Top 5 Beginner’s Errors in Binary Options Trading
Today, more and more people are leaving the forex market and even the stock exchange, giving preference to binary options. Why is that? (Laughs) Because it’s really beneficial. No, it’s not a scammer, as a lot of losers say online. In general, such a strict definition can be attributed to any field of activity where a person has failed. It’s a lot harder to get off your knees, shake off and move on. This is the path of a real trader with a great future.
Learn more about binary options in the article: Binary Options. Features, advantages and disadvantages.
What’s this all about? You can’t rely on luck alone in binary options trading (this is the error of most beginners). Roughly speaking, it is necessary to invest in the future growth of the market, not just to press the buttons “Put” and “Call”. The usual guessing isn’t gonna work. And the chances of winning remain at 50/50. If you exclude the main mistakes from your strategy and approach the work correctly, then success will definitely come.
Error number one. Binary options aren’t roulette
Indeed, binary options have some resemblance to casinos. But this is only if the trader will guess (we have already talked about it above). That’s the biggest mistake. Many people start trading binary options and end up thinking it’s just a game. Working at random can bring profit maximum once or twice – that’s all. It is useless to expect success in the long run. It is possible to get profit on binary options, but for this purpose it is necessary to have the strategy and constantly improve it. Many people, who immediately fail, blame the broker, the system itself, but not themselves. That’s how myths are born that binary options are a scam. Actually, it’s not like that at all.
Error number two. Features of capital management
It is important to remember that no strategy can guarantee 100% profit – it should be immediately driven into your head. The financial market is so specific, and the price is so unpredictable that it is silly to speak of a “winning guarantee” at least. But you can succeed if you follow the principles of capital management.
There’s nothing complicated about it. It’s no secret that in every deal a trader risks a certain amount of money. So, it should not exceed 5% of its capital (for beginners). If a trader considers himself to be more experienced, he can bring this value up to 10-15%. The more experience, the higher the risks are acceptable. This approach is as old as the world and was invented by John Kelly back in 1956.
Error number three. To get back at all costs
And again, this desire came out of the “gambling” part of our lives. If a person loses a game of roulette or an automatic game, he or she has a strong desire to recoup himself or herself. The same is true for binary options. Ego, of course, is good, but not in trading. Yes, and in gambling it leads to the fact that the player is left without any “pants”. The most paradoxical thing is that the probability of getting lucky by the “tail” in a regular game is greater than in trading. What’s that supposed to mean? If trades one after another turn out to be unsuccessful, it is better not to continue to test the fate, but to postpone trading on the next day. The more you want to win back, the smaller the deposit size on the account. It’s not like that when there’s not a penny left on the account.
Be sure to read: Top 7 psychological tips for successful work on the Forex market.
Error number four. Hasty choice of broker
When trading binary options it is very important that the trader has a reliable rear, in the role of the broker. Consequently, his choice must be approached with special responsibility. Indeed, against the backdrop of the popularity of binary options, more and more “fake” brokers are appearing, who simply disappear after deceiving their clients. But here the fault is solely the trader’s, who did not pay due attention to the choice of a broker for further work. Hurry in this case is extremely contraindicated. Try to “raise” as much information as possible, study the feedback, evaluate the functionality of the site and ask questions to the support team. A comprehensive study of the broker will allow you to make the right choice and avoid many problems.
Error number five. Trust in Trade Advisors
The popularity of trading robots is easy to explain – it is a vivid manifestation of human greed and laziness. Remember that robots cannot be used in binary options trading – this is the way to nowhere. You can only succeed here with your mind and hands. Even the best Expert Advisor is not able to accurately predict the market movement. And how to do that if the market doesn’t know which way it’s going to go in one second.
As for the so-called “signalers”, they should not be trusted either. In most cases, the task of these people is to get as much money as possible from naive clients. In addition, the amounts that can be obtained from the sale of signals are tiny. It is much more profitable to trade binary options and get a lot more profit.
Learn more about creating your own trading system in the article: Forex. Development of a trading strategy
If you manage to avoid the above mistakes, that is, all the prospects to become a successful trader and one of those who provides themselves and their family with income from trading binary options. Good luck with that.
Perhaps you’ll be interested in our other article: A damn dozen trader’s errors