Nowadays, more and more traders are exploring the world of Binary Options trading. This type of trading usually ends with ‘cash/ assets’ or ‘nothing’. This approach has often led the nuevo traders to be sceptic about trading Binary Options. The questionnaire ranges from profitability in trading Binary Options to whether it is akin to gambling. But, trading Binary Options is not really like gambling as there are many techniques that one can take advantage of to gain more profits. The trader has to basically assume whether the price of an underlying asset will increase or decrease within a predetermined set of time. If the prediction of the trader matches the outcome then, the trader wins the option or else loses the capital invested at the time of opening a position.
The market condition is prevalently mapped on the trading charts like the candlestick chart, trendline chart and Heikin Ashi chart. These instruments of technical analysis are also applied by the employees of investment banks. The trading charts are used to analyse the market conditions and also ‘predict’ the movement of the price. The existence of the technical charts does not necessarily mean that there is no risk in Binary Options trading. After all, trading cryptocurrencies or Forex/CFD also involves taking some risks. A trader has to have a considerable amount of knowledge regarding the market and trading to trade the options and understand the charts. Gambling, unlike trading Binary Options, is believed to involve a lot of luck.
Trading Binary Options, a Financial Investment
Trading Binary Options has turned out to be a great way to accumulate capital, a financial investment which assures remunerative and returns. Furthermore, the traders do not have to wait longer periods when trading the binaries. Another advantage is that there are fixed returns. It is a great way for the neophyte traders with limited financial skills and knowledge to earn money. It is more of an intuitive way of trading.
Binary Options is often considered to be the most flexible of all trades. The underlying asset can be traded with financial instruments like indices, currency pairs, commodities and so on. The traders can easily access these financial instruments and can trade at their convenience, even after office hours. Anyone can profit from the stock market in all market situations when trading Binary Options.
Gambling, on the other hand, can in no way be called a financial investment. The outcome of playing casino games like roulette is solely dependent on the system settings. The returns are dependent on how profitable an event is. Moreover, the casino house has more edge than even a seasoned gambler. Sports betting are also a type of gambling. Here, everything is ‘in the hands’ of the players. The assumption made by the person who is betting on the game is not based on anything like the Binary Options trading charts. The returns from sports betting if observed carefully are an absolute uncertainty.
Trading Binary Options and Gambling
The veteran Binary Options traders have been disputing on the issue ever since the question was raised. Till now, the article talked against the concept. But, is guessing or assuming in some way not a form of gambling? Even then Binary Options trading cannot be termed as ‘sheer gambling’ as it comes with well-planned strategies and some degree of technical analysis is required to play the market.
60 second expiries: In this case, the ‘betting’ duration lasts only for 60 seconds. The trader has to guess whether the price of an underlying asset will rise or fall within this short time period. In the world of Binary Options trading, a lot can happen within one minute, especially if the market is highly volatile at the time. Although for many people it may seem like just playing on the slot machine.
Some of the less popular Binary Options brokers may not provide the trading charts, news of the market move or other technical tools. To people who are using these brokerage websites, trading Binary Options will quite obviously seem like gambling in a casino. Trading Binary Options without analysis of the movement of price (market condition) thus resembles playing the roulette table.
The reason for the ability of a person (who do not know much about trading) to trade Binary Options is also one of the reasons behind it being considered as a form of gambling. This type of traders usually trade Binary Options without doing much research and often by randomly choosing a trading strategy.
In conclusion, this debate topic has two sides, like a coin. Many people consider Binary Options as a fun, alternative way to earn more money during their pastime. Apart from them, the traders take Binary Options trading quite seriously and using different types of trading strategies and trading signals.