Any work involves certain risks and binary options are no exception. The risks of binary options by 50% depend on the trader himself and the trader himself can reduce them to a minimum, making the trade more comfortable and successful. True, few people are engaged in deep risk analysis, but in vain. About what risk groups exist in binary trading, read on.
Risk Groups in Binary Options Trading
It is impossible to calculate everything in advance, but to analyze, foresee the possible consequences and find the optimal balance between earnings and possible losses is the primary task.
Types of risk:
- inconsistency of prediction with fact. Example: before the release of the quarterly report, the company’s share price is 20% of the company’s profit. If in fact the company shows a profit of 10%, the share price will fall because the report did not meet investors’ expectations;
- force majeure. Strike, terrorist attack, discovery of new deposits of resources – events can occur at any time and can greatly disrupt the investor’s plans;
- incorrect signal interpretation. Pattern ambiguity, erroneous oscillator signal, human factor. Technical:
- price noise that introduces instability in the asset price line;
- slippage. Appear in volatile markets, their cause is an imbalance between supply and demand for an asset;
- lagging quotes and oscillator signal;
- disruptions in the trading platform. May occur due to the accumulation of temporary files. The problem is solved by cleaning the terminal with scripts or reinstalling;
- Broker fraud: fraud quotes, groundless cancellation of a deal, etc. Psychological:
- The influence of the opinions of other traders. Self-doubt, lack of personal opinions make you rely on the opinions of other investors, but it may turn out to be wrong;
- the desire to take advantage of bonuses or leverage. Both options may result in a loss. Behavioral:
- propensity to excitement and emotional instability. At that moment, when you need to soberly analyze the situation, the trader gives in to excitement or emotion, losing the deposit;
- inability to stop in time. Any strategy at a certain point in the market may falter. You need to be able to accept losses and pause.
If you want to add something to this classification, leave your comments after the article. And stay with the FxCash rebate service – in the next article we will tell you about how to minimize all these risks.