Binary options trading is the trendiest thing in trading right now, but as with anything that is relatively new and widely advertised as a way to make money quickly, you should ask yourself whether trading binary options is safe. Binary options trading involves taking “all or nothing” positions where you try to determine what price will do for a commodity, index, stock, or currency. If you win your investment, you’ll make money, and if you lose, you’ll lose money.
No market is completely predictable. Binary options has a major draw because of its simplicity. It is easy for people to understand the idea behind binary options trading. As such, it does tend to draw gamblers who don’t have the time or patience to try to understand the complex workings of financial markets, and who aren’t going to invest time and energy into developing trading techniques that are consistently profitable. Just because binary options trading tends to draw people who engage in these gambling behaviors doesn’t mean everyone who trades binary options does so in an uninformed way. It’s possible to plan and test your trades with binary options, just as it’s possible to do so with traditional options or other types of trading.
Is Binary Options Trading Safe Or Not?
So is binary options trading “safe?” That all depends on how you define the word. If you define it as something which is risk-free, the answer is no. Of course binary options trading entails risk. Even if you do have a great method, there is absolutely nothing guaranteeing future performance, whatever the history of the method. If you have a reliable method, however, you have good odds of succeeding, so if you trade responsibly, you can deal in calculated risk instead of blind risk. Every business entails some degree of calculated risk, and trading is no different. In that sense, how “safe” it is simply depends on you and how you approach your trading.
The least“safe” thing you can do in regards to your money is to invest it without acknowledging your risks. It’s one thing to gamble blindly for entertainment, knowing you’re likely to lose—or at the polar opposite end of the scale, to risk your money with caution and care, following a method you know to be reliable (while still acknowledging risk). It’s quite another to think that there is no risk and that you are a genius with a foolproof method—that is the fastest way to lose money. Acknowledge your risk and mitigate it.
Check Out Your Brokers
The other aspect of this question involves the nature of the brokers you choose to invest your money with. Binary options trading has only recently become a booming international industry that caters to retail traders around the world. This being the case, many of the brokers who offer their services are not yet regulated. Some brokers have no intention of becoming regulated, though many are in the process of undergoing regulation. Regulation is definitely a major plus when it comes to trusting the safety of a broker, but so is reputation. Some brokers we like include Banc De Binary, TradeRush and 24Option. You can find more information about these brokers on our website.