Is Trading With Binary Options Gambling?

By | February 25, 2016

Is trading with binary options gamblingThere is a lot of controversy surrounding binary options trading. Since it began last decade people have been asking the question that is in the title of this article. Is trading with binary options gambling? It is hard to make a unanimous answer to that question. Traders who are trading with binary options are trying to make predictions of future market movements which can be seen as gambling, since you can never know what will happen next. But the same could be said about investors in real estate, since they also can’t be perfectly sure what will happen with prices of their assets.

Mostly trading with binary options is compared with sport betting and casino games. There are huge similarities between sports betting and trading with binary options. Both include predicting future events or trends that are quite uncertain at the moment of making decision about trade or bet. In both cases we can say that those who are better informed, involved and experienced can achieve better results. E.g. if you are following sports team for a longer period of time you know it strengths and weaknesses, you can know when important players are injured or when there are problems with the team spirit. Same rules can be applied to certain market, e.g. if trader is trading oil for longer period he can recognize patterns and exploit them to make a profitable trades. There is one important difference though… When it comes to sports betting you are betting against the house, in binary options trading, you are trying to beat the market.

Casino games are pure gambling. Either playing roulette or some other game it is a game of risk that has unknown outcome, but in the long run house is always winning. In binary options there is no house. Brokers can take the role of the house from time to time, but it is usually trader against the market. By following well laid strategy and being patient and careful trader can achieve long run of winning trades. It is highly unlikely to have perfect strike, but good traders can win 7 out of 10 trades.

A third, binary option trading is often compared with poker games. There are many similarities and one can say that binary options trading is very similar to long poker games with many hands being dealt. A skilled binary options trader has much better chances of succeeding than the newcomer, same works in poker. Like in poker newcomers can have their beginners luck in first few trades but in long term if trader doesn’t learn from previous trades newcomer will end up being a loser.

Summary

A binary option trading has certain similarities with gambling, but there are some important differences. Binary options trading can be learnt if one takes enough time to learn all about technical and fundamental analysis. Traders need to know basic chart patterns and indicator tools so they can start gaining experience in the market. If done properly binary options trading can result 70-80% of trading being success.