Tip 2 – Do Not Be Fooled By The Headline “Make 80% In 5 Minutes” Of Binary Options

Tip 2 – Do Not Be Fooled By The Headline “Make 80% In 5 Minutes” Of Binary Options

Tip 2 – Do Not Be Fooled By The Headline

There is a truth that with a winning Binary Option bet you can make up to 80% within 5 minutes or 1 hour, a day or even a week.  This merely relies on two things…

  • Your choice of time frame
  • Your winning bet offered by the return of your Binary Options Broker – 80% is quite standard, some offer more, or some less.

Well, let’s see what they don’t bring up…

You just make 80% of the amount that you bet.  It means in case of loosing you lose 100% of the amount you bet.

Let’s suppose that with £5,000 account and you risk 2% (£100) each time of betting.  It shows that you will lose £100, or 2%, if you lose in the bet, you will win £80, or 1.6%, if your bet wins.
Give some more viewpoints on this…

Each time of your lose (it means the broker wins), the broker makes 25% more than you. We can see £100 is 25% more than £80.

Every bet that you win, as the truth, you make 1.6% and every bet you lose, you really lose 2%

The Call/Put is the most common Binary Options bet.  As you can see, this fundamentally means you bet at the closing price of the market will be Higher/Lower (Call/Put) than the current price at the end of the term you are trading.  This is similar to calling heads or tails on a coin flip.  The main difference is of course, as already shown out…

Every time of the broker’s winning; he makes 25% more than you

You’ve probably already worked it out, it means in the attempt of making a profit; you have to win the coin flip much more often than the broker does!  So, exactly, how many time?

By example, it is done well, so let’s follow our £5,000 account and 2% (£100) risk on each bet.  Let’s make use of 100 bets…

Winning 55 of your bets, you would make a return of +£4,400.  Factually, 45 losing bets mean you would be responsible for a loss of -£4,500.  This is a net loss of -£100 or, -2%.

At least, you have to win 56 of every 100 bets you place for making a profit. You would make a return of +£4,480 if 56 of your bets win. In a comparison of this with the 44 bets you lose (-£4,400) and it is equivalent to a net profit of +£80 or, +1.6%.

For making a profit, you must win at least 56% of all Binary Options bets that you place

And, a reminder of why this is the case…

Every time of your winning, you make a return of 80% of your bet amount.  You lose 100% of it if each time you lose.  Compared to what you make when you win the broker makes 25% more every time you lose.

Note:  Although Forex Binary Options traders may be acceptable to this, traditional traders of Forex typically aim at a scenario where they make 200% of their risk every time they win, not 80%.  It means they target for a 1:2 Risk: Reward not 1:0.8.  It is most uncommon for any Forex trader to consider carry out a strategy with a Risk: Reward less than 1:1.

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Top 7 Forex Binary Options Tips You Have Never Heard

Rewrite from: http://forexuseful.com