Could you make a dealer?
It’s a question many might ask themselves but not have the courage or confidence to give it a try. In fact there must be many a top trader lurking under cover- its often been suggested that dealers are born not made. While I don’t believe it can be as straight forward as that, I do know that some do possess the character and mentality that might make them a trader- and it could make them a very good one. When I employed youngsters in the dealing room it was those that showed almost instinctive ability that in time developed them from a trainee to an accomplished dealer. And hard work of course, but my point is that you may well be hiding that instinctive ability within you.
So why would a bread and butter old fashioned trader like myself recommend starting with Binary Options?
First of all they are derivatives which I understand very well and trade. Don’t let that term frighten you, Binary options make life as simple and straight forward as dealing could be. They could give you the confidence to move to a full trading account with far bigger potential gains.
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These are some of the advantages
- You decide which asset or currency you want to trade.
- You decide whether you think it will go up or down
- You decide on the time frame
- You decide the strike price. Some brokers will offer different strike prices but generally speaking trades are done ‘ at the money’ i.e. you deal at the current market price ( no bid offer spread )
- If you are right when the contract matures you get paid out. It matters not by how much you are right just that you are right, you get the same payout regardless
- If you are wrong you just lose your stake and that can be a as small as you like to start off .
- You don’t have to monitor your position, set stop losses or sweat over random moves between opening and maturity of your position.
- All brokers will pay out less than your stake when you win, taking it all when you lose. That’s their margin and I don’t have a problem with that, but you need to understand the mechanics of the deal.
- There is a time limit and as we know, time passes quickly. Be prepared to kick yourself if your losing trade would have been profitable the next day and maybe even the following minute. The same does apply the other way around though. Remember you are dealing for a specific time on a specific day.
A bit of both.
- There is no gearing of positions.i.e You can only commit to trade the balance that you hold on your account. This means unlike traditional forex brokers where you can sometimes trade 100 or up to 200 times your deposit you can’t with Binary Options. ( e.g. a $ 1000 deposit in Binary options means you could take a maximum position of $ 1000. In traditional forex trading you might be able to gear up to $200,000 )
- Now this could be an advantage to some a disadvantage to others. I guarantee though if you turn out to be a good trader, just plain lucky or both, that you will want to try the real thing and get a decent gearing. Personally I think gearings of 100 or 200 are crazy. You can get wiped out in a heartbeat almost, 20/50 would be my suggestion: start low. We’ve even seen a gearing of 400 offered. Madness- your account will be wiped out before yo know it.
Please remember US citizens get their own rules on which brokers they can and cannot deal with so our listed sites are not for you.
- It pains me a bit to say it but anyone who gambles be it on soccer, the horses, football or baseball will find it easy and straight forward to grasp. However even if you don’t, the principal is easy to learn and knowledgeable sales staff will help you all the way. It’s in their interest to get you winning and trading more.
- Of course this might make it seem like gambling which I have no shame in saying it is ( speculation / gambling see definition below ). Let’s be clear if you are hedging some currency , equity or bond risk that you have via these binary options you are not as such gambling. If not you can dress it as you wish, but you are taking a punt. Maybe an educated thought out punt but when all is said and done that’s what it is. I do it most days in the forex markets. I do hedge my income stream from time to time ( as it’s in a different currency). I also invest and hedge in equities and bonds. However, I take risk in forex markets particularly where I have no reason too other than I have a view and I’m trying to make some money.
Definition according to Dictionary.com
Speculation…. Engagement in business transactions involving considerable risk but offering the chance of large gains especially trading commodities, stocks etc. ..in the hope of profit
Gambling…. Betting on an uncertain outcome of a contest. To take risk in the hope of gaining an advantage or benefit.
Not much difference I would suggest.
So if you want to learn more about opening a trial or trading account click here