Is it possible to become a Binary Options Billionaire? – Compounding Strategy
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In the past 2 decades, the development of new technologies in the computer industry and the innovation of new products in the financial industry have greatly contributed to the growth of the online financial trading industry. For example, binary options trading was introduced into retail trading thirteen years ago. And with the growing popularity of binary options trading, many niche industries have grown to support traders in their trading activities.
One such specialized industry is automated trading systems or trading robots. These automated trading systems are designed to streamline the trading process for traders. There are legitimate developers of these systems, but there are also many systems designed to steal money from traders. In this article, we will discuss if you can become a Billionaire with Binary Options or not.
What does binary option compounding strategy mean?
Simply put, compounding (compound interest) is a mathematical formula that focuses on using the revenue to generate more revenue. Currently, this method is often used for the long-term growth of annuities and funds but tends to be overlooked by many binary options traders.
This method is very simple to use and can be used with any binary options trading to maximize your profits. Because of the short time frame for binary options trading positions, a compounding formula is a very suitable formula. According to the famous mathematician Einstein, addition is one of the greatest mathematical formulas ever discovered. So how does the formula work?
Let’s say you put 1,000 USD in a binary broker, open 5 trades at 10% of your capital, and get all of them by the weekend. This means you will receive 70% of your investment, and your total account balance for 5 operations is 1,350 USD. Using this as capital could open 5 more jobs, each accounting for 10% of the capital (135 USD). If you get these jobs with a 70% payout, you’ll earn 475 USD from your last week’s earnings. (70% of 135 USD is 95 USD, multiplying by 5 gives you 475 USD).
It is not possible to win all trades, but it is an example of scenarios of compounding with binary options and how you can succeed: For each position, you stake 10% of your capital, earning 350 USD in the first week and 475 USD in the second. This cumulative profit increase is called the “snowball effect”.
Can compounding make you millionaire with Binary Option trading?
The question of whether a trader can become a millionaire by trading binary options is one that attracts a lot of debates from supporters and critics. The answer to this question is yes, but with significant limitations.
However, while on paper it is possible to become Binary Options billionaires, the realism of this is the other aspect of the story. Nonetheless, we can still guide you through what you need, and it’s up to you to decide if it’s possible.
It is not common to create wealth through binary options trading or any other form of trading in this regard. Achieving your goals takes patience, time, a well-planned plan, and will probably take years. As with all investments, rich trading strategies are based on “integration”. Take a look at the chart below. It shows a five-year plan to become a binary options millionaire with only 500 USD in initial capital.
The chart is just a sample. You can adjust your starting capital, adjust the period, adjust the percentage of income you want to receive each month, and more. This is a plan that requires patience and a lot of training. If the numbers look really good and achievable, why aren’t so many traders still coming? The reason is simple. Many traders do not reduce their risk. They‘re interested in quick large gains. They want to spend their money on luxury, and they don’t resist the temptation of instant gratification. In terms of trade, the one who is slow and steady always wins in the end.
How to use compounding to enhance your rewards while trading Binary Options
As many self-proclaimed trading experts say, there is basically no perfect way to trade binary options. As with all other types of investing, there are certain methods and theories that have been proven to be more effective than others in binary options trading. Anyone who has been successful with binary options will tell you that most traders focus on their trading strategy rather than managing their money while trading.
No matter how many articles and ebooks you come across and say you should mainly depend on your trading strategy, money management is an important part of successful binary options investing strategy.
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Effective use of compounding
If you would like to use this money management strategy instead of using a fixed interest rate for your open positions, you must use a fixed percentage of your brokerage account’s total equity, such as the 10% used in the example above. When calculating compound interest, you don’t have to take a lot of risks to get an unusual return. You just need time. Your profits will continue to grow over time, but your risk will remain the same.
Basically, compounding is designed to reduce the short-term risk you have to take when trading binary options, while also giving you good long-term returns on your trades.
Compounding helps to create wealth
The hidden principle behind achieving what you see in the table is compound interest. Albert Einstein called him the eighth wonder of the world and he was right. Composition means you can convert a small amount into a lot, and the more you add, the more that percentage increases.
Take a look at the table again. Your starting capital is 500 USD, your monthly salary is 15%, and your first month is 75 USD. There are 20 trading days per month. This is done using the lowest possible risk. Risk management is key here.
You can become a binary options millionaire without much risk. The first step is to get started. Get 500 USD and start diligently and faithfully for the next 5 years and see how far you can go with this plan. You can change the layout to your liking, but do not overlook the principle of minimizing risk.
Managing your money is something you have to get used to becoming a successful trader. You will find a variety of strategies to choose from. We recommend that you get the information and then decide which one best suits your needs and abilities.
Can you have it big with binary options trading? – Trading Timeframe
In finance, it is common knowledge that the longer the investment period, the more likely it is to yield a more profitable result. In fact, the investment period of 20-25 years is almost guaranteed to be profitable. The probability of a profitable outcome decreases linearly and the investment conditions decrease. In my experience, you can predict long-term 1-3 year price measurements with greater than 90% accuracy, but medium-term accuracy for price movements over 1-3 months drops to around 70% for seasonal trading cards. Daily trades are reduced with 50% random accuracy.
What is the overall duration of binary options trading? Usually only 60 seconds! How exactly can this be achieved within this timeframe? A time frame combined with a payment system is the perfect formula for a loss scenario, but binary options brokers use clever terms to portray that people can earn 70% of their money in just 60 seconds! Talk about rethinking a completely negative situation into a positive one! This is another very important reason why it is difficult to get rich on binary options in smaller time frames.
Why is it more difficult to make money on a smaller timeframe?
The main reason it becomes difficult to make a profit when the timetable is shortened is that entry and exit points must be more precise in order to win when the timetable is shortened. This means investing, in the long run, can open up trades and wait for prices to eventually move in your favor. This can happen slowly after a few months and you can still benefit. However, as your schedule narrows, you need to be able to identify entry points that become more accurate for your bottom line. If you are investing in a week, you need to decide where the price will start moving in a favorable direction over the next few days.
Now imagine investing only sixty seconds… You should be able to get into a trade and it will immediately work in your favor! How exactly do you need an analyst for this? This takes us to the next point…
There is absolutely no time for comprehensive analysis! Yes, investing in binary options that finish in sixty seconds will often result in you having to decide to specify less than a second without any technical or fundamental analysis! Yes, it takes time for real investors to fully analyze their investments to make an informed decision whether to invest or not. This investment analysis process determines the difference between investing and gambling. Investors invest in well-researched and well-informed opportunities, while gambling runs around without such scrutiny and hopes to go the way it wants. What if the root cause was investigated beforehand?
The next problem with the very short timeframes that make binary options rich is that even if you do technical research or analysis, fluctuations always occur per minute! No matter how strong the underlying asset price prediction is based on technical analysis, there will be minute-to-minute price movements that completely contradict this prediction. So you can buy binary options because the underlying price measurement is determined by the strength of the day based on technical analysis. If that moment is a downside, you can still lose it and you don’t have to go far to do so. No matter how low the strike price of a binary call is, you will end up losing money.
See how the combination of a payment system and a very short time frame allowed binary options brokers to already gather all their chances to win to their advantage. Well, even with those advances, there might be one in a thousand people who can consistently predict very short-term pricing measures. It is at this point that binary options brokers use outright fraudulent methods to defeat the winners.
Conclusion: The compounding strategy can help you to make money
The main reason to trade binary options is to make money. This type of transaction appears to offer the potential to generate significant capital without raising a large amount of capital in advance. Many people who start shopping are inspired by the idea of abundance but do not complete their research and run a poor business.
People who learn from their mistakes and gain a lot of experience in binary options trading are usually very successful and use multiple brokers to increase their wealth. Ultimately, this leads to the question of whether you can become a millionaire by trading binary options. Obviously, any plan to raise millions of dollars can’t be better than the credibility of the broker.
(Risk warning: Trading involves risks)
See our other articles about Binary Options:
Last Updated on January 27, 2023 by Arkady Müller