Today, more and more people are leaving the forex currency market and even the stock exchange, preferring binary options. Why? Yes, because it is really profitable. No, this is not a scam, as many network losers claim. In general, such a tough definition can be attributed to any field of activity where a person has failed. It is much more difficult to get up from your knees, shake yourself 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.
Why is this all said? In binary options trading, you cannot rely only on luck (this is exactly the mistake of most beginners). Roughly speaking, it is necessary to invest in future market growth, and not just press the “Put” and “Call” buttons. The usual guessing is not to achieve a result. Yes, and the chances of winning remain at 50/50. If you exclude the main mistakes from your strategy and correctly approach the work, then success will certainly come.
Mistake 1. Binary options are not roulette
Indeed, binary options have some similarities with casinos. But this is only if the trader will guess (we have already talked about this above). This is a major mistake. Many people begin to trade binary options and end up with the thought that this is just a game. Working at random can make a profit at most once or twice – that’s all. Counting on long-term success is futile. It is possible to earn income on binary options, but for this, you need to have your own strategy and constantly improve it. Many people who fail immediately blame the broker, the system itself, but not themselves. This is how myths are born that binary options are a scam. In fact, this is not so at all.
Mistake 2. Features of money management
It is important to remember that no strategy can guarantee 100% profit – you must immediately drive it into your head. The financial market is so specific, and the price is so unpredictable that talking about a “guarantee of winning” is at least silly. But success can be achieved if you carefully follow the principles of money management.
There is nothing complicated about it. It is no secret that in each transaction a trader risks some amount. So, it should not exceed 5% of its capital (for beginners). If the trader considers himself more experienced, then this value can be brought up to 10-15%. The more experienced, the higher the permissible risks. This approach is already as old as the world and was invented by John Kelly back in 1956.
Mistake 3. Recoup at all costs
And again, this desire came out of the “gambling” part of our life. In the event of a loss when playing roulette or on a machine, a person has a bright desire to recoup. A similar situation occurs in the case of binary options. Ego, of course, is good, but not in trading. Yes, and in gambling, this leads to the fact that the player is completely without “pants”. The most paradoxical thing is that in this case, the probability of grabbing luck by the “tail” in a regular game is greater than in trading. What does it mean? If transactions one by one turn out to be unsuccessful, then it is better not to continue to tempt fate, but to postpone trading the next day. The greater the desire to recoup, the smaller the deposit amount on the account. So you may not notice when there is not a penny left on the account.
Mistake 4. Hasty broker selection
When trading binary options, it is very important that the trader has a reliable rear, in the role of a broker. Therefore, it is necessary to approach his choice with special responsibility. Indeed, against the backdrop of the popularity of binary options, more and more “fake” brokers have begun to appear, which, after deceiving their customers, simply disappear. But here the fault is sole of the trader who did not pay due attention to the choice of a broker for further work. Haste in this matter is extremely contraindicated. Try to “raise” as much information as possible, study the reviews, evaluate the functionality of the site and ask questions to the support service. A comprehensive study of the broker will make the right choice and avoid many problems.
Mistake 5. Trust in trading advisors
The popularity of trading robots is easy to explain – this 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 succeed here only with your mind and hands. Even the best adviser is not able to accurately predict the movement of the market. And how to do it if the market itself does not know which way it will go in one second.
As for the so-called “signalists,” they should not be trusted either. In most cases, the task of these people is to get as much money as possible from naive customers. In addition, the amounts that can be obtained from the sale of signals are scanty. It is much more profitable to trade binary options and get a lot more profit.