The binary options industry exploded lately. Commercials are everywhere. As such, everyone likes to be a financial trader.

What better way to trade the market by simply showing the direction? Up or down? Call or Put? And just like that, you’ll end up with over 80% rate of return in your pockets.

Now, let’s get serious. Firstly, this is a bad joke. Any serious trader would not settle to gain less than the risk.

Imagine: for any trade, you invest an amount. The actual number doesn’t matter. If you’re right, you’ll end up gaining less than you risked.

In trading, this has a name: a terrible risk-reward ratio. Forex traders that respect money management rules will mock binary options traders simply because of this.

If this is not enough to quit binary trading, here’s some more on the same subject.

Why is Binary Trading Bad?

Besides the terrible risk-reward ratio, binary trading is not only about price. It’s about time too.

Price and Time

Any option must have an expiration date. That means the time it expires.

The price you buy the option is the striking price. The time it expires is the expiration date.

Price and time have always been the holy grail in trading. To know where the price goes and when is crucial.

Unfortunately, most of the traders don’t know where the price goes. Not to mention when. In other industries, you can avoid the time element. Not in the binary options industry.

Industry Flagged by Crooks

The industry is highly unregulated. Not that there aren’t laws or regulators. Only that brokers don’t want to pay for regulation.

The simple thing is to set the business in an offshore and then target clients. This comes with plenty of risks.

Traders don’t know that. They’ll find it only when they want to withdraw funds.

You Can’t Trade What You Want

To be more exact, you can trade only what the broker wants. A binary options trader cannot choose the financial products to trade.

Only the ones offered by the binary options broker are available. Of course, the broker will choose the most difficult ones.

Even if the broker will offer more, you’ll end up finding that the expiration dates favored are short to very short ones.

Keep in mind that trading is a game of probabilities. As such, the probability is extremely high to constantly lose if you use short-term expiration dates like one-minute and alike.

Brokers know that, and they’ll act accordingly.

Conclusion

Trading for a living is a tough job. Those who do make it, are a few ones. They reach this status after years of work and preparation, frustration and more preparation.

None lives from binary options trading. Simply, the chances align with the broker’s interest only.