October 19, 2015 at 2:33 pm
While some Binary Options traders are making good money, other traders can’t seem to make a dime trading. Beginners usually make up most part of the traders that lose. That is because newbies don’t have enough knowledge and experience on their side. They tend to make a lot of wrong decisions as they go along. That is why I have decided to put together a list of tips and tricks to help both new and old traders alike. These tips and tricks should assist you in making the right choices when you are trading Binary Options.
Before you start trading, it is of utmost importance to first educate yourself. Learn everything you can about the markets and Binary Options trading. Do as much research, reading, watching videos, testing, asking questions as you possibly can. By doing this, you will save yourself lots of headaches and be prepared for the task that lays ahead.
Finding a strategy that suits you can be one of the hardest things to do. You will test hundreds of different systems and strategies and still not find the perfect strategy for you. When you finally find a strategy that you like, it is important to stick with it and learn all the ins and outs of it. Test it in different market conditions and various expiry times to see which works best for the strategy. If you are still confused as to what strategy to use, I would suggest that you have a look at our Strategy Articles for a few basic trading strategies that work really well.
Trading economic news releases is tricky, especially if you have little or no experience trading them. The best thing that you can do is to stop trading before, during and after news releases. The great thing about Binary Options is that we do not need the market to move lots of pips to make money as you do when trading the Spot Forex market. Due to this reason, there is really no need for us to trade during any news releases. We have developed a remarkable indicator which will warn you when news releases are being released. If you want more information regarding this indicator and news releases, check out our News Calendar article.
Most people want everything to happen NOW. The truth is good things come to those who wait. Why do I say you need to use longer expiry times? The markets have a lot of “noise” which you can see on the smaller timeframes. How many times has your trade gone in the right direction just to come back and cause you to lose the trade? Shortly after your trade expired the market went back in to your original trade direction. It happens all the time and it can be very frustrating for a lot of traders. Trading with longer expiry times will cancel out this market “noise”. Don’t get me wrong, I am not saying to never use short expiry times. Short expiries do have their time and place but for the most part you should focus on expiries ranging from 10-minutes to 1-hour.
Choosing the right Binary Options broker is an essential part of any trader’s success. There are new brokers that appear every day. It is up to you to do your homework to find a legitimate, professional, reputable and trustworthy broker. There are many factors you should consider when choosing a broker, such as customer support, withdrawal times, tradable assets, binary options types, payout percentages, regulation and much more. At the end of the day the broker should fulfill all your needs. Browse through our Broker Review section to help you in your journey to find the right broker.
Demo trading is a must for any individual who is serious about making a success of their trading. When choosing a broker you should also ensure that they offer a demo account. A demo account will help you in two ways. Firstly, demo trading allows you to get accustomed with the broker’s trading platform. You will quickly know whether you like their platform or not. The second way a demo account will help you is that you can practice your trading strategy. If your broker does not have a demo account, you can also test your strategy by using our Trading Simulator. You just need to add the indicator to your Metatrader4 and trade as if you were trading with a regular Binary Options broker demo account. If you would like to know more, check out the Trading Simulator article.
When you are finally ready for the “real” thing, you need to fund your live trading account. Most brokers offer a minimum deposit of $200. While this is very generous of the broker, the chances of succeeding with such a small account are slim. Yes, you can make some profits from this but the problem comes in with the broker’s minimum trade size. Most brokers will offer a minimum trade size of $20. With a $200 account and trading with $20 per trade you will be risking 10% of your account. Traditional money management systems will advise you to only trade with 1% – 5% of your account. I recommend traders to at least start with a $500 account to make it worth their while and to follow a sound money management system. I wrote an article called “How Much Should You DEPOSIT?” Have a read through it if you want to know more regarding deposits.
It is a well-known fact that trading psychology is the most difficult factor to overcome as a trader. Traders can take years to overcome the fear of trading with live money. It is important to have a clear head when you are making trading decisions. Should you feel emotional, it is advised that you stay away from trading until you have calmed down and pulled yourself together. Emotions and psychology is one of the biggest reasons why most traders fail at trading so make sure you have it under control.
Many traders, especially new traders tend to isolate themselves from others. This is mainly due to all the hours they spend looking at charts and learning new things. It is important that you manage your time in such a way that you still make time for your family and friends. You can never get back the time you lost which you could have spent with them. Spending time with friends and family will also give you a chance to relax and let everything sink in which you have learned. A cool thing about the internet is that you can meet traders around the world who share the same passion as you. Having traders as friends can be a great motivation for your success.
Last, but not least, you need to enjoy what you are doing. When you enjoy something, you tend to pay more attention. If you enjoy trading, you will be naturally inclined towards it and make better decisions that will increase your chances of success.
There are loads more tips and tricks when it comes to trading; these are just a few of the most important ones I could think of. Follow the ones as mentioned above and take responsibility for your success or failure – at the end of the day your success will depend on nobody else but you. Don’t think about the now, think about the future.
October 29, 2015 at 12:16 pm
Some really valuable tips and tricks Alex! Everything made perfect sense, except point 7. I did not understand what you meant by “Deposit more than the minimum deposit amount”. I always thought that it is a wise idea to deposit the minimum amount. BUT after reading you “How much should you deposit” article it has opened my eyes. I have to say that I have not really thought of it that way.
The thing I struggle with the most is your point 9 in the article. I can’t seem to control my emotions when I’m trading. I keep on revenge trading when I have a loss. As we all know – this usually ends up in more losses. Luckily I am still on demo. I will stick to demo until I can get this emotions ender control.
One thing is for sure…. I definitely enjoy trading so there is no worry there.
November 8, 2015 at 3:30 pm
Yeah Cashin, you are not alone my friend… I think every single one of us struggles with the emotional side attached to trading. Nobody likes losing so you have to train and constantly remind yourself to trust your analysis and stick to your plan. You have to have 100% confidence in your strategy and trading plan if you want to overcome your emotions. It’s easier said than done, but it is the only way. Your chart analysis is only half of your trading success. Your psychology takes up the other half. Keep on with your demo trading until you have mastered both your analysis and emotions before taking the next step.
November 10, 2015 at 12:16 pm
Indeed my friend. I think once a person has got his or her emotions under control it is just a matter of time before you achieve success. But the thing is you can perhaps control your emotions with a $1000 account, but what happens when you trade with say $20 000 account with $1000 risk per trade. You will be under a lot more pressure than what you would be when trading with $50 trades. But I guess you will just need to learn how to control your emotions like you did with the small account when you get there.
August 1, 2017 at 12:30 pm
Yes I agree with you – all these points are very important, especially about emotions and practice
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