Many people are interested in relying on binary options trading to make an extra income. Newbies who want to succeed in this field must first get educated and become familiar with how binary options works. The following are six tips on how you can implement successful binary options trading. This is how you win at binary options trading:
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- Trade on Long Term instead of Short Term
Many traders lose money on short term trades even though it has a more profitable ROI. The reason is because short term trade is harder to predict and most traders will keep wanting to trade more and more to get back the money they lose. Therefore, you should opt for long term trading instead of short term trading if you want to minimize your losses. Long term options has an expiry time of more the 24 hours and can last for a few weeks or months. The reason why brokers often encourage traders to trade on short term options instead of long term trades is because there is a higher chance of winning. Another reason is that the strategies associated with long term trades is easier to implement.
- Don’t Trade on Money You Don’t Have
As a reminder, you should avoid trading with emergency money that you need to cover your expenses because most newbie traders will usually lose their money in their first trades. When you lose a trade, you must not be frustrated and force yourself to trade again. It is best to take a break sometimes so that you can clear your mind and make a better decision.
- Watch the Market for Major News
You must learn how to monitor the market for important news to predict the movement of the asset’s price. Some of the news you should follow up are changes in the monetary policy, rates of unemployment in the economy and etc. You should regularly review the press release that the banks release because they provide you with insights on the market condition. You should subscribe to the economic calendar on the trading platform so that you can easily follow up on the important events in the market.
- Social Trading
You should make use of the social trading feature to copy the trades of other successful traders. Social trading allows you to enjoy a high winning rates without having any previous experience in binary trading. In a social trading network, traders with all kinds of expertise levels can exchange tips and ideas. You can take the ideas of other traders instead of relying on your own evaluation when placing a trade. Using social trading allows you to learn trading from the best trader in the world. You will be able to limit your risk when you follow more than one advanced traders in the social trading network.
- Set a Budget
You have to set a budget and stop trading after you reach a certain limit. For example, you can set a limit on the amount that you will spend on the trades so that you can avoid emotional trading. As a rule of thumb, you should never invest more than 20% of the funds in your account. There are a few brokers that offer fully managed accounts, which means that your personal account manager will execute the trades on your behalf.
The fully managed account is not recommended because it can cause you to lose money fast since the account manager will keep on placing trade without stopping. It is best that you take charge of the funds in your account yourself. It is all right to encounter a couple of unsuccessful trades because you will learn over time.
- Don’t Accept Trading Bonus
Many traders are attracted to the large trading bonuses and accept them without giving a thought about it. There is a catch and that is you are required to trade the entire volume which is about 40 times of the bonus before you can withdraw. If you fail to meet the minimum trading volume, they will not allow you to withdraw your profits and all you can withdraw is only your capital. Even when you deposit for the second time into your account, you will be subjected to the same trading volume requirement. Therefore, you must think carefully before accepting the welcome bonus that is included in your package of the account type you choose.
In conclusion, you should take into account the above tips before placing your first trade. You must keep in mind that you have to practice trading often if you want to become a professional trader.