Binary Options Training
According to the Merriam-Webster dictionary, gambling is defined as "to bet on an uncertain outcome". Isn't trading any financial instrument according to this definition gambling? Well, it is if you are just looking at the outcome of one individual trade in isolation. If on the other hand, you are trading a system that has a positive expectancy then the outcome of a large enough number of trades is not uncertain anymore - you will make money!
I would like to offer a different and novel approach to understanding the nature of trading and gambling.
The approach is based on a two prong analysis that looks at both the nature of the "instrument" that you are trading and how you are trading.
- What are you are trading? If there is no system that can be developed that has a positive expectancy, then you are gambling and what you are "trading" is not a viable financial instrument.
- How are you trading? If you trade any financial instrument without a strategy that has a positive expectancy, then you are gambling.
If you take a look, on the surface, at trading binary options through an OTC (over-the-counter) binary options broker, it would appear that you may be gambling. This is because, on the other side of each of your trades, is the broker.
The odds are in the broker's favor. This is because you can only be the buyer of the binary options. You can either buy a put or a call. If you win you will always profit less than what you risked. For example, in the language of most binary options brokers, you can make 80% return if you are right. This means that you will have to risk $100 to make $80 and if you are right 50% of the time, you will have a negative expectancy. The broker, on the other hand, will have a positive expectancy.
The only way that you can make money over time when your reward is less than your risk is ONLY if you are able to develop a system of trading that increases the percentage of winning trades to a point at which you will have a positive expectancy.We highly recommend Binary Options Trading Signals, by joining the trading room you are given the strategy used in to produce the signals. Here are a few other companies that teach you how to trade binary options.
Binary Trading Academy Investoo
To learn other ways I make money in trading and investing, click below.