Everyone puts money into the markets for the same reason: to grow that money. After that, individualized goals can vary a little bit. Some people want to have their extra money keep up with inflation. Some people just want to outperform a savings account. Others want to beat market growth and have as much money as possible. Odds are, you probably fall into this latter category. That’s where trading comes into play. Trading involves short term trades that aim at beating the market by taking advantage of small chunks of time where prices are moving faster than normal. It’s an admirable goal to try and beat the market, and it is possible. But, it’s also very difficult to get your timing just right in order to do so.
A lot of people think that mutual funds are the way to go. They are managed funds; meaning, someone else does the work for you. You just need to look at what their past returns are and go with the best one, right? Nope. All mutual funds have fees associated with them, sometimes very high fees. And mutual funds have a storied history of seldom beating the benchmark they are posed against. A lot of funds today use the S&P 500 as their benchmark because it is so reliable, but only a handful beat the S&P, and almost zero beat it more than 50 percent of the time. That’s pretty awful odds if you are trying to grow your money at the same rate as inflation, let alone trying to get as much cash as possible.
Instead, doing your own work can have considerable benefits. Yes, it’s time consuming, but it’s also very much worth it for most people. If you could increase your earnings from 1 percent a year to 10 percent a year, wouldn’t that be more beneficial to you? If you have $100,000, that’s a $9,000 difference after the first year, and the number keeps going up exponentially each year that you’re active. The extra effort pays for itself and then some.
The trick is to getting to a level where you’re capable of making money, and not losing it. Some people look to day trading stocks to do this, but get caught unaware by how difficult day trading is and lose thousands before they even know they’ve started. Other people buy and hold losing stocks, unsure of when the right time to dump it is. But, by focusing on momentum, you can craft a strategy that works with your skills. Binary options can help simplify this for some people since binaries focus on direction more than amount. If you think the price of gold is going to drop, then a put binary option is the way to go. Even if it only goes down a penny during the timeframe you’ve chosen, you will earn the full profit, sometimes as much as 80 percent. You need to focus on small trades in order to reduce risk, but if you make ten $100 trades every day, this ends up not being a problem at all.
Mutual funds do have a purpose, but they are not beneficial for most people. Instead, they benefit the people that manage them because of their high fees and low returns. Binaries only charge fees on losing trades, thus giving a winning trader a huge advantage when they do business here. Again, not everyone will profit here, but those that do can profit in a big way and take control of their financial future by eliminating fees and focusing on just making money.