Trading Binary Options boils down to simply choosing if an asset will finish higher or lower than when the trade started. You must decide whether to choose PUT or Call. How do you decide? We have included some helpful binary options tips that will help you make that all important decision. While these tips are not a guarantee of instant success they will help you fine tune your trading skills and highlight some of the common pit falls.
There are many ways to succeed as a Binary Options Trader and these 10 Binary Options Trading Tips will help you make a good start to your trading career or point out some bad habits if you already have some trading experience.
1. Understand the Binary Options Market and Trading Tools
Don’t just jump in and randomly choose PUT or Call. This is simply gambling and at best you will win some trades by pure chance. Instead learn all you can about how this market works and the products that are available from brokers.
2. Choose a Reputable Binary Options Broker
Look for a broker with a wide choice of assets and a high rate of payout. If you have a preference for a particular market check that your chosen broker offers trades on this. Choose a broker with a demo system so that you can fully check out their platform and get comfortable with their interface before making any live trades. There are many new brokers appearing on the market every day, while they may be great brokers they will be largely unproven and will not yet have gained a reputation (good or bad). It is advised to go with the established and proven brokers who have had time to prove themselves.
3. Learn How to Trade
This may seem obvious but many new traders get so caught up in the exciting prospect of earning large amounts of money that they skip this step. They jump in without fully understanding how to trade and lose their funds. It is important to take advantage of the broker’s demo system and practice trading and check out any strategies that you may consider using when live trading. In fact many experienced traders use demo systems to check new strategies and techniques.
4. Research the Markets and Implement a Strategy
Successful traders research their assets well, keeping up to date with any news that is likely to affect their asset price and keep an eye on an Economic Calendar, checking what events are coming up that may cause the asset price to rise or fall. In addition, they use proven strategies that work for them. Trading without research or reliable binary options trading strategy is a sure way to lose more trades than you win and your broker will love you!
5. Choose Assets Wisely
Pick one of the more common assets available to trade. There will be much analysis and news available for the more common assets and they tend to be discussed in-depth in forums and other online sources. Avoid the less common assets unless it is one that you already are familiar with and comfortable making predictions on its movements.
6. Practice on a Demo System
As already stated ask for access to the brokers demo system and check that it is a fully interactive system and not just a series of slides and graphics. Most brokers will insist that you make a deposit before allowing access to their demo systems but if you are serious about trading you will be making a deposit when you get started so this should not be an issue for you. Give yourself time to get to know the system fully and to practice trading and using your strategy.
7. Manage Your Money and Your Risks
There is a saying “Don’t put all your eggs in one basket” and this is true for traders too. You should never risk too much of your capital on one trade, many traders never risk more than 5% of their capital on a single trade. If it goes wrong they will still have a sizable portion of their capital available to continue and can recover quickly.
8. Consider trading One-Hour Binary Options
Avoid very long-term Binary Options until you are more experienced. It is difficult to accurately predict where an asset price will be in one month. Instead trade One-Hour Options where you can more accurately predict the closing asset price from analysis, research, upcoming economic events and news stories. In addition, this can be a quick way to profit. If the market is trending in a particular direction you may consider using 60-Second Options to take advantage of the trend and maximize your profits.
9. Don’t Expect to get Rich Quick
Some traders just want to earn some extra cash from a couple of hours work per week while others make a great living by putting in a lot of hard work and extra effort. Be realistic and understand that you get out what you put in and if you put in nothing…. Well you know what the result will be.