Lately, I've heard a lot of people telling that Binary Trading is gambling. Is that so ?
Well, let's see...
Forex vs Binary Trading
Forex
You must have already heard about Forex, the market in which different currencies are traded. It's a very large market with around 3 trillions of dollars traded per day.
You buy an asset ( currency ) at a certain value and then sell it at a higher value. That's the main idea of Forex. If everything goes well, you earn some money, otherwise you loose some, depending on when you decide to sell.
The problems come when you're talking about leverage, commissions, the money you need to start and stuff like this, but I'll wrote another article on this subject.
Binary Trading
On the other hand we have Binary Trading, a more approachable way of trading if you ask me. It's not safer, but more approachable than Forex.
To make it more simpler to understand let's say we have the EUR/USD asset at a value of 1.138500. You place a CALL trade on that, with a time period of 5 minutes. After 5 minutes the value is 1.138538, so you won, because it's higher than 1.138500.
So, is it GAMBLING ?
In my opinion, Roulette and Slot Machines is gambling, because no skills are involved in your prediction. You just place a bet on something and hope for a win.
Binary Options can be gambling if you treat it like that. If you don't know anything about technical analysis, market events, the opening & closing of different markets, then you're just gambling on asset's value.
On the other hand, if you're using chart patterns, watch out for the opening of different markets ( especially the London and NY markets if you're trading in EUR/USD, GBP/USD, EUR/GBP & Gold ), watch news and have a good money management, then you can call yourself a winner in a long term trading carrier.
Another important aspect of considering Binary Trading gambling or not is the period on which you trade. If you trade on a '60 seconds' time period, than you're a gambler. There's no way you can predict the price movement in that short time.
Another thing for which Binary Trading is considered gambling by some, is that the return of your investment is less than double. If you trade 10$ you can earn up to 19$, but not 20$. So it's a game of negative payout, but people saying this tend to forget about Forex's leverage and commissions.
All trading has costs associated with it or you would not have brokers to trade with!
Tell me what do you think in the comments section bellow ! Thanks !!!
HAVE A NICE DAY FELLOW STEEMIANS !