How to trade binary options
Do you know what is binary options trading? Do you understand the essence of it? Do you want to succeed as a binary options trader? Then this article is just for you.
Trading binary options means simply choosing whether this or that asset will finish higher or lower than at the beginning of the trade. You must make up your mind if you should choose PUT or Call. How do you make this decision? Here we have collected some useful binary options tips that will come in handy if you have to make an important decision. They will not guarantee you an immediate success, but they will help you improve your trading skills and prevent from common failures and mistakes.
There are actually many ways to become a successful binary options trader. These tips will help you make a good start in the trading business and warn you against some bad habits that you probably already have in your trading experience.
Understand the laws and tools of the binary options trading
You shouldn’t just jump in and randomly click PUT or call. This is not trading, this is simply gambling. If you win, you do it by pure chance. To make your winnings regular, you should learn all about the laws of this market and the products that are available from brokers.
Choose a professional binary options broker
Your initial purpose is to find a broker with a wide range of assets and a high rate of payout. If you prefer some particular market, you should check if the broker that you’ve chosen offers trades on this. It’s also important that your broker should have a demo system, so that you can check the platform and get accustomed to the interface before you can start taking part in real trades. There are many new brokers that appear on the market daily. Some of them may be really great, but still unknown, because they haven’t gained a reputation yet. When you just start trading, you are highly recommended to go with the established and experienced brokers who have proven to be safe.
Learn the principles of trading
This may sound evident, but there are lots of newcomers you get so much obsessed with the idea of earning large sums of money that they simply forget about learning. They start trading without even understanding how the system works and lose all their funds. You should take advantage of the broker’s demo system to practice your trading skills and check out the strategies that you are going to use in real trading. Even experienced traders use demo systems to check their new techniques and strategies before implementing them.
Do a market research and apply a strategy
Successful traders research the assets thoroughly, keeping track of all the news and changes they may potentially affect their asset price. They also keep an eye on an Economic Calendar, checking what events are going to happen in the nearest future that may cause the price fluctuations. Moreover, they use proven strategies that work for them. If you trade without doing a research or using any reliable strategy, you are sure to lose more trades that you win.
Make wise choices
You’d better choose one of the more common assets that are available to trade. There will be much more news about it. Such assets are usually discussed in detail in forms and other online sources. Avoid the less common assets if you are unfamiliar with them and cannot make any reliable predictions.
Take advantage of a demo system
As we’ve already mentioned, you should ask for access to the broker’s demo system and check that you will deal with a fully interactive platform and not just graphics and slides. Most brokers won’t give you an access to demo until you make a deposit, but if you are serious about trading, you should make it at the very beginning, so that won’t be a problem for you. Take time to study the system and to practice trading using your strategies.
Manage you budget and your risks
You should not risk it all at once. If you are a newcomer, don’t risk too much of your money on one trade. Many professional traders never risk more that %5 of their capital on a single trade. If something goes wrong, they will still have money to continue trading and recover rather quickly.
Try trading one-hour binary options
You’d better avoid very long-term options until you have gained enough experience. It’s rather difficult to predict where the price for this or that asset will be in a couple of months. Choose one-hour options where you can make a prediction based on analysis, research, economic news and other factors. Moreover, it’s a fast way to profit. If the market is trending in a certain direction, you may even use 60-second options to take advantage and earn quickly.
Sign up for binary options signals
This way you will get signal providers’ predictions on a regular basis. If some signal providers have a high winning ratio, it means that before releasing this signal, they’ve carried out an expensive research and analysis. It doesn’t mean that they always predict correctly, but the best ones win much more often than lose.
Don’t expect to get rich immediately
Some traders consider this as an extra work for a couple of hours a week, while others earn their living on this, putting a lot of time and effort. Set realistic goals and understand that in order to earn, you should work a lot.