There has been extensive discussions on this forum about binary's and the relative advantages and disavantages pertainng to them. I want to point out a few things that I believe may have been overlooked in the collective zeal to evaluate the relative merits of using them as opposed to historically normal trading methods.
I'm going to begin with a statement that may be disputed by some but has a basis in fact, namely that most traders would be happy with a consistent profitability that averaged between 5% and 10% per month presuming that it was in fact consistent and regular. According to published information ,readily available from numerous sources most forex hedge funds, managed account funds ,ect. over time yield no greater return than that although theydo have limited periods of time in which they do much better or worse than that. If that is in fact the yard stick of best possible achievement over tme , than the question becomes the following. Can an individual trader with limited resources achieve a return greater than that usng binary options
To answer that question I'm going to have to resort to some simple math and make some questionable assumptions. Lets presume that an individual opens a binary account with $500 and is willing , on any one trade to risk 5% of his/her bankroll or $25 .If they are correct , or in the money they stand to win about 75% oftheir stake or $18.75 as well as getting the price of the option back for a total cash on cash return of $43.75. Lets further presume that our new trader has superior analytical abilities and is able , in any one day, of maing 5 trades (here's the questionable part) and winning them 66% of the time. Not an impossibe presumtion. The trader would therefore win 66% of 5 trades or 3.3 (forgive the fractions, but theit part of this game) for a total return of 144.37 (3.3 times 43.75 rounded).The total out lay would have been $125 (5 times 25 ) for a net of 19.37 (144.37 minus 125) or about 3.8% of our starting bankroll DAILY. Extrapolated out for a week 19% or a month about 76%. Certainly ammont way in excess of our normal trading expectation of 5-10% per month
Can a trader resonably expect to hit 66% winnng binary trades over time. Depends on the trader and his abilities or lack of them. But if he can his potential earnings will far exceed those of a traditional trader with the same winnng percentage. Good luck
I'm going to begin with a statement that may be disputed by some but has a basis in fact, namely that most traders would be happy with a consistent profitability that averaged between 5% and 10% per month presuming that it was in fact consistent and regular. According to published information ,readily available from numerous sources most forex hedge funds, managed account funds ,ect. over time yield no greater return than that although theydo have limited periods of time in which they do much better or worse than that. If that is in fact the yard stick of best possible achievement over tme , than the question becomes the following. Can an individual trader with limited resources achieve a return greater than that usng binary options
To answer that question I'm going to have to resort to some simple math and make some questionable assumptions. Lets presume that an individual opens a binary account with $500 and is willing , on any one trade to risk 5% of his/her bankroll or $25 .If they are correct , or in the money they stand to win about 75% oftheir stake or $18.75 as well as getting the price of the option back for a total cash on cash return of $43.75. Lets further presume that our new trader has superior analytical abilities and is able , in any one day, of maing 5 trades (here's the questionable part) and winning them 66% of the time. Not an impossibe presumtion. The trader would therefore win 66% of 5 trades or 3.3 (forgive the fractions, but theit part of this game) for a total return of 144.37 (3.3 times 43.75 rounded).The total out lay would have been $125 (5 times 25 ) for a net of 19.37 (144.37 minus 125) or about 3.8% of our starting bankroll DAILY. Extrapolated out for a week 19% or a month about 76%. Certainly ammont way in excess of our normal trading expectation of 5-10% per month
Can a trader resonably expect to hit 66% winnng binary trades over time. Depends on the trader and his abilities or lack of them. But if he can his potential earnings will far exceed those of a traditional trader with the same winnng percentage. Good luck
