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What Can We Learn About Binary Options from Sports Betting?


I often talk about Forex trading while discussing binary options, because Forex and binary options are two closely related worlds. Another closely related field which I have not yet discussed is sports betting. The online revolution which has made trading in FX and binary options accessible to the average person has also made sports wagering easier to participate in as well, and it has exploded in popularity in recent years as a result, just like trading.

What do sports betting and binary options have in common? A lot of things. While sports betting is obviously more readily associated with gambling and not so much with investing, the two activities are really quite similar:

In fact, when you choose “up” or “down” while trading a binary option, if you think about it, you really are placing a bet that the market is going to do one of two things. Likewise, if you are participating in a One Touch trade, you are placing a wager that price will reach a certain trigger value. If you win your bet in either case, you win the payout. If you lose your wager, you lose your investment—just like with any other form of gambling.

In sports betting, we talk about “the betting public” and “the sharps.” The “betting public” refers to around 99% of everyone in the world who bets on sports. The public is not where you want to be if you want to be a winner. The “sharps” on the other hand are the professional gamblers who make it to the top. They win again and again and have a reliable track record. They will go on to win in the future. If you are a sports gambler, you want to become one of the sharps, and leave the public down in the dust.

The same goes for binary options, even though we do not have names for these distinct groups of people. They do exist. And just as 99% of online bettors are members of the betting public and not sharps, 99% of binary options traders are members of the “trading public” and will ultimately lose their trades and their bankrolls. You want to be a binary options sharp. So how do you do that? What can sports betting sharps teach you? And what can you learn about behaviors you should avoid from the betting public?

The Sports Betting Public

Let’s talk about the typical habits of the sports betting public:

The Binary Options “Betting Public”

Now let’s compare that to the typical behavior of the average casual binary options trader:

As you can see, the sports betting public and the pool of casual investors in binary options have a lot in common. They have the exact same personalities, and a fair few of them probably actually are members of both groups. You do not want to be in this pile! Also note that a lot of members of the public think they are really sharps, or may even want to be—but they still think like members of the public, and make their decisions the same way.

Now let’s talk about the sharps!

Sports Betting Sharps

What do sports betting sharps know that members of the public do not? How do they make their decisions differently? What allows them to win time and time again while members of the betting public lose money?

Binary Options “Sharps”

Now let us see how the choices made by professional binary options traders (and those who are on their way) compare to the choices made by sports betting sharps. Are you a “sharp” binary options trader? You may be, if you recognize yourself in the following bullet points:

Even though we may not use phrases like “sharps” and “the public” when we talk about binary options, these two groups definitely exist, and almost all binary options traders are members of the public. Your goal, if you want to succeed over the long run and maybe even trade for a living, is to become a sharp. The best way to do that is to think like a sharp and act like a sharp. Make decisions based on your own research and analysis, and recognize that there are no shortcuts to success. It is a challenging way to make a living, but if you are smart and determined, you can do it.

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