Avoid these 4 mistakes and trade binary options profitable!

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Avoid these 4 mistakes and trade binary options profitable!

Binary options trading can be easy, but so can be making mistakes. There are several mistakes made by most of the new traders. Amongst them are, for example, overtrading and failure to observe proper money management techniques (handling of the money on a trading account and choosing the right trade amounts).

Mistake no. 1: Overtrading

I consider overtrading probably the biggest and most common mistake often made not only by beginners but also by advanced traders . Overtrading in the case of binary options means one thing: Traders always want to earn as much money as possible and as quickly as possible and therefore, want to make as many trades as possible. Sometimes it may work out, but I tell you one thing: One day that man trips and loses money.

Always trade according to what you really see on the chart.

Not, what you think you see.

It is important to remember one thing. You don‘t ALWAYS to need use ALL of the signals to be successful on the market. The market is moving without you. And the price patterns are also created by it. So, even though sometimes you think you see a great price formations and the market simply has to turn around, you better think again.

It is always better to do less trades, because when it’s all over and the stock market is be closed, you will never regret the trades you didn’t take, but you certainly will regret the trades you took that were wrong.

Mistake no. 2: Bad money management

Even if you’ve already learned and are not doing crazy 50 trades a day, there is still one thing you have to realize. You should never trade with more than 5% (or, in extreme cases 10%) of your current account. Why? Because you would simply blow your account in just a few unsuccessfull trades. Remember that trading is a long term business. Even if your balance increases steadily by 5 % every day, you’re making way more money than you would with a savings account. And maybe even more than in your regular 9-5 job.

Mistake no. 3: Looking for a miracle

This is also an often touted topic. And I must admit, I was not different at the start of trading binary options. I’ve tried to find the best strategy there is and just download it. I searched for a variety of terms… “Binary options strategy, 15 minutes binary strategy,” and so on…

Looking back, it was stupid. I don‘t know what I was looking for. Probably for a strategy, that will instantly start making me some money. Some can be found on our website (strategy section) or eg. 5 minute strategies on best binary options strategy.com

Does it make sense to look up a binary options strategy? Well, kind of. For me, yes. For newcomers, it certainly makes sense! Somehow, it will make finding and devising trading systems a more pleasant experience. You will learn many things about the Meta Trader indicators, and even learn to estimate the market.

But remember – with any strategy there is, you always have to use common sense.

Mistake no. 4: Untested strategy

The fourth mistake is closely related to the previous point. I advised you to some extent, to look for the strategies and try them. But no strategy is bulletproof, and some are completely useless. Sometimes, this is not possible to determine by simply looking in the history, because the indicators can be repainted. Therefore, I 100% recommend trying all the strategies, with which you want to trade on a live account, on a demo account first. You can find demo accounts at these brokers: Brokers with the demo account.

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Author

More about the author Step

I’ve wanted to build a business of some kind and earn money since I was in middle school. I wasn’t very successful though until my senior year in highschool, when I finally started to think about doing online business. Nowadays I profitably trade binary options full-time and thus gladly share my experiences with you. More posts by this author

7 Binary Options

Although a considerable number of people today are interested in trading binary options, not all of them will succeed in this trade. As a matter of fact, only a few people manage to make profit continually while trading in binary options. The main reason why an increasing number of traders today are not profiting from this trade is that they have just invested with the wrong broker or are making one of the following mistakes. All the people who take part in trading binary options are here to make a profit out of their investments. This being the case, you should avoid the following mistakes in order to profit from this trade.

Poor Money Management

This is among the leading causes of failure among binary options traders today, regardless of the binary options platform they are using. A good number of traders today spend much of their trading time analyzing various assets, looking out for the new trade indicators and trying out various binary options trading strategies. As such, very few traders take their time to scrutinize their money management strategies while trading in binary options. In order to come up with a sound money management strategy, you need to make use of logic and apply a more balanced system that allows you to lower the risk associated with the positions you are opening. Failure to have such a strategy in place is more likely to lead to failure, rather than success in binary options trading.

Unrealistic Expectations

Another mistake that many traders in this market make is having unrealistic expectations, regarding the returns they can get on their investments in binary options. For instance, hopping to get 100 percent profit on your investments is highly unrealistic. Although the binary options industry offers a platform for traders to get good returns on their investments, traders should define their trading objectives and wok towards them. Expecting too much from the trade can turn out to be a huge setback for the trader in that it may lead to unguided investment.

Operating On a Small Investment

Although there are minimum investment amounts imposed by binary options brokers, this should not be a limit to the much you can invest in this trade. In most cases, underfunding your account can actually limit your chances of profiting from this trade. For you to execute a more balanced money management strategy, it is advisable that you fund your trading account with more funds than just the minimum deposit amount required by the broker.

Executing Too Many Trades

In the binary options industry, the more trades you carry out do not necessarily translate to more profit. On the contrary, carrying out too many trades within a short span of time may turn out to be harmful to your investment strategy. Overtrading in this market may come by as a result of two main things:

  • Success- in this case, the trader executes too many trades because of the ego of ‘beating the market’.
  • Failure – continued failure in the positions opened by the trader can encourage him or her to overtrade as the trader tries to reclaim the lost money.

In any case, overtrading in binary options is not a healthy practice. This is mainly because this type of behavior will most likely lead to failure rather than success while trading in binary options.

Gambling Rather Than Trading

Basically, trading in binary options is very similar to gambling. However, it is important that traders in binary options distinguish between binary options trading and gambling, if they are to profit from the trade. Unlike gambling, trading in binary options requires a more business approach. Additionally, it is important that traders make use of the various trading strategies while trading in binary options, rather than just guess the options and hope that it will turn out in your favor.

Basically, trading in binary options is a comparatively profitable way of making money online today. However, you need a more business oriented approach to the market, in addition to discipline and proper application of trading strategies in order to succeed. Avoiding the above mentioned mistakes will improve your chances of continually profiting from the trade.

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Apart from the previous strategies, you also have to have an employee maths degree strategy.

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