Binary options warning 2020 - act risk-conscious

Binary Options Warning 2020: What are the Risks of Options Trading? Important facts in the guide Use knowledge now and act in a risk-conscious manner.

With binary options, higher profits are possible than with most other forms of capital investment. However, consumer protection also strongly warns of the high risk of loss, as there may be high financial losses. Even a loss of the entire investment is possible in the shortest possible time, which is why this form of trading, which is very popular even with beginners, is only suitable to a limited extent for most investors.

We have dealt with the warning about binary options and would like to present to our readers the facts about risk when trading binary options.

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The warning about binary options is justified

Many inexperienced newcomers have already lost money through binary options because they were not sufficiently aware of the risk. Indeed, this is not a safe investment, but a highly speculative form of trading in financial derivatives. Since the course of the courses is determined by many different factors, it cannot be precisely predicted. Even the most experienced analysts can only make a rough forecast of future price developments. This means that in addition to the trades won, losses have to be accepted again and again. These should definitely be included in a good trading strategy. This is the only way to achieve a long-term profit with binary options and to escape the feared total loss.

Binary options warning 2020 - act risk-conscious

Der Binary options trading can be learned in a very short time.

One of the reasons why binary options are particularly interesting for beginners is the simple structure of this financial product. In contrast to trading with other derivatives such as Forex or CFDs, not many decision options are available. In principle, trading in binary options is limited to deciding whether to bet on a rising or falling price within a certain period of time. Without an analysis of the price trends, the chances of winning are at least 50%. Of course, that would mean a loss in the long run, since with the usual payout rates of brokers a little more than half of the trades have to be won in order to be able to book a profit. Fortunately, a good chart analysis can increase the chances of winning. However, there are also limits: A clear prediction of the course of the price is not possible, the increase in chances of winning is only a few percent.

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High profits in a short time are not uncommon

The reason for many new traders to start trading in binary options is the success stories of other traders, those with binary options could make high profits in the shortest possible time. Although it is often claimed that such reports are targeted by the brokers themselves on the Internet in order to promote options trading, which should also be the case occasionally, but there are also many real cases, where a trader has multiplied its capital in record time. However, what is often concealed is that such a success not only requires a good course analysis, but also good luck. Binary options trading is subject to a very high variance, the profits fluctuate very strongly and even with professional traders losses occur again and again.

To really from To be able to speak successful trading should therefore not pay attention to how much money is won in a few days, but above all to how promising the chosen trading strategy is in the longer term , With a little luck, any trader can make big profits. In the long run, luck and luck usually balance. If you want to be successful with binary options in the long run, you cannot avoid learning the technical analysis from scratch and applying in a disciplined manner. Phases with losses will always be part of everyday trading life.

Binary options warning 2020 - act risk-conscious

Unrealistic promises hide the risks

through the many success stories Beginners can easily get the impression on the Internet that they only have to spend a few euros in their hands, learn a certain investment strategy and can soon finance their livelihood from the income from trading. Unfortunately, this is not entirely true, because only very few traders are actually able to make a living from trading binary options and even for this small group of people it is a lot of work, iron discipline and a high risk.

In reality, most beginners lose their first deposit sooner or later because they are with a wrong idea of the financial market and trading risks approached trading. Beginners should therefore question themselves and their own views on trading with binary options and revise their opinion if necessary. Long-term trading with profit is only possible with a realistic consideration of the opportunities and also of the dangers.

Not every trade ends with a profit

Even through a professional analysis of trading prices, the chance of winning for each individual trade can only be increased by a few percent. Therefore, losses are always a part of investing in binary options and should not unsettle the trader too much. It is important that good risk management only uses so much money that it can easily cope with lost trades. Beginners often tend to approach emotionally and are very annoyed when they fail to win a trade. Professionals take this much more relaxed, because with a corresponding trading volume, they happen many times a day. It would be senseless to be upset about this to waste energy and would prevent continuous rational action or at least make it significantly more difficult.

Binary options warning 2020 - act risk-conscious

Options limit losses

There is only one for each trader limited capital available. Even if this turns out to be significantly higher for one than for the other, care should be taken with every sum that this is not completely lost, otherwise the trade must be given up.

The money intended for trading should be strictly considered separately from the other assets of the trader, since this is a so-called risk investment. This should not be planned for other purposes, because loss of this money is not unlikely. Customers should therefore not plan too much money for options trading, but only amounts whose loss would not have a major impact on their own financial situation.

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Since each individual trade has a high probability of losing the entire stake, this should be chosen with care and not too high. Individual losses should not have too much of an impact on the trading account balance. Although the high profit that would be possible through a higher stake attracts, it is important for good risk management that enough trades can be placed to compensate for the feared variance.

Binary options are only suitable for certain people

Binary options are particularly popular with newcomers. But this form of trading is not really suitable for every user. For example, anyone looking for an investment with a secure return is not in good hands with binary options. Because here high profits are possible, but also the total loss can occur and should always be taken into account. Investors who do not want to accept the loss of their invested capital have to look for another option and should avoid binary options. Binary options are also absolutely unsuitable for people who are addicted to gambling or are addicted. Due to the betting nature of trading, just like on slot machines, in sports betting or other games of chance, addictive behavior triggered. The trader then chases the happiness of the trades won and invests more time and money than would be appropriate for his individual circumstances.

Binary options should only be traded by investors who have a certain degree Amount "left" that you would like to use for this risk business. If this amount is lost, it should have no major impact on the situation of the trader.

Binary options warning 2020 - act risk-conscious

Binary options There are also dangers lurking in the choice of broker

Not only must the binary options traders be careful when trading, but also when deciding which of the many available online brokers they want to place their trades with. Unfortunately not all providers are reputable and reports from customers who have been cheated of their money are regularly read. To prevent this from happening, brokers should be preferred who are supervised and regulated by an EU financial authority. Here, on the one hand, significantly stricter security regulations apply than with the so-called off-shore brokers, on the other hand, the brokers cannot escape a legal dispute so easily, should there actually be serious problems, Reputable brokers keep the customers' funds strictly separate from their own assets and use them exclusively for trading. In the event of a insolvency of the broker, the money can be paid out to the customer.

Bonus offers offer additional credit, but do not reduce the trading risk

A frequently mentioned reason for registering with a certain broker is bonus campaigns. Here customers can receive additional credit when making a deposit. The bonus amount is usually depending on the amount of the deposit. The more money is deposited, the more additional bonus credit the customer receives.

Even if it sounds at first tempting to get money for trading from the broker, should Beginners are always aware that the same high trading risk still exists and never deposit more money than they can easily afford, just to receive a higher bonus.

The bonus payments are usually not unconditional gifts. Before a broker bonus can be paid out, wagering requirements must first be met. This means that the customer is effectively forced to generate a certain trading volume with his deposit and the additional bonus money so that he can pay off his account balance Can leave. When converting the bonus credit, it happens to many beginners that not only the bonus, but also the amount originally paid is lost during trading. A broker bonus is strictly speaking not a gift that is safe for the trader when making a deposit, but must first be earned by trading. Even with bonus offers, the binary options warning about total loss should never be ignored.

Conclusion: The binary options warning should be taken very seriously

Even if binary options attract with high profits, responsible traders must never ignore the very high risk. With won trades profits of up to 90% are actually achieved, with lost trades the entire amount used for this trade is lost. In this way, large sums can be lost within a very short time and some traders have already ruined themselves financially. To be able to trade at least relatively safely with binary options, traders must therefore have good risk management. For individual trades only small parts of the available balance should be used in order to be able to effectively cushion losses. In addition, all deposits should only be made to a broker with money that is not planned for other things. Those who only use capital, the loss of which they can easily cope with, can act more relaxed, as a result of which better and less emotional decisions can usually be made.

Especially the newcomers should not make a mistake blind unrealistic promises of brokers or other people. With all providers, trading with binary options is associated with a high risk and a total loss should be planned in at any time. In addition, the GTC of the broker apply, which should be read carefully before registering. Especially with bonus offers, there are often conditions, which cannot be found at first glance.

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