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Trading Binary Options Over Other Methods

Why should you start trading binary options? There are many reasons why this type of trading has become so popular so quickly. Looking past the hype is important. Instead, you should focus on the differences between binary options and their biggest counterpart in the world of traditional trading: day trading. There are two major types of assets you can day trade with: stocks and currencies. Both of these present difficulties for common individual traders looking to break into the industry. Binary options help to eliminate these barriers to entry.

Let’s look at stocks first. If you are interested in day trading stocks, first, it is necessary to have a margin account. You also need to have a large amount of money in that account; $25,000, in fact. For the average trader, this is just not realistic. With binary options, you can alleviate this concern. Many brokers have a minimum deposit of around $200 to $500, allowing traders of more modest intentions to easily enter the marketplace. With binary options, you can still use stocks to base your trading strategy around, you just don’t need to worry about the federal requirements that enslave a pattern day trader.

With currencies, you don’t need as much money to enter the marketplace as you do when day trading stocks. Still, unless you use a huge amount of leverage, your gains will be very small. Many Forex brokers offer leverage as high as 400 times your original trading amount, but this can easily lead to big losses if your account is underfunded. In fact, even if a trade were to be profitable long term, if you are using a large amount of leverage and the trade dipped just a little bit out of your favor, the broker might terminate the trade instantly and you would be responsible for the inflated amount lost. This is an extreme example, of course, but it could become a reality when using more leverage than what is safe for you.

Methods of TradingWhatever your financial goals are when it comes to short term trading, binary options present a simple and profitable solution. This isn’t to say that everyone will be successful here, or that binary options are easy. The fact is that they are just as difficult to trade as other methods of trading might be. Still, they are more easily accessible to your average everyday trader. With smaller barriers to entry, binary options make big short term profits a possibility for traders that wouldn’t be able to do otherwise.

Finally, with binary options, you have a much more solidified ability to predict your profits and losses. All of these amounts are fixed in place and agreed upon beforehand. This makes your financial planning a lot easier to account for. No longer are you faced with uncertainty about when to enter and exit a position as all of these things are carefully plotted out and acknowledged prior to entry. Binary options might not be easy to master, but they are easy to gain access to and easy to plan an overall strategy for.

Stock TradingTrading binary options is definitely not for everyone, but if you are looking for a more manageable way to enter the day trading market, binaries might be just what you are looking for. They are much cheaper to take advantage of in regards to Forex or stock trading, and they have a lower unknown risk factor. Binary Trading is difficult—there’s no “easy” trade out there in any market after all—but if you are looking for a fast paced and exciting way to start seeing profits roll in on a daily basis, they can be very lucrative.

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