is trading binary options similar to gambling?
I consider trading binary options.
Hyperscalper, thanks for your elaborate post!! I hope you don't mind an additional question on the topic.
I have traded some binary options with IG many years ago, but have not traded any recently.
My gut feel has always been that the implied edge, i.e. the implied transaction costs, for binary options are very high. Higher than the typical bid-ask spread and commissions for trading outright instruments.
Are you able to comment on what the typical transaction cost is in those?
Hi flight eagle did you get this?
I consider myself an expert in forex, but a newbie to the binary option world. From what I can see so far its looks pretty legit, and an easy way to make money, but I would pay very close attention to making withdrawls of my money. Put a couple hundred max in and play with it watch all the videos pick the brains of the b/o people on this site and just go for it. Good luck to you flighteagle, 3 in the green. Take care.
Thank you HyperScalper, That's the kind of answer I was looking for for my concerns being a newbie to binaries (even using the slang) now. OK, I'm an expert in TA and analytics, so presumably I should do OK with this.Yes, of course, my friend ! We are here to help...
To be perfectly honest with you, here is MY ADVICE. Do not begin with the NADEX Binary options. You will most likely have a MINIMUM cost for Entry of $25-$30 per Contracts OTM (out of the money), and if you decide to go for ATM (at the money) then you will be forced to risk $50 to win $50. And if you are tempted to go for ITM (in the money) contracts because they SEEM to be a "sure thing"... you can Risk $80 in order for the chance to make $20.
SO.... the bottom line is that you really are forced to commit a larger amount of money on NADEX and so it is only for experienced, and moderately well capitalized traders !!! To get the Odds more in your favor, and reduce your Risked capital, you need Incredibly good Analytics; otherwise those OTM's will be very unlikely to move into the money and you will lose your Risk capital.
I'm not trying to be confusing here, believe me !!!! But NADEX is complex, and generally too expensive for someone starting out.
This is why I'd stay with the $5 type Binary Contracts (non-NADEX) so my Risk is low, even though they offer payouts in the range of 60%-90% of Risked capital.
If you are a European, you are lucky and can join Dukascopy Europe. They offer Binary Options with payouts in the 90% range, and the system are more "solid" than those offered by SpotOptions and other "white labelled" platforms. You can also trade Forex and CFD's etc, and Dukascopy is simply the best.
Dukascopy's Binaries have a Bid/Ask spread. NADEX as well, and it's a fairly wide spread. Most other Binaries just use the MID price, since they are designed simplistically and require less skill. But for you, please just avoid the NADEX for now, and stick with either Dukascopy or other reputable Binary offerings.
For you, then you can keep your Risks LOW and focus more on technique and the precision of your Analytics. I could help you there... But if you jump into NADEX, then I believe you are at Risk of blowing out and becoming disillusioned.
TO ANSWER YOUR QUESTION: I believe Binaries are extremely "Sensitive" and allow for profit extraction with a Minimal movement in Price. However, as I keep saying, Analytics and Precision Entry must be First Class..... So they offer an "Edge" over straight Forex trading, because they Limit both the Maximum Loss and the Maximum Payout. But they offer frequent "opportunity intervals" and that may offset those limitations.... Capiche? LOL Keep asking, others may have advice for you.
I hope this does help you !!
Good Trading !
Thank you HyperScalper, That's the kind of answer I was looking for for my concerns being a newbie to binaries (even using the slang) now. OK, I'm an expert in TA and analytics, so presumably I should do OK with this.
Yeah, man, there are TWO distinct ways to survive in Binaries.
Go for the legitimate NADEX, where more knowledge is required, but you do need a bit more capitalization. After all, the 70% return Binaries are designed for the "gambler" and somebody who can bet $5 time after time.
As you can see, with properly choice of OTM (out of the money) NADEX contracts, you can significantly limit your downside (not as low as $5, but certainly $20) while have a possible return of from 2x up to 9x of your Risk capital.
NOW, you can use Technique alone; but if you "know" the underlying, on which things are based, then you're truly in a business with an "edge" and Risk Control.
What more could a Trader want? Downside risk limitation, but upside significant opportunity to profit, and to scalp.
Good Trading !
I understand this, however isn't it difficult to analyse a security for short-term time frame.. Like who can predict the price of a security going up or down within 5 minutes.. that is similar to flipping a coin
We get it, advertisements are annoying!
But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.