog entry would be a better way to draw advice from.