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Most critics of the legitimacy of binary options trading usually cite the risk/reward ratio that traders are exposed to when trading this market. On platforms such as Option.FM, traders can receive returns of up to 91% on trades they place in the market. This is one of the highest returns in the industry. Such a return means that, if a trader places a $100 trade, he stands to gain $91 if he is right. However, if he is wrong, he will lose $100. His risk is essentially greater than his potential reward. This is the reason most critics dismiss binary options as a derivative of gambling.
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However, what the critics fail to acknowledge is the ease of trading binary options as well as the potential to return profits within a quick turnaround time. In binary options, traders will book definite profits if the asset price closes higher or lower (even fractionally) than the strike price. In other market such as forex, the amount of profits will depend on how far away the asset price moves from the strike price. In such a market, traders need to perform more thorough and in depth analysis than in binary options. If the markets are less volatile, traders in such markets will also have worse risk/reward ratios than in the binary options market.
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