12 Binary Options Myths Busted
Binary options myths are probably never going to be debunked up on TV. I mean, have you ever watched that show “Myth Busters” and wondered if they’ll ever discuss binary options myths? Probably not! I, for one, have always wondered what it takes for them to pick out myths for the show. Typically, the myth chosen for the show is something that seems too good to be true, or almost magical, as well as something people are genuinely curious about. The concept that making money trading binary options is a myth is one that we’ll take our own shot at busting in this article.
12 Binary Options Myths
- You can’t profit from binary options trading
- People make money trading binary options from dumb luck
- Binary options is a scam
- Binary options brokers don’t want you to profit
- Technical analysis doesn’t work for binary options trading
- Brokers exaggerate high return on investment
- Risk management is impossible
- Short time frames don’t allow for change in trade prices
- The website has too much control over the traded assets
- All traders know what they’re doing
- Demo trading accounts provide fake results
- Binary options brokers have terrible customer service
There are many things in history that have become legendary stories or wives tales, with no proof available to prove their occurrence. Therefore, its difficult to decipher myths from truths. The difference now, however, is that we tend to record everything in some manner, and binary options myths are one of those things that can be proven by facts.
Let’s take a look at 12 things people think are binary options myths and bust them!
Binary Options Myths #1: You Can’t Profit from Binary Options Trading
Many investors believe that only the binary options brokers make money from trading. This is one of the easier binary options myths to bust by simply looking at supply and demand charts since binary options trading began. In 2008, there were only 8 binary options websites. In contrast, today when you do an exact match search (using quotes) for “binary options website” on Google you will be yielded with a whopping 337,000 results! In the argument of supply and demand, these binary options websites wouldn’t exist if there wasn’t a high demand from investors. Additionally, demand wouldn’t exist if there weren’t investors turning a profit from these trading activities.
Binary Options Myths #2: People Make Money Trading Binary Options From Dumb Luck
There is nothing lucky about trading investments, and this is one of the binary options myths that the notion holds true for as well. Although there is always an element of luck in any sort of trading, traders who continually profit from trading binary options only do so with hard work. To consistently profit at binary options trading, an investor must constantly be analyzing technical analysis charts, keeping up on market news, and become aware of upcoming economic situations. Successful binary options traders are those who profit consistently, and use all the learning tools a website has available to trade sensibly. This binary options myth is busted simply by the fact that an educated investor can and will outperform an uneducated one.
Binary Options Myths #3: Binary Options is a Scam
There are many people who consider binary options a scam. However, most of the people touting this binary options myth have never even traded them. How can someone, with no experience trading, assert this binary options myth? In our opinion, they can’t, and those who do make such accusations carry no weight to their claims. The people who binary options is a myth make that claim that the short time frames are the reason they’re a scam. In essence, however, its these short time frames that actually favor the investor in that great traders can take full advantage of information quickly, as opposed to the longer time frames that ordinary stocks and assets are traded on.
Binary Options Myths #4: Binary Options Brokers Don’t Want You to Profit
Now this binary options myth is just plain silly. It has been said that binary options brokers just want to take your money and leave you broke. Why a binary options broker would want you to do this is beyond me, as it would leave them with poor binary options reviews and no customers. Binary options brokers don’t actually make a lot of money off the trading itself. They want you happy and profiting on their website because they make most of their money off of the services and fees collected. We’ve now busted another one of the binary options myths!
Binary Options Myths #5: Technical Analysis Doesn’t Work for Binary Options Trading
The next of our binary options myths to bust is that traditional signals and chart analysis don’t play a role in determining investors’ success in trading binary options assets. That is hardly the case and most successful binary options traders will attest to the fact that good analysis is essential if you are to profit from these trades. Binary options trade on the very same assets that are trading seen on the stock market. The people claiming that you would be trading fake stocks is an absolute binary options myth. To bust this myth yourself, sign up for a binary options demo account and you’ll quickly see that you’re able to trade regular assets such as the following:
- AAPL
- GOOGL
- FB
- WTI
- DOW
Binary options traders can trade many more assets than this, and all of them are traded on regular markets across the world. Knowing key dates for releases of information will increase your chances of profiting, and therefore busting, from this binary options myth.
Binary Options Myths #6: Brokers Exaggerate High Return On Investment
Many people discussing binary options trading myths in general claim that the ROI offered by many brokers is highly exaggerated. This couldn’t be farther from the truth! Just like betting on sports, trade ROI follows its associated inherent risk. Betting a single team to win is going to yield results more often than betting a 6-team parlay just as when trading a ladder option is going to yield results less often than a one-touch option. However, the return on investment from the ladder trade is substantially higher; we’ve seen returns higher than 1,250% of the original investment. There are many other binary option trading features that make high returns on investment a very real possibility.
Binary Options Myths #7: Risk Management is Impossible
This is one of the binary options myths that can lead you astray if you listen to the rumors people are spreading. Before making a trade, the trading platform tells you exactly how much you stand to profit in the case that you are correct. This feature alone allows you manage the risk of your account balance. In addition to that, there are several features available to you that allow you to hedge your risk:
- Trade the opposite direction midway through a binary options trade.
- Trade with a binary options broker that allows an early close, rollover, or other risk management features.
To make the most money out of your investment, you need to trade options. If risk aversion is important to you, then you should consider trading stocks, but don’t forget that those have trading fees as high as $19.95 for each and every trade. We feel that the availability of these risk managing features is a definite bust to this binary options myth.
Binary Options Myths #8: Short Time Frames Don’t Allow for Change in Trade Prices
Sure, the prices of assets may not change very much during a short period of time. However, this binary option myth lacks support as there are many things that can occur in the economy that cause an almost instantaneous change in prices. Here are some examples:
- Company announces its earnings report
- Talks of war
- Jobs report
- Act of terrorism
- Many other items on the economical calendar
Anyone who trades binary options thinking that assets do not change much in short time frames is in for a rude shock. Asset trends can and do change in a matter of seconds, busting this binary options myth.
Binary Options Myths #9: The Website Has Too Much Control Over the Traded Assets
This is one of the easiest binary options myths to bust. Unbeknownst to the nay sayers, the best binary options brokers pull their real-time data directly from major outlet feeds such as the one provided by Reuters. To bust this binary options myth, simply look on the binary options broker’s website and find out which service they use to provide them with the real-time trading data. You might be surprised.
Binary Options Myths #10: All Traders Know What They’re Doing
Being a successful binary options trader is like everything else in life. To be successful requires requires patience, determination, and discipline. If a trader fails in the market simply because he or she does not know how to trade, it is not the fault of the binary options website, but their own. There is no excuse to call this a binary options myth when you haven’t taken the time to learn everything there is to know about trading binary options. Most websites provide binary options tools, webinars, demo trading accounts, and many other services & products to educate new traders on how to be successful.
Binary Options Myths #11: Demo Trading Accounts Provide Fake Results
Here is another binary options myth that is very wrong. People claim that the binary options demo trading accounts provide fake results and not the actual results that traders would get from real trading environments. Now I want you to step back and think about this for a second. We mentioned earlier how the data used for binary options trading is licensed from major outlets such as Reuters. It would take a substantial amount of work for the binary options broker to create another system that could fabricate data and manipulate the results given in demo binary options accounts. Therefore, we feel strongly that this binary options myth is debunked.
Binary Options Myths #12: Binary Options Brokers Have Terrible Customer Service
First of all, if you read through our binary options broker reviews, you will notice that we have tested each and every website and their customer service. This is a major element in how we grade the binary options brokers on our site. We certainly hope you don’t ignore our section regarding the binary option broker’s customer service results. Now, onto debunking the last of our binary options myths.
Rumor has it that a lot of binary options brokers have terrible customer service, which may be true, but certainly not for the best binary options brokers (see our reviews). Like any other business, these brokers want to keep their customers satisfied, and therefore do everything in their power to keep their traders happy. Most binary options brokers are extremely responsive and have multiple methods by which they may be contacted, including:
- 24/7 telephone support
- Live chat support
- Email support
Just like many other things in life, binary options are surrounded by many myths, most of which unfortunately scare off potential traders who may have changed their lives. The best way to ascertain whether they are true is try out the trade. So what does fate have in store for you? Are you going to be one of people with scared money, or are you going to use your brain and not fall into these binary options myths?
