Trading has always been given something of a bad name among “ordinary” people. In other words, people like you and me, who don’t work on Wall Street and want to trade on our home computers or our mobiles. And there is no type of trading that suffers more from that bad wrap than intraday trading, the type of trading where you open and close your position within the same market day. Most binary options trades are day trades. Some brokers offer longer expiry times, but they are not typical.
60-second trades are the fastest positions of all, opening and closing in just one minute. You will probably hear a lot of people say that scalping is way too risky, and that 60-second trading is nothing more than gambling. They’ll say that binary options brokers are scammers, operating in the market only to take your money. How valid are these concerns, and where do they come from? I am going to break them down so you can make up your own mind.
Binary Options Trading is “New”
“Retail trading” refers to the kind of trading you do as a private individual at home on your computer. A couple of decades ago, retail trading was not a big industry. The internet has made it very accessible, however, so it has become a big deal in recent years. Binary options trading in particular has only risen to prominence in the past couple of years. Most of the brokers operating opened their doors in 2011 or 2012, though binary options have existed as a trading vehicle for longer than that. People are often afraid of anything that is new. They think, “trading is only for those guys on Wall Street. So this must be a scam.” Click here for potential scams That is a misconception, however, and has no basis in reality.
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Everyone Has a Story
If you start telling other people about your desire to become a binary options trader, you will quickly find out that seemingly everyone you know has a tragic story about the downfall of a friend or family member who lost it all on binary options (or some other type of retail trading). The person telling you the story generally does not know much about it, which you will discover quickly if you ask more questions about the details. It isn’t that there isn’t someone they know who lost it all in binary options trading, it is just that the person telling you the story is not educated enough in what happened to explain to you the real reason for the loss. Which is …
Most Traders are Gamblers
Is trading a form of gambling? Well first, define gambling. If gambling is any activity with a significant element of risk, then you are gambling each day you wake up and head to the office, especially in this economy. If your boss doesn’t like his coffee this morning, you could get canned. Everyone has a story about that too since the recession started. Binary options trading carries risks—like every other activity you can engage in to make money.
Whether or not trading is defined as gambling maybe comes down to the behavior of the trader more than the nature of the activity. If you do not respect the risk involved in binary options trading, then you are a gambler. If you do respect that risk, do what you can to mitigate it, treat your trading as a business, and do research and testing as you would for any real business, then you do not have to trade like a gambler. You can trade like a professional.
Most of those horror stories you hear about someone who “lost it all” boil down to bad trading decisions. They may be about people who traded blindly, without money management rules or a system in place, who quit their day jobs before they were ready or invested all their money in binary options, or who couldn’t manage their time. If you trade irresponsibly, you will join their ranks. But if you follow trading rules, test your trades, and develop a sound plan which works with your schedule, you may well become profitable instead. Click here to learn more about developing a system.
Trading Fast is Tough
60-second options suffer from the “gambling” reputation more than any other type of trading. Why? Because they are tough, plain and simple. The majority of traders are not cut out to trade 60 second binary options. This should not be something you look at as a “weakness.” 60-second trades represent one extreme end of the scale in terms of expiry times. Most people fall in the middle in terms of what they excel at (picture a bell curve). Not as many people are going to want to do position trades where they hold their positions for weeks, and not that many are going to be able to handle the speed and high pressure of trading super fast.
That does not mean that you can’t handle it though. The only way to find out is to start testing trades. You absolutely must open up a demo account to do this live if you want to trade fast, because it is the only way to know if you can handle the speed and still make good trading decisions. One advantage of testing 60-second trades specifically is that even with a demo account you can only hold open for a couple of weeks, you should still find a ton of different options trades you can test out within that relatively short time period, so you can build up a lot of experience before you use real money! Find out which brokers offer demo accounts here.