Is trading Binary Options a real profession? The key to success in the derivatives market

Is trading Binary Options a profession or just a side income activity? This question is often asked by those interested in investing in derivatives markets and seeking new career options in the digital age. In reality, whether trading Binary Options can be considered a profession depends on several factors, such as the trader’s skills, money management, and discipline in following strategies.

What is Binary Option, and is it suitable for aspiring professional traders?

Before discussing the feasibility of trading Binary Options as a career, we should understand what this product is. Binary Option is a financial instrument that references the prices of various underlying assets. Traders invest money to predict whether the price will go up or down from the current level within a specified time frame.

If the price moves as predicted, the position is “In the Money,” and the trader receives a fixed return. If the prediction is wrong, the position becomes “Out of the Money,” and the trader loses the entire investment.

For those seeking a high-income potential job, this tool might be an option, but it requires a deep understanding and continuous practice.

How does it work: risks and returns of this instrument

Binary Options mainly come in two forms: Call Options (predicting the price will rise) and Put Options (predicting the price will fall). The short time frames (from 1 minute to 15 minutes) allow traders to see results clearly from the start. Profits or losses are usually between 70-85% of the invested amount.

For example, if you invest $100 in a Call Option and your prediction is correct, you might receive $185 (initial $100 plus $85 profit). If wrong, you lose the entire $100. This “all-or-nothing” payout structure requires high accuracy and good risk management.

When is Binary Option considered a profession and not gambling?

The key question is: when does trading Binary Options become a real profession rather than gambling? The difference is as follows:

If you trade without a plan — opening positions based on emotions without analysis or proper money management — this can be considered gambling, akin to guessing blindly.

If you trade systematically — with a clear plan, market analysis, strict money management, and risk/reward calculations — then it can be regarded as a profession.

Those who profit consistently from Binary Options typically have a win rate of at least 50-60% and manage their funds carefully. To turn this into a profession, winning rate alone isn’t enough; the overall return must be positive in the long run.

Legal considerations and risks: what traders need to know

The legal status of Binary Options varies by country, and traders must pay attention to this.

Thailand — There is no official regulation supporting Binary Options trading, meaning traders bear the risk themselves. If issues arise with brokers, they must sue directly.

Other countries — Many have banned Binary Options for various reasons:

• 2021 (Australia): ASIC found only 20% of retail traders profit, leading to a ban on retail investor participation.
• 2018 (EU): ESMA prohibited marketing and selling Binary Options to retail investors.
• 2016 (Belgium): Banned trading due to fraud concerns.
• USA: FBI reports most sites are scams.
• Canada: Bans advertising and restricts instruments with over 30-day expiry.
• Israel: Considers Binary Options as gambling, not investment.
• Germany: BAFIN plans to ban advertising and sales.

These situations highlight that trading Binary Options as a profession involves legal risks and investor protection considerations.

Forex vs Binary Options: which is better for your career?

For those considering between Binary Options and Forex trading, understanding similarities and differences is essential.

Similarities:

• Both are financial products tradable online.
• Can start with small capital.
• Offer opportunities to profit from both rising and falling markets.

Differences:

Trading hours: Forex markets operate 24/5, while Binary Options require attention to the opening and closing times of the underlying assets.

Expiry duration: Binary Options are short-term (1-15 minutes), with fixed expiry. Forex positions can be held from seconds to months, with no expiry date.

Risk and reward: Binary Options have known risk and fixed payout structures. Forex involves higher risk but unlimited profit potential, especially with leverage.

Profit potential: Binary Options typically offer 50-80% returns on investment. Forex, with leverage, can yield 200% or more.

Summary: pathways to success in trading

Trading Binary Options can be a profession, but certain conditions must be met:

For those seeking clear risk management: Binary Options may be suitable because the outcomes are clear from the start. Maintaining a win rate above 60% is necessary for overall profitability.

For those aiming for higher profits: Forex might offer more potential, as you can set your own take-profit and stop-loss points. A lower win rate can be acceptable if risk is managed well.

Regardless of the choice, continuous learning, demo trading, record keeping, and strategy refinement are crucial. Turning Binary Options or Forex trading into a real profession requires time, discipline, and persistent self-improvement.