Over the years, binary options trading has become simple. This trading world saw the emergence of technical indicators and trading charts. If you have tried binary options trading, you might know how vital these things are.
By using technical indicators and charts, a person can easily understand the price movement of an asset. And then, they can make correct assumptions to win a trade.
Just like trading indicators and charts, a managed account has also simplified binary options trading for people. But is a managed account worth it? Is it safe? And most importantly, is it helpful? You will find the answers to these questions in this post.
What are managed accounts?
A managed account can be seen as an investment account, which a trader owns, but it is managed by someone else. Here, account traders can either be individual retail investors or institutional investors.
Ideally, people choose managed accounts for two reasons. The first is that it helps traders with their day-to-day business with professionals. Also, managed accounts help in getting higher returns.
But the thing is that not every binary options broker offers this kind of account service. So, if you want to avail the benefits of managed accounts, you must do thorough research to find a broker that offers this service.
Why should one not choose managed accounts?
One thing that people like about managed accounts is that it promises to help traders make money while they are asleep. Now, this might sound impressive, but is it true? Even if it is, one cannot deny that the system of managed binary options is deeply flawed.
The managed account claims that it will take care of your money in the best possible way. It promises to offer the kind of safety and services that a mutual fund manager would offer. But it’s not true.
Here are a few things that do not sound right about an account manager.
- Some of the trading brokers that offer managed account services are likely to scam traders via it. These platforms freeze the trader’s money and argue that the account manager needs complete control of the money and trading account. Then they take away the money by saying that you lost everything in a series of bad trades.
- When you make so many trades with a binary options broker, a small fee can also make you lose money.
- There is no given way to find out whether the account manager you have selected is authentic or not.
- And lastly, brokers pay account managers. And you know how brokers get paid? When you lose money.
So, as you can see, using an account manager for trading binary options is risky. Working with an account manager can make you lose a large amount of money.
But the issue is many traders are unaware of the downsides of working with an account manager. They cannot figure out whether the account manager they are working with is a novice or experienced. Thus, they lose money.
While it’s often said that account manager services are excellent for new traders, that’s not the case. As you can see, beginners have little to no trading knowledge, and most of the time, account managers use this fact to scam them.
We are not saying that you should avoid working with an account manager. It’s just that you should be a little careful while finding one. Make sure that you choose someone who can help you save your money and time.
Alternatives to managed accounts
If you want to have the benefits offered by an account manager, but don’t want to hire any manager, here are three things you can do.
Signals are simple and have an easy-to-understand concept. Here, a trading platform or a professional helps traders to know how they must trade. But the best thing is that no one will try to control. So, it’s you who has the last say.
Everything is simplified. If you think that the suggested signals are accurate and can help you win a considerable amount of money, you accept it. Otherwise, you reject it.
In a general form, signals come either as a text or email. It will read as “DOW JONES, LONG, 2 HOURS”. But what does this mean? Well, it can be seen as the signal telling you to invest in an increased price of Dow Jones by keeping the expiry time set as 2 hours.
The reason signals are so popular is that one can easily understand and execute them. Ideally, signal service providers charge the traders an affordable amount of $99.
Affordable because if signals are good, you can make a huge amount of money even if you invest less. Another highlight of the signal is that it will help you win at least 60%.
When to trade
Signals work in two ways, i.e., automated computer programs and human traders send recommendations. The signal providers use a certain program for the automated computer programs that can easily keep an eye on the fluctuating market price.
After analyzing the market, an automated signal is created, which is best for short-term trades. The next one is the human traders sending recommendations. Here a professional monitors the market. They then suggest profitable recommendations that can help you win a good amount of money.
Do your research
The reason signals are better than managed accounts is that they offer a money-back guarantee. If a signal provider is trustworthy, they will give you a chance to test their risk-free recommendations.
Most of the time, signal providers offer a 60-days trial period. If, in the given period, you are satisfied with the services, you can continue to get the recommendations by paying the subscription.
But one negative aspect of signals is that it requires the traders to stay in touch with the trading market constantly. That means you should be involved in the trading process. And staying involved in the market can become an issue if you don’t have time.
Besides signals, you can also choose robots. Here the automated bot takes the trading signals one step forward. The bots work similarly to the professionals and computer programs in signals. They analyze the market and try to find a good trading environment.
After creating a signal, the bot must connect to the trading account to facilitate the trade. But giving trading account access means sharing your login information and details with a company, which can be risky.
That’s why traders generally stick with signals rather than choosing robots. If you also don’t feel comfortable sharing your details, you can choose signals. But if you want to choose robots, there are a few ways to minimize the risk.
Choose your broker
It’s easy to choose a broker suggested by robots since you don’t have to do detailed research. But it’s advised to stay away from these types of robot providers. That’s because they get commissioned for delivering a customer.
You should instead read the pros, cons, reviews, and services offered by different brokers. And then pick one.
The best thing about robot providers is that brokers do not pay them. This thing resolves the conflict of interest of an account manager that a broker employs. Your robot provider will make money when you make money. That means they will always suggest to you the best possible trading tips.
Choosing a robot means giving access to your account to someone else. While a robot cannot steal your money, it can trade badly and make you lose money. So, it’s essential to regularly monitor the robot moves to save yourself from losing money.
The last alternative to managed accounts is social trading. This way allows traders to copy the trading moves of professionals. By following the moves, you can make winning traders and keep yourself safe from making trading blunders.
The best thing about social trading is that brokers let you set the time limit and amount of money. Also, brokers offer stop-loss that you can place to limit the loss.
As compared to managed accounts, social trading is better because it offers effective safe-fail tools. You have all the control over your trading money. And lastly, you get the latest stats on traders who are investing.
If you are continuously using the social trading, you will get access to excellent tools that will help you save yourself from running into a losing streak.
Managed accounts are an amazing way of making a profit. If you choose a managed account service, you need to give access to your account to another company, which can be risky under certain situations.
But you can protect yourself by choosing an alternate way of managing accounts. The alternatives are less risky and offer amazing benefits. By choosing them, you can minimize the risk.
While choosing one of the recommended options, you can also choose to trade a familiar asset. That is because a familiar asset reduces the chances of losing money since you are aware of its nature.
So, by taking a few precautions and staying alert, you can win a considerable amount of money.