When you enter the binary options market, you no doubt are aiming to turn a healthy profit. And why not? This is, after all, one of the most easily accessible ways of securing your share of the immense wealth available in the financial markets.
However, there is no such thing as easy money. You cannot become a millionaire overnight. Even as a binary options trader, you need to be smart and make the right choices in order to cash in. Anyone who tells you it’s enough to just show up, is selling you a fantasy.
In this informative article, we present the top 9 secrets to successful binary options trading. If you stick to them, you will stand a great chance of achieving your ambitions in this marketplace. Read on, to take a conclusive first step towards attaining your goal of financial independence.
1 Find the right broker
This is absolutely fundamental. In order to trade binary options, you are required to have an account with a binary broker. This is something that is quite simply written in stone.
A binary broker is a financial institution that provides its customers with a platform where they complete trades online. It really is that simple.
What complicates things a bit is that there are a lot of binary brokers out there, and that great differences exist among them. For example, not all are geared towards all sorts of traders. Some are suitable for only the very serious trader, with plenty of experience and a sizeable amount of investment capital. Others are better suited for inexperienced beginners with limited funds.
It is also worth noting that the range of different options you can invest in varies greatly. Some brokers only offer basic types of options, whereas others have a whole host of advanced options you can invest in. Obviously, it is important that you find a broker with the sort of options you prefer.
The same can be said for assets. There are certain brokers that allow you to invest in binary options based on hundreds of different options from all over the world. Others only specialize in a select few.
Other preferences worth keeping in mind when searching for a broker, include a good mobile platform and, of course, a good reputation among other traders.
Finding a broker does not have to be difficult. Start by reading some informative articles and reviews elsewhere on this site.
2 Educate yourself
There is no way that you can expect to attain success as a binary options trader without learning the ropes. Quite simply, if you’re interested in binary options, you really should learn what they’re all about.
Seeing as knowledge about this subject can easily be turned into major profits, there should really be no limit to your ambition to learn!
For traders who are keen to educate themselves, there are plenty of helpful resources out there. The most obvious are websites such as this. On the site, you will find numerous articles written by experts in the field of binary investment. Read them to attain a fuller understanding of the marketplace. You’ll probably pick up some useful glossary as well.
For more in-depth learning, we recommend that you visit your binary broker’s education center. Virtually all binary brokers (and certainly all the best ones) offer some such service. There, you will find all sorts of useful information.
You can watch video tutorials, read articles and even e-books that will increase your knowledge about binary options – and your ability to make money on them – considerably.
3 Find your strategy
Identifying your strategy is key to attaining success as a trader. This article is not so in-depth that we will look closely at the different strategies you can choose from – you find that information in other articles on the site.
All we want to emphasize here is that you need to find a strategy, and to stick with it. Trading in a consistent way, is the best way to reach a long-term, steady success that translates into a good income.
If you are unsure about which strategies you prefer, we recommend that you find a broker which offers a free demo. This will allow you the freedom to experiment without risking your hard-earned cash.
4 Trade according to your personality
When we talked about strategies in the point above, we could have added the importance of personality. But seeing as it is of such great importance we decided to single it out as its own secret.
One of the most important choices you have to make when it comes to strategy is whether to trade with high risk or low risk. This decision will define you as a trader, and lead all your decision making.
Obviously, this makes it crucial to your success.
The point we’d like to make here is that you are either a risk-taker or a risk-averse person. That’s just human nature. For this reason, we urge you to trade according to your personality. You will not fare well if you try to trade with a degree of risk that does not fit with your basic temperament.
5 Always remember money management
Winning trades is clearly the very core of binary investment. If you don’t win a sufficient amount of trades, you don’t turn a profit, and that’s that.
But there’s another aspect to this business that is almost as important, but a lot less obvious. That is money management.
Money management is the art of deciding how much you should invest in each of your trades. It is crucial because if you get this wrong, you will be just as unable to turn a long-term profit as if you fail in your trades.
Essentially, if you invest too much in each trade, you risk being wiped out by a losing streak; if you don’t invest enough, you miss out on the profits you deserve when you win trades. Either way, it’s bad news.
On the bright side, there’s a golden rule that can help you: always invest between 3% and 5% of your funds in each trade. Just remember that seeing as your balance changes with every trade that you make (as you either make money or lose money), you need to adjust the amount you invest constantly.
6 Trade according to your budget
It should perhaps not be necessary to point this out, but seeing as traders keep falling into this trap, we just didn’t want to take the risk of leaving it out.
Do not – ever – invest more in anything, binary options included, than you can afford to go without. There is a risk involved, which means that just as you can make a lot of money very quickly, you can also lose money at a rapid rate.
For this reason, please make sure that you trade according to your budget. Nobody ever achieved long-term success through hazardous gambling.
7 Slow and steady wins the race
Patience is the name of the game. This might come as an unpleasant surprise to those who thought binary options trading was going to make you rich overnight, but it’s just the way it is.
You are not going to become rich by completing a handful of trades. You are not going to become rich in a week, or even a month of trading. The only way to attain success is by winning a large number of trades, over a long period of time.
What you need, in order to achieve this, is to win approximately 70% of all of your trades. As long as you keep this success level up, you will eventually grow your capital exponentially.
8 Use signals
Winning 70% of your trades is, as mentioned above, the key to long-term success. It might sound attainable, and it is. However, newcomers might find that their averages are a bit lower.
A great way to address this, is to use signals. A binary signal is basically a trade recommendation generated by specialized computer algorithms. Their strike-rate tends to be 70% +
You can use signals by subscribing to a binary signals provider. For a monthly subscription fee, you will receive a certain number of signals every trading day.
Also, many established and successful traders subscribe to signals. After all, the machines are better at crunching numbers and analyzing data than we are, so making predictions about the financial markets is something they should be good at!
9 Use a binary robot
One way of using the signals described in the point above is to engage a binary robot. This is a form of automated trading software, which has quickly taken the market by storm.
When you subscribe to a signals provider, you still need to execute the recommended trades by logging into your broker and actually making the trade. If, on the other hand, you use a robot, this happens automatically.
The system identifies a promising trade, carries it out on your behalf automatically, and that is that. You literally won’t have to lift a finger.
This way of trading, allows you to make money even when you are unable to trade – such as when you are busy with your day job, socializing, sleeping and so on.
Just be aware that not all robots are equally good. For this reason, it is still crucial that you educate yourself on binary options first, so that you know what to look for when choosing a robot and won’t be bamboozled by jargon.
Also, remember that the points about money management and sticking to your budget also apply even more when you are trading automatically. You must not lose control of your robot’s investing.