I am of opinion that both carry the same risk given an intelligent approach and handling of the new trading instruments and possibillities that allow u to reach positions without taking drawdowns or risking stop loss due to draw down just before a up/down momentum...
This is my reply to a thread wether binary is gambling or not
Well i have been trying to succesfully trade binary now for a year or so, i have lost in total around 1.500€ spreaded out over different accounts. The only one i put to blame for that loss is me, myself and i.
I had live accounts up to 6.000€ that sprouted out of a single 500€ deposit growing in a week or three- four and sometimes even in a matter of days. But my greedyness and lack of discipline in money management and most of all thinking i could trade at any given time regardless the hour and market condition made me blow my whole account every single time.
Is it betting? Yes ! But... its an equal bet and in my eyes a lesser bet % risk as opening a position of the same amount u would do in binary then in forex or any other market stocks indice.. u take a call, long or a short put. U have exactly the same choices with exactly the same parameters to tweek then on forex.
If you dont believe me then keep on reading...
So if u argue about the fact that no one can forecast the market direction/position in time to come
...then my question to all the hardcore forex traders that refuse to study in the new oportunities this instruments give us to play the market....
think deeper about why woud u place those positions in any other market whilst calling options betting and your game 'speculating' or trading... remember u admit.. forex/stock market ... no one can 100% correct predict its outcome.
U forex traders that point fingers to the binary options are as big of a gamblers as the ones u assumingly point your fingers too. To this excent that most of the forex traders nowadays simply rely on signals and EA's wich are all very unpredictable in behaviour + u need constant monitoring, and instead of putting the decsion to take a trade or not in your own hands, u put responsability on the machine afterwards. So what where you betting on while installing that indicator or EA? Or better said hoping/believing in? A robot that trades for u? everyone would be millionaire..
Nevertheless currency ecxhange and stock investments have been around from the moment the first roads or sea routes connected the ancient world. Spreads, shorting and options followed in the years after, tools created to allow outsiders to 'speculate' on the markets in any given direction. Speculating itselve is allready a form of 'gambling' but phrased in an intelligent way. Now let me explain u.. in binary you can always ( with a good broker ) 'open trades' longer then 5min and with a longer expiry time those positions can be resold to the market at any given time ex. the last 6-7 minutes before expiry.
Meaning u can 'speculate' in exactly the same way as a classic forex trade,
1. u decide the entry point. oR when u enter the market.
2. u decide the stop loss and in the binary trade, the the stop loss simply is the amount of your 'bet',
unless u do an insured trade for 5-30% incase of OTM. But...
... u dont need more money then your initial bet to cover eventual drawdown while 'speculating' on a reverese !!
... u know exactly what u can loose or win and most important of all the re-sell before expiry to the market is
3. u decide when u take profit and execute its close at any given momentum and not 3-6 pips away from current position as in forex... and why would u always aim for the 80%-100% return on a binary option trade?
4 If u trade wise, u do not await the expiry time but u 'take ur profit once u have 50%-60-70% and u dont feel it going further up or down anymore.
...and for the record.. 80-90% of the forex 'pips revenues i see in history of traders are not even 10-20% of the risked position, ok.. the risk was covered by a stop loss, but that can be adjusted in the trade to allow further drawdown whilst 'betting' - or should i use 'speculating' on a reverse in the market before u draw down too far too feel good.. is't this an expiry time on itself? The stop loss in forex ? Yes and its the biggest bet on itselve,.. how much will the market go down before you reach your goal position? Thats a bet u cant predict only guess for..
so it can be very well that a minute after opening a forex position the market makes a last reversal movement and rallys down 100 pips and u had a stoploss of 80 !!!
... Well there u have it, u missed out " again " on a perfectly do-able trade because two minutes later it shoots up again , bam to +220 pips and it would v hit ur take profit level... but it didnt.. cause u have put your own expiry time / stop loss , " to secure your BET " let that be clear... based on the amount u were prepared to loose in this "BET"...
So please be honest and without prejudice about unfamiliar trading forms, and explore all new ways of using these trades in existing strategies, to cover losses or as extra tool to make money on exactly the same direction u were already hoping for. Why not make an EA that triggers a long term binary trade based on good analyses up or down with an expiry lets say end of day or till u take profit with your forex posotion.
Why not trigger reverse 1- 2 - 5 minute trades whilst your position is drawing down to cover losses or simply on top of your exisiting position semi or automatically done by the same EA that triggered your trade or by another one u create to monitor the 'actual' ongoing trade, then u start using another time frame to compare the market with, u use the timeframe of the ongoing trade, how fast its going up where it came from, where u predicted it to go etc.. and it calculates 30 sec or 60 sec call or put trades that react on the movement on the market during your ongoing position...im only throwing a few ideas to look into. Why not use end of the day binary trades that are not sensible to drawdown limits to cover a loss trade due to a stop loss... etc.. etc... i think it's time to get creative...