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Defined Risk And Misconceptions
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Home > Binary Options Guide, binary options strategy, binary options trading strategy > Binary Options Guide – Defined Risk And Misconceptions

Binary Options Guide – Defined Risk And Misconceptions

October 20th, 2014 Leave a comment Go to comments

Binary Option Trading  is a rather new method of Investment and has been introduced to the public only about five years ago. In many ways this form of investment is competing with other more traditional methods like buying stocks or even a long term trust funds. When I was first introduced to Binary Options trading I was rather surprised that my banker and  his colleagues working along with him,  had no knowledge about the subject, and while thinking of it again, why should they know anything, because binary options trading is done over the internet with companies who received special licences to Trade Binary Options.

One thing he did tell me and that is to  stay away from Binary trading because it is  very risky and it is actually a form of gambling. I must say that over time I realized that there is nothing more further away  from the truth then that. It is however a risky method of investment , but if done wisely with the right binary options trading guide, jumping in to the market is less risky then I thought. Quite Honestly on my first steps I used a robot who guided me on how and when to invest my money. I must add that I had to read quite a lot of binary options reviews and articles in order to avoid any Binary Options Scam, and unfortunately there are many out there.

However the one thing that I did like with regard to binary options trading, is the fact that you can never lose more then the actual money you invested on an option you bought. In other types of investments it is very likely that you can lose much more money then what you actually invested. Let’s say you bought a binary option and the trading is not on your side.  The loss is never more then what you payed for the option you payed money for. It means that there is a  specific risk you take and that is the chance you may lose the money you payed for the option and that is the maximum you can lose. On the other hand if you were in the  Forex market, you could lose much more money then you initial investment.
Let us clarify  this thing a little further. On Binary Options trading you have a defined risk that is named your stop loss.

I think that the defined risk risk is something that makes Binary Options Trading a more secure and manageable form of investment compared to Forex Investments were loses are not defined and in many cases the risk is not lower then in the binary option trade.However I must add that it is also possible to define with some binary options brokers a plan that you may lose only 75% of your initial investment on the option you bought, but you also have to consider the fact you may win a lesser amount of money because you risk less money.With this explanation of main, I hope I manged to blow away one of those misconceptions of what are binary options.


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