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How do I make money trading binary options?


Jane Goodwin
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Binary options trading has a simplistic feel. The fact that maximum profits/losses are determined at time of trade differentiates this type of trading from other markets where gains/losses can be much more varied in nature. There are some interesting trading strategies that embrace the different nature of trading and these make good reading in their own right but there is some doubt in the trading community about how effective they would be at actually making long-term gains. It should be also be pointed out that you may want to treat the subject as a research project rather than a way to make a living as binary options have come under some scrutiny and are now not permitted to EU domiciled retail investors. As mentioned, binary options trading has something of a ‘casino’ feel to it. Not surprisingly the Martingale principle is therefore proposed by some as a means of making money. This theory works on the basis that any losses on one particular trade can be recovered if the next trade is at a size that (if a winning trade) would cover the losses of the first. As long as the successful outcome has a probability of at least 50% and the trader can afford to keep increasing the size of their stake then the theory has legs. When individual winning trades occur those profits are posted to the capital account. There is of course the fact that the longest single color winning streak in a US casino was red winning 32 times in 1943, and whilst intuitively it feels unlikely that such a run could occur, statistically anything is possible. If you are looking to enter the world of binary trading then one good start would be to use a reputable broker. The style of trading is ‘different’ so even if you’ve traded other markets before it’s a good idea to put a demo account through its paces. Then, as with other forms of trading start in small sizes, have a strategy and continuously assess your own performance.
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