I just got an email from a reader with regards to an article I posted on the 60 Second Binary Options “rapid fire” trading strategy. He asked the following question, “Why would I take the advice of a broker? They want me to lose money.” The reader asked a excellent question.
How Do Binary Options Brokers Profit?
The binary options broker makes money on the difference between the payout to the trader on winning trades which is up to 85% and what the broker collects on losing trades which is up to 100%. In a straight 50-50 rate of success the broker will profit more than the trader. In essence it’s the trader against the broker so it would seem the broker would want you to lose so they can profit.
Do Binary Options Brokers Provide Legitimate Trading Strategies?
The key for a successful broker is to attract as many accounts as possible. It is for this reason that brokers provide their own binary options trading strategies. As I have stressed before, the difficult part of trading is not finding strategies – there are many to choose from, but the hard part of trading is to have the patience and discipline necessary to maintain the consistency that is required to maximize success from any trading system. Most traders ultimately do not possess these tools and will lose money. Brokers know there will be a certain amount of profitable traders and actually need these traders in order to engender long term success for themselves and the industry as a whole. It is for this reason that brokers are offering more and more educational and training programs for prospective traders.
As competition increases binary options brokers will continue to provide services to help traders better understand how to profit in this business.Its crucial for brokers to provide successful trading strategies for the products they are offering in order to attract traders. They understand that although they may help some traders become profitable most will not have the proper discipline to adhere to the trading guidelines and will lose money.
At best the trading strategies provided by binary options brokers are very helpful. At worst they provide basic information as to how to trade binary options. I haven’t yet come across a broker that deliberately tries to get traders to lose money base on the provided strategies. I highly doubt this would occur as word would get out and the broker would lose all credibility.