Binary Options Trading Myths and Factsby John A. Master Binary Options Trader
Despite the fact that binary options trading is not new, many myths continue to surround this financial instrument. The fact that binary options have only become popular in the past few years could be one reason as to why this instrument is linked to misinformation. Being able to sort the myths from the facts is extremely important.
The most common myth of all is that binary options trading is gambling. It is not difficult to see how this myth was created. Predictions are a part of this form of trading. However, it was approved by the SEC in 2008 and is viewed as a legitimate form of trading. Risk is a part of all forms of trading, which means that in this respect binary options trading is no different than another other form.
Another popular myth is that binary options trading is a scam. While there have been scam brokers in the past, the industry as a whole is certainly not a scam. The selection of a reliable broker will virtually eliminate the possibility of being scammed. Binary options broker reviews will point traders in the right direction and help them avoid potential scams.
Misinformation also surrounds the amount of money required to begin trading. This likely stems from the fact that other forms of trading, such as forex, often require the trader to deposit thousands of dollars prior to trading. The typical binary options broker will require a minimum deposit. However, the average required deposit amount is around $200.
An additional myth that surrounds binary option brokers is that the broker is not necessary in trading. This is completely untrue. The broker is an absolute must, as trading contracts are entered into directly with the broker. No broker means no trading platform, which of course means no way to profit from binary options.
One of the most unfortunate myths is that binary options trading is difficult to master. In reality, this method of trading is widely considered to be the simplest of all. Basic trades require only a few decisions to be made. Additionally, new traders have access to a plethora of educational information and tools that can be taken advantage of prior to trading. Tutorials, e-books, webinars and more are offered free of charge.
An important myth that needs to be addressed would be that binary options trading presents the opportunity for the trader to lose unlimited amounts of money. The truth is that the trader can never lose more than the initial investment amount of the trade. The trader remains in complete control of the potential loss. The trader will also always know upfront what the profit percentage will be should the trade end in the money. There is no guesswork on the financial side of binary options trading.
Anyone who is considering trading in any form must know the facts prior to making an investment. Education is, and will always be the key to eliminating the possibility of being scammed or making unwise investments. Binary options trading is certainly no exception.
Created on Dec 13th 2012 06:27. Viewed 4,988 times.