Why Binary Options Trading Fails: Data-Driven Analysis & Personal Experience

 

The Choice: $1000 or $900?

You have a choice: do you want 1000 dollars or 900 dollars? Now, imagine you are a new trader who came across two trading brokers…

The Offer from Two Brokers

The first broker says, "Hey, come here! If you invest 1000 dollars with me, I will give you 1000 dollars profit." You say that’s great! …
You scratch your head and say, "Are you crazy? That doesn't make any sense!"

Millions Choose the Second Broker: Enter Binary Options

If you thought the second broker didn’t make any sense, then you are right! But what if I told you tens of millions of people happily choose the second broker? Crazy, right?

Why Do Regulatory Authorities Warn Against Binary Options?

Unfortunately, that’s Binary Options trading in a nutshell. It’s so crazy that the Securities and Exchange Commission of the United States…

My Introduction to Binary Options

Unfortunately, many years ago, when I was new to trading, I was looking for brokers who provided good demo trading accounts for free…

How Binary Options Work

In normal trading, you have a chart like Euro USD, for example. If you think the price will go up in the future…
But Binary Options doesn’t work like that. It’s much scarier.

The Binary Options Time Limit

Remember the long trade example I just gave? Well, I left one important thing out of the explanation: the time limit…

The Probability Problem in Binary Options

In normal trading, if you randomly take a long trade and set the profit and stop loss at the same distance, your chances of winning are fifty-fifty…

Testing a High Win Rate Strategy in Binary Options

Now I know what some of you are probably thinking. This test was with a 50% win rate. If we use a high win rate strategy, Binary Options should work, right? Let’s find out…

Testing Binary Options in Good vs. Bad Markets

Let’s see what happens to normal trading and Binary Options trading when the market switches from good to bad…

The Reality of Trading in Different Market Conditions

If you’re thinking that you will avoid the bad market in Binary Options, resulting in profits only, what are you going to do in the slow and average markets?

Testing Popular Binary Options Strategies

But then someone might ask, "What happens if I test a strategy specifically designed for Binary Options?" Okay! Let’s do that!

The Issue with Parabolic SAR Strategy

The 100% win rate strategy shared in one of the videos I found is the basic parabolic SAR indicator strategy. You enter a long trade…

Another Test: The MACD Zero Lag Strategy

I ran another test, but this time, I selected one of the worst trading strategies I have ever tested in the normal markets…

The Problem with Break-Even Win Rates

If you are finding it difficult to keep up with all these different break-even win rates and other terms, it’s normal…

Manipulation and Fraud in Binary Options

I’m not going to go into the ‘some Binary Options brokers not letting customers withdraw their profits’ side because I personally haven’t experienced anything like that…

Why Binary Options Ads Were Everywhere

The thing that annoyed me was that many of these Binary Options brokers were working in a sort of grey area…

In Theory vs. In Reality

In theory, Binary Options work if you have a very high win rate strategy. But in reality, those kinds of strategies are basically non-existent…

Conclusion: Why I Quit Binary Options

I stopped trading Binary Options after realizing all this. It’s better not to blindly use these high-risk financial instruments…