The biggest speculative trading market is another term people use to describe binary options. And indeed the most significant part of the binary options trading relies on speculations.
As you know, binary options trading use underlying assets that include currency pairs, stocks, and commodities to create trading options. But in this case, the asset has a little to do with the http://top10binarydemo.com/review/qbits/. The basic form of binary options trading is based on two options that represent two points on a price range, one above and one below the current price. If the price reaches the point which the trader picked and it ends there at the specified expiry date, the merchant collects his/hers winnings. The size of the price movement has no effect on the return the trader gets which is why people say that the binary options don’t rely on the underlying asset as much as other types of trading.
Speculation is the essence of binary options. From the behavior of the traders, we can see three distinctive patterns in the thinking.
These patterns create three different types of operators, all based on the amount of data used in the trading.
– First, we have pure speculators. Those are the operators that use mouth-to-mouth data in their trading. They don’t rely on hard evidence of the price movement, but on the luck and the previous experiences with that asset. The chances of long-term winning streaks are small for these individuals.
– Traders that use technical analysis in their trades make up the second group of speculators. They rely solely on historical trading data of the asset. They use that data to guess the future movement of the property’s price. Without an in-depth and extensive knowledge about the asset and the factors that influence its changes, these speculations rely partially on the luck.
– A portion of binary options traders doesn’t believe in the significance of the historical trading data. Those people look for events in the world that influence the prices of different assets. Their base their trades on the belief that an event will have consequences on the asset in an appropriate amount of time. This type of binary options trading is highly speculative and risky because the governments and other entities have the power to offset the consequences of those events these traders use for trading.
Some people consider binary options as another form of gambling, and they are not far from the truth. When a dealer puts a stock at the stock exchange, they may keep it for a very long time, and therefore they may choose to sell it at any point of time to either offset the loss or to earn money. That isn’t the case with binary options. In that case, the trader buys the option that will expire, and they can’t offset the loss by keeping the options active until the price movement shifts.
Binary options may contain some elements of trading (rates, assets and so on), but in reality, they are an advanced form of a coin flip.