Do you really think you can make money onthe binary option by doing what forex traders do? I have bad news for you.
Welcome to the third video of the IQ OptionMillionaire strategy series.
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In there, I will share extra tips about howto master this IQ Option strategy, and also I will share the FREE zoom meeting sessionslink in this new Telegram channel.
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Today we will discuss the difference betweenforex and binary.
Your success is going to be determined ifyou understand why it's important to trade binary differently.
What I'm going to say next will let you understandwhy more than 95% of people lose money in this industry.
I had this conversation with 100's of spotforex traders.
There is a general believeth that binary optionsare all about scam.
Funny enough, most of the people I spoke tohave no idea how manipulated is the forex market, and most of them have little or noknowledge about how the market itself is structured.
On the other hand, with the few people whospent time understanding the binary options industry while remaining in the forex market, I had great conversations.
It's essential to understand what makes thebinary options different than the forex market before to go any further with this series.
The forex market is a decentralized market, which means that there aren't official central exchanges.
As a consequence, the participants are theones who drive the price of a currency high or low.
Unlikely most forex traders think the forexmarket is not just a broker and traders business.
The structure of the forex market is a pyramidsystem, where institutions are on the top while on the bottom, there are people knownas retail traders.
What you need to know about the retail tradersis that they are the regular people who trade the market.
In other words, you, me, and some millionsof people.
Most of the retail traders know that the forexmarket generates a volume of a few trillion dollars each trading day, what they don'tknow is that the retail traders are responsible only for 5% of that volume.
Even if you never thought about it, it makessense to say that banks make the majority of the volume.
After all, we are talking about the foreignexchange of fiat currencies, and banks have a massive role in that.
I'm not going to talk too much in detail abouthow the forex market works, or I would have to spend hours only on this topic, and thereare already 100's of books where you can find that information.
What is crucial for you to know is that banksand big institutions generate 70 % of the daily traded volume, 25% by hedge funds, pensionfunds, and multi-national corporations, and finally, the 5% by the retail traders.
The reason why you need to know those percentagesis that there is a number you must have come across during your trading career; the numberI'm referring to is the 95.
When you hear people saying that 95% of traderslose money, they don't talk about the entire market, but they talk about the retail traders.
Banks and institutions make millions of dollarsout of that 95% of retail traders on a daily base.
They are not the only ones making money outof them.
As I said, this market is a pyramid, and sincemost likely, you don't trade directly via the interbank network, there are other peopleearning money out of them.
Starting with the market makers, brokers, IB, and many more.
Many traders can make a living in the industry.
However, I find quite hypocritical to saythat the binary options market is a pure scam, and the forex industry is 100% legit.
I'm not saying that the forex market is ascam, but there is manipulation driven by banks and institutions all the time.
If you want me to make a dedicated video aboutthis topic, please let me know down in the comment section.
Now let's analyze the binary options industry.
The binary options market is centralized.
The exchange is the binary options broker;every deal you take is going to be against the broker itself.
In other words, the broker takes the otherside of what you are trading.
In this channel, I always tell the truth abouthow things work, and if you are wondering if the binary options business model workskind of like a Ponzi scheme, then you are right.
Technically, it's not a Ponzi scheme; however, it works similarly.
Once again, I can't go too much in detail, but if you want me to make a dedicated video about this topic, just let me know in thecomment section.
Even though you might not know that, someforex brokers adopt the same system too.
After all, it's convenient to do so for someforex brokers since most people lose money.
The binary options have been banned in NorthAmerica and in Europe too.
And even if that happened, I still think thatthe industry is quite balanced.
The binary options indeed work in a centralizedfashion, and you are always trading against the broker.
However, there are a few reasons why binaryoptions brokers don't go out of business.
Let's start with the fact that what is realfor the forex market is also real for the binary options.
Most retail traders lose money, so that isan advantage for the binary options brokers.
The are many reasons why most traders losemoney.
New traders approach the financial marketswithout having the necessary knowledge required.
They also don't know how to manage their capitaland how to control themselves.
Investing in general in the financial marketseems quite simple, people tend to think that you have a 50% chance to be right, This is not always true; many factors are involved, including risk and money management.
My goal is not to convince you that what I'msaying is true.
Instead, what I'm trying to achieve is foryou to understand and agree that what I'm sharing with you makes sense.
Pay attention to what I'm about to say next, if you understand it then you will agree with me that it's nonsense to trade binary optionsthe same way you trade spot forex.
Let's analyze the same scenario, and let'ssee what would make sense to do for the binary options trader and the forex trader.
Let's assume that both traders want to tradeEUR/USD on a 15 minutes time frame chart at the same moment.
Starting from the forex trader, since thisis a 15 minutes chart, would it make sense for the trader to enter the market and exitafter a candle? Of course not.
What the forex trader is going to do beforeto enter the market is to have a three-step plan.
To break it down, the trader has to:In the first step analyze the market and forecast the direction of it and entry the market bygetting the best price available.
In the second step, the trader has to planan exit point in case the market goes against him, that would be the stop loss.
Finally, the third step is to find an areato exit in case the trader forecast is right, that would be the take profit.
About the second step, that will give marginto the forex trader to be wrong for hours.
In fact, to the forex trader is not importanthow long it is going to take to reach the take profit target, and that's what makesforex different than binary.
The binary options trader instead doesn'thave room for that margin of mistake.
When the binary option trader enters the market, he must win within a timeframe he chose before to start the trade.
Hopefully, you can see why doing what forextraders do doesn't make any sense for binary option trading.
When you trade, you need to spot a continuationor reversal area where the price will go for x amount of minutes in that direction.
It’s true to say that for the forex trader, the entry itself is not as important; if his forecast is right he still can get a pricethat is few pips away from his best ideal price and still win.
For the binary options trader, even a singletick might cause him to lose.
Even though the binary options trader doesn’thave to make a three-step plan, winning is harder just because you don’t have any marginfor mistakes.
Regarding the stability of the binary optionsbrokers, there is an important factor.
They don't take a 1 to 1 risk against thetrader.
In most cases, the risk of the broker is between0.
6 and 0.
9 to 1, which means that every time the brokers risk 0.
6 up to 0.
9, they are goingto make 1 in case the trader is wrong about his forecast.
To make a practical example, if the trader’samount for the trade is $100, in case the trader wins the broker loses between $60 and$90.
However, if the trader loses the broker wins$100.
In the past few years, brokers started toimplement a fake over the counter market, where in most cases, it goes in the broker'sfavor.
I strongly believe everybody should avoidthat because it's not a legit market.
By the way, the over the counter market isthe OTC.
Last but not least, if all of that is notenough, the broker might manipulate the price.
About the manipulation, we can discuss forhours if it's a real manipulation or not.
As I said earlier, the forex market is decentralized, so if you are trading fiat currencies, the price of a broker can be different from theprice of another broker.
Brokers use different price providers, andit's kind of normal that from one broker to another, you can see a price difference.
I believe that price manipulation still happens, so if you want to avoid this from happening to you, the only solution will be to tradewhen the price can't be manipulatable.
There are situations where this will happenand we will learn how to spot those trades in the future’s episodes of this course.
The reason why you need to know all of thatis because you need to understand that in most cases, what works in binary options doesn'twork in forex and vice-versa.
This is a big problem because you can't finda useful reference for binary options on bookshelves or online.
There are two reasons for that.
The first one is that most of the professionaltraders prefer to spend time to research other markets such as the forex or the stock market.
The second one is that most people involvedin the binary options don't start their research with the assumption that what works in forexdoesn't work in binary.
What you will find is a bunch of people whotry to repeat what they read on forex or stock books, but guess what, it will not work.
What I'm about to say next is going to bethe key to everything, so listen carefully.
If 95% lose money is because they do whatthe majority of people do.
There is 5% of people who are making money, but who are them? For what I believe it has nothing to do withthe amount of time they read books who share pretty much the same ideas, or even worstabout listening to YouTubers.
Those 5% think out of the box and developeda way to make money that is different from the one most traders use.
We know that there are millions of traders, so 5% of the 5% is still a big number of people.
Most surely, they don't share the same tradingtechnique or strategy, but there is something that works for them somehow.
If you find what they found, you will be inthe money.
I developed my trading style in about a yearbefore that trading was not profitable at all for me.
And still, today, after four years, I'm improvingmy trading technique.
So don't think that you can find how to beatthe market in a couple of days.
The advantage you have over me is that I'mwilling to share what works for me for free.
That way, you won't have to spend months ifnot years to figure out how to make money.
To follow my trading style, you must be afast thinker, you need to control your emotions, and you don't have to feel the pressure ofthe money.
I can't guarantee you that what works forme will work for you also, just because my trading style is very subjective oriented.
You might even be better than me, or you can't, that will depend on how smart and how fast to solve problems you are.
My trading style is all about forecastingthe next candle within 30 seconds.
I'm not 100% of the time right, but I'm rightenough to have great results.
Sometimes, I do trade more conservatively;instead, to make a quick decision, I do plan the entry point hours or even days beforethe trade happens.
But the technique itself shares the same basicsconcept.
We will learn all of that in a few videos, today’s goal is to understand why you must avoid doing what forex traders do.
Hopefully, after watching this video you agreewith me.
Forex and binary are different, so it’spointless and anti-productive to do what most of the YouTubers advice to do.
If you made it so far write on the commentsection #MillionaireStrategy, let’s see how many of you are serious about making money! Also, don’t forget to join the IQ OptionMillionaire Strategy telegram channel, you will find the link in the description.
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