I hate binary trading – I even go as far as to call binary trading a scam

Now you may be thinking ‘binary trading scam?’ isn’t that going a bit far?

Well the dictionary definition of scam is;

‘A dishonest scheme’

And, I certainly feel that Binary trading is presented in a very dishonest way.

Just look at these messages that  pop up in my Twitter and Facebook inbox

Dishonest!

In this article I’m going to explain to you what binary trading is, why it’s a fool’s game and how dividend investing (the investing I advocate) is different.

Binary trading does one of two things;

Give genuine stock market investors a bad name and make people think that
‘Investing is just like gambling’

OR

Lose people a ton of money through fake ‘fool proof methods’ and ‘millionaire strategies’

So, what is Binary Trading?

Binary trading is (in my opinion) a form of gambling where you bet whether a stock/commodity/currency will go up or down in the next ‘x’ number of seconds.

Instead of making a really long winded takedown based on theory alone I decided to show you a binary trading platform and how it all works in this video;

The maths of Binary Trading

So you heard me say in the video ‘you’d be better off playing roulette’

A bold claim surely, it can’t be true?

Here’s the maths!

Maths never lies

 Sure, you may get lucky and hit a winning streak but the longer you play the more the maths will catch up to you.

What about these ‘proven strategies’ I kept getting told about? 

Simply – they’re a lie.

Think about it – if someone had found a way to beat the stock market by trading binary options

Why would they tell you?

Wouldn’t they be busy making money off their method instead of spending money marketing it?

Simply – these strategies are a ploy to get you betting on their platform so they can make money.

 How do binary platforms make money?

Binary platforms make money from the margin of your bet.

Think about it – If you win, you gain 92% of your stake – the platform takes the other 8%

If you lose, the platform doesn’t share your loss – You take 100% of the loss.

THE PLATFORM NEVER LOSES

Chance and number of clients alone will always secure a certain number of winning bets for the platform.

They simply take 8% or usually more of your winnings.

This doesn’t sound like a fair deal to me!

How is investing any different? Isn’t that all chance and luck too?

A few weeks ago I was sat in the university library studying for some exams.

I hear some chatter from the corner and after hearing the word ‘stock market’ I can’t help but eavesdrop

The conversation went a little bit like this;

‘Yeah mate, to be honest, the stock market it just all luck’

‘I rather put down accas (accumulator bets)’

‘Seriously mate, you should tell X to stop investing, I always see sh*t online about people losing thousands, even their houses’

And here we have the fudging of the lines between trading (especially binary) and investing.

The truth is, binary trading is all luck – real investing isn’t.

The reasons that people often confuse trading and investing is that binary trading companies purposefully smudge the lines between them.

Binary trading companies are very clever, they want to appear as reputable companies that help make wealthy, intelligent people money.

We all strive to be these ‘people’, working from home, trading whilst making a cuppa before picking up  children from football practice.

After all, that’s what the ads show! Reality check: They are all actors.

In reality, the only people on these platforms are;

1.People who want to ‘show off’ and market themselves as high flying traders

2.Vulnerable individuals who have been tricked into signing up

3. Your average ‘bookies’ punter

I can guarantee you that almost no ‘real investors’ with any financial background are on these platforms.

These investors are all in the world of real investing – the buying and accumulation of assets

You can check out my article that sets apart the gambling world of binary options and the world of intelligent investing here – the difference of ‘trading’ and ‘investing’ here

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