Why do you want to get into binary options trading? Is it for a little extra cash or is it because you want to work from home and end up buying a boat? Whatever your reasons might be, binary options are a great way of getting there. And, if along the way you pay close attention to the binary options tips we have lined up here for you, then your journey will be both short and fruitful.
#1. Choosing the appropriate broker
The main piece of advice you need to remember when you get into binary options trading concerns choosing the right broker. If you manage to find a great broker who knows what they’re doing and strwilling to help you, you’ll see that they are going to make all the difference in the world.
There are a number of websites out there which allow you to compare brokers. This is a great idea, especially if you’re a beginner in this field and you don’t know how to choose your broker or where to find him or her.
Another important thing you must keep in mind is that you need to increase your knowledge continuously. The trading market has been described as a living organism which grows and develops on a daily basis. Keeping that in mind, you can see that, since new information arrives every day, you must learn about it. Otherwise, you won’t be able to remain on top of your game.
As a micro-tip on this topic, you can read books focused on this subject matter. Apart from that, you can also talk to other, more experienced traders, who will be more than happy to share their thoughts and views with you.
#3. Going for long term
Out of all the trading options one has, the long-term one is the best, as it will render the best results in the end. Building on that, you should know that binary options trading is a long-term activity. What’s the micro-tip here? Develop a plan that stretches out over longer periods of time and, maybe even more importantly, stick to it.
You must also resist the lure of fads which are not a part of your overall plan. Think of binary trading as a long shopping session for which you have prepared a list before you left home that day. Don’t buy anything that is not on the list and don’t give in to whims or ephemeral trends.
#4. Over-investing? No!
Building on what we advised you at number three, whims and trends generally lead to over investing. However, that is a big ‘no’ in the world of binary trading. When you are a beginner, you can get easily carried away by the thrill of it all and invest a lot more money than you should. Still, you mustn’t do that, and the reason is quite simple. When you over-invest, you run the high risk of losing a lot of money and missing out on other, possibly better, opportunities.
As part of our binary options tips list, employing some self-control is mandatory if you want to become a great investor.
#5. Keeping a clear head
The psychology of binary trading and its challenging game is not difficult to comprehend at all. When you trade, you get a rush of adrenaline, mixed with the fear that you might lose the money you’ve worked so hard for, and with the happiness of a prospective win. Seeing as you have this emotional range going on at the same time, it’s very easy to get sidetracked and make rash decisions. However, you will regret said decisions later on, when you calm down and realize what you’ve done.
Keep a clear head, try to stay objective, and make rational decisions. If you seem unable to control your feelings as long as it takes for you to trade, then you can take a break until you’ve calmed down. You may also ask your broker for help or a more experienced trader.
#6. Study the market
This piece of advice means that you have to prepare yourself prior to starting from a technical point of view. Studying the market will have you reading the news, charts, and graphs all day long, but it will be worth it. You will then be able to predict how particular option assets will behave over time, which will help you make some well-informed decisions.
#7. Watch the news
This might seem like a redundant piece of advice until you learn just how important it is. If you stay tuned into the newscasts, you will be able to catch the breaking news about the condition of the market. Furthermore, you will get a clear view of the situations as they are right now, making it easier to trade if and when the markets will crash. If you manage to understand the reasons why the market changes then you, as a new trader, will be able to corner the market should it rally or crash.
#8. Hedges? Not so sure
There’s a general belief that hedging trades against each other increases their profits. In fact, the results are quite different. Statistics show that hedging trades will just decrease your likeliness of earning more profits rather than increasing it. What’s the tip here? Think twice before you hedge your trades, especially if you’re a beginner investor.
#9. The demo account
Before actually starting to trade with binary options, it would be a good idea to practice by using a demo account. The great thing about them is that they allow you to trade without losing any money. Most of the today’s broker platforms give you the opportunity of opening a demo account with them. They also give you a ‘fake’ sum of money, typically up to $50,000. You can use it to trade according to your will.
However, make sure you keep everything as close to reality as possible. Otherwise, the results will not be conclusive to you or your experience as a trader. If for example, you trade in binary options using the entire sum they put at your disposal, meaning the $50,000, and then, on your live account you trade only $1,000, then your experience from the demo will not have helped you at all.
#10. Have fun!
Although we left it last on our list of binary options tips, fun should not be the least. It’s tremendously important for you to try and have fun while doing it. Otherwise, it will become a drag and a bore. Studies show that if a particular trader has fun and is constantly entertained while he or she is trading, then they will be a lot more inclined to pay attention to it and make all the right choices that will end up in significant profits.