Binary Options Trading vs. Financial Spread Betting

Small bet binary option. Common Misconceptions About Binary Options

I often talk about Forex trading while discussing binary options, because Forex and binary options are two closely related worlds. Another closely related field which I have not yet discussed is sports betting. The online revolution which has made trading in FX and binary options accessible to the average person has also made sports wagering easier to participate in as well, and it has exploded in popularity in recent years as a result, just like trading.

What do sports betting and binary options have in common?

A lot of things. While sports betting is obviously more readily associated with gambling and not so much with investing, the two activities are really quite similar: They are both activities which entail a high degree of risk.

They both can yield a high reward. Both are games of chance where most players will ultimately lose. The tiny percentage who win at either have an edge that others do not. If you do approach either sports betting or binary options with a clear head and a sound strategy, you can invest in either for repeated success.

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You can ultimately go on to trade or bet for a living. Likewise, if you are participating in a One Touch tradeyou are placing small bet binary option wager that price will reach a certain trigger value. If you win your bet in either case, you win the payout. If you lose your wager, you lose your investment—just like with any other form of gambling.

The public is not where you want to be if you want to be a winner. They win again and again and have a reliable track record. They will go on to win in the future.

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If you are a sports gambler, you want to become one of the sharps, and leave the public down in the dust. The same goes for binary options, even though we do not have names for these distinct groups of people. They do exist. You want to be a binary options sharp. So how do you do that? What can sports betting sharps teach you? And what can you learn about behaviors you should avoid from the betting public?

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The betting public usually steers clear of the underdogs—the teams or players that are not favored to win. The betting public also assumes that a winner on the field will also be a winning bet. They pay little attention to the points spread, a feature of sports wagering which can actually have just as much of an impact on whether they will win or lose the bet. In other words, they do not necessarily notice whether or not they are getting a good deal.

News is a major influencer on the betting public.

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If a particular team or player is in the news a lot, the betting public may make their decisions based off of what happens, whether it is positive news or negative news. The public also prefers to bet on high profile games and ignore low profile games.

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They feel like they know more about the high profile games, and they do not put a lot of effort or research into learning anything in-depth about the sport they are betting on or the teams they are wagering on. Emotion has a big sway on the betting public. Members of the betting public love to stand behind their favorite teams. They cheer them on with their money, allowing sentiment to drive their bets. Maybe they see other traders doing it on their small bet binary option trading apps, or maybe they heard a famous investor mention a certain stock or commodity on television.

The fun is beginning.

Either way, they allow the choices of other traders to drive their own decisions. Casual investors do not necessarily recognize a good deal either. They also may not pay close attention to the expiry time for a trade, and may not realize that features like these which are a part of the setup are as much a determinant for whether they win or lose as whether they pick the right direction or not when they call or put.

News headlines have a big influence on casual binary options investors as well. If you are casually trying to trade the news, you will probably lose, and all while thinking you are really smart. They often bet with their gut instinct and believe their intuition actually can tell them whether a trade will be a winner or not. They allow fear, greed, hope and despair to muddy their decision-making.

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As you can see, the sports betting public and the pool of casual investors in binary options have a lot in common. They have the exact same personalities, and a fair few of them probably actually are members of both groups.

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You do not want to be in this pile! Also note that a lot of members of the public think they are really sharps, or may even want to be—but they still think like members of the public, and make their decisions the same way.

The Bottom Line Binary options are financial options that come with one of two payoff options: a fixed amount or nothing at all. That's why they're called binary options—because there is no other settlement possible. The premise behind a binary option is a simple yes or no proposition: Will an underlying asset be above a certain price at a certain time? Traders place trades based on whether they believe the answer is yes or no, making it one of the simplest financial assets to trade.

Sports Betting Sharps What do sports betting sharps know that members of the public do not? How do they make their decisions differently?

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What allows them to win time and time again while members of the betting public lose money? Sports betting sharps are much more aware of points spreads and money lines than members of the public. In other words, they realize that they need to shop around for a good deal on their wager or they could lose, even if they are right about what is going to happen on the field.

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Betting sharps know they must not only look at historical data in order to hypothesize about future performance, but understand the distribution pattern of recent events, as well as why a team has been winning or losing.

They do not shy away from in-depth research and analysis, and they use a consistent method to decide when to enter a bet and when to avoid jumping in. Professional sports bettors avoid complex types of wagers and prefer simple wagers. They rarely small bet binary option involved with parlays and teasers, and keep betting as straightforward as possible.

While they may be attracted by high payouts, they also do what they can to mitigate their risk. They would rather make money regularly in small increments and gradually build up their accounts than risk it all on a bet they are extremely unlikely to win in the hopes of striking the jackpot.

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Sharps never oversimplify reality. They do the work themselves and understand their own betting decisions. They know there is no shortcut to riches. There is so much more that goes into it than that. You could for example pick the right direction, but the wrong expiry time.

What Are Binary Options?

Smart investors make sure that the terms of the trade will make it a likely win, just as betting sharps look for a good money line or points spread. Professional binary options traders not only analyze data through technical analysis, fundamental analysis or price actionbut understand why their strategies work.

They use a consistent method to generate reliable results. They do not make random decisions. They know that random decisions result in random wins and losses, and over time, more losses than wins.

As a binary options trader, there are a number of different types of trades available to you.

When we say touch, we refer to the notion of an asset shifting its value to a certain level up or down. However those bets are played makes no difference to the overall point of the trade, leaving the main objective the same as it always was: either the value of an asset is going to reach a predetermined level or not.

But there are complex alternatives like Ladder trades available as well. Ladder trades can work out nicely, but they are complicated and the likelihood of a high payout is fairly low.

It is much more likely that you will have partial profits or losses. Most professional investors will stick with simple, straightforward trades and avoid these more complex trades, just as most professional gamblers will stick with simple sports bets. Professional traders, like professional sports bettors, do not think they can succeed small bet binary option by mirroring other traders or doing the opposite of what the public is doing.

They may use trade alerts or take advice from others, but they will always do the necessary work to develop and utilize their own strategies.

They know they must depend on themselves for their successes, and hold themselves accountable for their failures. Your goal, if you want to succeed over the long run and maybe even trade for a livingis to become a sharp. The best way to do that is to think like a sharp and act like a sharp. Make decisions based on your own research and analysis, and recognize that there are no shortcuts to success. It is a challenging way to make a living, but if you are smart and determined, you can do it.

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