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New traders often make mistakes such as taking way to big a position for one trade, taking a bad loss, and then staying way to small the next 5 times. They may even experience winning easily on small trades, but they never make back the big loss. After knowing all the pitfalls, why would a new trader ever decide to open a binary options account and become a trader?

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Well, I thought it was time to figure out what binary options were and understand why the industry was growing so fast. In principle, I knew before what binary options were and how they worked. However, as usual, I wondered how effective they were as compared to other financial instruments and whether they were the right tool for making money.

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Binary options trading is legitimate, but incredibly risky. In reality, nothing can be farther from the truth. How does Binary Options Trading work? Simply put, binary traders try to predict whether the value of such assets will increase or decrease during a certain time frame.

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Note from Kalen: This article is for informational purposes only. Binary options have become a popular way of trading financial assets online because of their simplicity and high returns.

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Is it possible to make money with Binary Options? You've probably seen the blog posts and articles, telling you how they made millions.

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By Randall Liss Updated Sep 6, Binary options are contracts where an investor is speculating on one of two outcomes: a payoff or nothing at all. The deciding factor is whether or not the option is in the money at the expiration date.

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