Whether you know it or not, you gamble every single day. You make decisions you hope will lead to positive results. No matter our best efforts, other factors can affect the outcome. The moment you make a bet, the result is out of your control. The elation of getting proved right can be incredibly alluring. This is partly why sports is a multi-billion dollar industry!
Digitals options are a form of investment which shot up in popularity very quickly and proved to be highly divisive. The big question is whether it is a form of gambling. In this article I will be answering the following questions:
- Is digital options gambling?
- Is digital options a scam?
- Can you make money trading digital options, and if so how?
What are digital options?
In digital options, you predict the movement of a stock or commodity within a given period (expiration time). There is a ‘turbo option’ with a 30 seconds expiration time and that has the highest potential return.
Some trading platforms offer as much as 90%. Generally, the higher the expiration time, the lower the potential return. Unlike ‘traditional’ financial trading options, you have limited time to make a decision.
Top binary options traders use advanced techniques to increase the probability of success. They make data-backed decisions – more on that later.
In a world of increasing wealth inequality, digital options are attractive because they seem so simple. And with such high returns, a good trader can make a lot of money very quickly. This has similarities to the world of gambling. There is a popular dream among gamblers of visiting Vegas and leaving as a multi-millionaire. Highly unlikely, but a dream none the less!
Notably, highly intelligent people working in the world of finance sometimes make wrong decisions. They are doing exactly what digital options traders do, which is to make a prediction. The hope is to win more trades than you lose. Unlike the stock market, you need little capital in order to trade digital options.
Minimum deposits are as a low as $10, and most platforms offer a demo account. One of the issues with digital options is that it is often marketed as a sure-fire way to make money. However, this is rarely the case.
Why most traders fail
Over 80% of people who trade digital options fail to make a profit. The percentage of losing traders can be found on the homepage of legitimate digital options platforms. Data isn’t available for those who make 5 figures, 6 figures, etc., but it is fair to say that it is likely to be very small.
Much like gambling, you should always risk what you are willing to lose when trading digital options. This is because, despite your best efforts, unexpected factors can come into play. The best digital options traders are obsessed with data. They don’t ‘guess’.
This is because guessing isn’t a good long term strategy. You might get lucky and win a few trades, but over time you will lose money. Knowing when to trade is as important as knowing what to trade on.
The best digital options traders look for the best time to trade. This level of patience and focus is rare. As a result, most people who trade digital options lose money.
Another trait of top traders is the ability to take emotions out of the picture. They don’t think about the previous results of the trading session. They simply make decisions based on the trading opportunity in front of them. The moment you become frustrated or angry, strategy goes out of the window.
Desperation sets in and traders can find themselves chasing losses.
Digital options are banned in the EU and some countries around the world. This is because it has been used as a tool by fraudsters. Saying that there are legitimate platforms out there, here is what to look out for:
Legitimate trading platforms
1) A crucial sign of a legitimate trading platform is the option of quickly withdrawing your winnings in multiple ways. This also helps to leave a paper trail. On the other hand, fraudulent platforms tend only to offer withdrawal via cryptocurrency.
2) You should never feel compelled to invest more money. It is your money; therefore, you should feel comfortable investing as little or as much as you want.
3) Look at how the platform markets itself. Do they emphasize luxury, cars and mansions more than educating customers on how to trade? If there is more emphasis on materialism, this is a sign of deceptiveness. Trading digital options isn’t a guaranteed path to wealth much like gambling isn’t.
Digital options – trading or gambling?
To conclude, it is possible to become rich trading digital options; however, it is unlikely to happen overnight. It would be best if you learned the different strategies, and factors which affect the financial market. You will also need to practice a lot. Commitment and perseverance are the secret ingredients of successful gamblers and trader.