“Trade” is being a bit generous. In reality you are just gambling.
Can you make money from binary options? Well you can in the same sense you might be able to make money in a casino. But it’s definitely not a good long term strategy and in the end the house is going to win.
It’s sad to see the recent trend in sites promoting binary options as some kind of “investment”, lending credibility to what I believe are outright scams.
What Are Binary Options
The concept is simple, and that’s probably what attracts so many people. You place a bet whether you think the stock or other financial product, will go up or down in value over a set amount of time. This timeframe is usually quite short like 2 minutes.
The Simple Truth about why you won’t make money
No one, not even professional traders can predict the market that accurately. If you think you can look at a chart and see some kind of trend as to how the market will perform over the next few minutes, you are completely kidding yourself. Statistically you will eventually lose.
Mathematically you will also lose out. If you actually do the maths, and I doubt anyone betting on binary options has, you need to be correct 55% of the time for their to be a neutral outcome. Meaning the house is going to win more often than not! That sounds exactly like a casino.
It’s all about churn and burn
All these sites telling you that you can make millions using their “secret method” are fooling you. They just want you to sign up and deposit. You will absolutely lose your money. But they don’t care. They are already looking for more people to churn through.
What are the Alternatives?
I’ve talked about many of the alternatives on my blog. You can try a more traditional broker, where you actually trading a financial product. You could try copytrading which is similar to a broker but you are using the wisdom of the crowds to help reduce risk. Or you could try something that has even less risk like Acorns, which uses sensible investment practices.
But please, stay away from binary options. I don’t want you to lose money and I don’t want you to become disenchanted with online trading. Because there is a lot of online trading which really does work and can be profitable.
Have you lost money with Binary options. Let me know in the comments.