When you’re looking for ways to make money investing, odds are that you’ve heard of binary options. And you’ve probably seen videos like this one online:


This video, titled “Binary Options Secrets,” claims to let you in on some very useful information that will allow you to quit your day job, stop commuting, be a lazy bum, and somehow strike it rich all at the same time. Every sixty seconds you can make hundreds of dollars, and best of all, “it’s all automated.” While all of this sounds great, all the old aphorisms are true: You can’t get something for nothing. That’s a rule of life and it’s just the way things are, because if you could get something for nothing, the universe wouldn’t work. It’s the First Law of Thermodynamics.

“Binary Options Secrets” and similar videos on youtube claiming easy, automated money are all scams. Does that mean that binary options trading is a scam? No! Trading binary options is not the scam but the claim that anyone can easily make money hand over fist is.

Before binary options was a big deal, it was Forex where we were seeing all the scams. That market got a scammy reputation too as a result, but saying that the Forex market is a scam is like saying the stock market is a scam. Enough people trade stocks successfully to know that’s not true. Enough people also have lost money on the stock market to know how easy it is to have your investments go against you. Binary options presents the same familiar double edge as every other market.

You can win or you can lose. It’s a business of risk.

Why It’s A Scam? – What is Not True?

The biggest scam is always believing that there is some special thing you can learn that can get you out of having to do the work. The scam is the claim that you can push a button and make easy money over and over and over.

The moment someone tells you that you can make a bundle of money doing nothing, run, don’t walk, the opposite direction. The Binary Options Secrets video tells you that all you have to do for all of your problems to be over is just push a button, with no prior knowledge needed.

The affiliate who made this video is trading off of desperation, similar to the rash of cedarfinance.com scam videos we reported on last week. We all want more than we have, especially during these difficult economic times. But any real solution to your financial problems is going to involve time, effort, and patience—not just pushing a button.

On the surface, binary options are pretty simple to understand (not sure how they work? Visit this site for a course on trading). Trading a Call/Put option does on the surface literally involve pushing a button which says “Up” or “Down” (or “High” or “Low” or “Call” or “Put”—they all mean the same thing) in response to a question about whether a given financial asset will be above or below a certain price by a certain time.

Putting your money on red or black while playing roulette is every bit this easy though, isn’t it? Your odds of success with a random selection or by selecting whatever the majority of traders seem to be selecting or any other arbitrary rule is no more going to make you rich than choosing red or black while playing roulette.

You wouldn’t think you could spin your way into success with roulette, so why would you think you can gamble your way into success with binary options?

While we’re at it, we might as well tell you that with binary options trading there’s quite a substantial “house edge.” Your broker has a huge advantage over you—you usually get about 10% of a losing investment back but you only get a 75% payout if you win.

The Real Deal About Trading Binaries

The real deal is that you can make money trading binary options. Fast money. Yes you can make money in 60 second options. They are extremely popular right now. They are also extremely risky but that does not mean that you can not make serious money trading them.

You can make money fast. That part is real. Binary options expire from as fast as 60 seconds up through 5, 15, 30 minutes and even longer with hourly, daily and weekly contracts.

The reality is that underneath that simple decision of “Up” or “Down” there is a lot of hard work for the few traders who are going to do well consistently over time. You either need to build up an expert understanding of fundamental analysis and what drives the market (expert, not just good guesses) or you need to become an expert at technical analysis or price action.

You need some kind of a rule which drives your trading decisions, and you need to have some understanding of why it works, and you need to prove that it works on historical data. Backtesting a method is easy to do by downloading old charts of whatever asset you’re trading and going back in time on the charts.

If you can find or invent a reliable trading method, test it thoroughly, and then apply your knowledge to live trading with discipline, you may be able to do well trading binary options. You might also find that the same skills serve you better in another market; it’s all a question of your bankroll, your trading personality and other specifics.

Binary Options Secrets and similar scams won’t help you, though—they’ll only trick you into blowing your account and losing all your money and becoming more desperate than ever.

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Make sure that you also select a reputable broker if you decide to trade binary options—some brokers are also scammers.

A good choice would be a broker like Banc De Binary which provides you with trading resources, a demo account, and other useful tools and techniques is usually your best choice. Always do your research and make up your own mind, but hopefully that gives you a good place to get started with your search.