Money making is no game, said the wise…
Experienced traders know this well - binary trading could hardly be economically profitable if performed in the absence of deontologically compliant moves. As such, what are the things traders should bear in mind?
Video-ads generally depict trading as a pleasurable retreat where one has to just sit back on a cozy couch or a holiday destination with coffee or champagne in one hand and a mobile phone in the other and just chose among market eventualities as if it was as simple and relaxing as playing ‘candy crush.’ The fact is that we would all have loved to trade so easily and in such a fun style and earn unconditionally. As a thirsty would rejoice a mirage in the desert, a new trader would rejoice the aspiration of such a lifestyle which is, however, far yet to be readily realisable for along with capital investment, intellectual investment is prerequisite too.
On a much optimistic tone, binary options is sure to be a potential lucrative venture which, yet, requires well calculated decisions to really turn into one. Therefore, being a calculated science, it requires one to be well conversant with and educated in not only trading etiquettes, but also in various technical and strategical analytics. Similarly, there is a series of foul steps to be avoided too. If trades are effectuated taking these factor into consideration, the outcomes would normally be redeeming.
1.Choose the right broker
If you would discover, on a fine morning, that you just got yourself and your money stuck with a scam, you would probably feel as the dumbest person on earth. Do not let these scams trample your self confidence before you even start making money from trading. The very first thing an intelligent trader would do is to verify whether the broker he or she endeavors to invest in, is a credible one or not. Good things come with time, patience and wisely channelled hard work and determination. As such, before one chooses to enter in monetary transactions with any online binary options broker, one has to do thorough research about it and give it the green light after that. Well, the most instinctive and basic thing to do is to go through reviews on the broker and critically analyse them and see whether it provides security via credible protocols. So get a hold on your excitement, chill and take your time to invest wisely and cautiously in any online broker.
If we go by the definitions, binary options is alluded to a trading method whereby you would have to only speculate over the probable trend of a given asset. Yet, one can speculate anything he or she wants to and that would not necessarily have to be right. If trading was mere speculation, anyone could earn millions effortlessly. The reality is that binary trading does involve speculation. Not abrupt speculations, but calculated speculations instead. How to calculate? For that you will have to get back to studies. Yes! Education is the key. Most successful traders are financial scholars and master the very details of technical analytics. Market trends of most assets remain volatile and keeping track of every single movement is vital for the trader. If you think this is not your cup of tea, then you better make it, as you won’t stick around for long as a trader unless you mould yourself into a well informed and well versed news seeker. Keeping track of daily market trends, global economic, political and business events, important reports, releases and meetings, is a trader’s daily kick-start. This is not all in all however. Analysing charts and trends is a science and one has to learn it to find sense in technical analysis and strategic planning. Amongst the various resources available, you should not hesitate to take advantage of the learning materials such as e-books, videos and webinars put forward by most brokers.
3. Capital Management
Binary options trading, along with being lucrative, entails potential losses too. Eccentric as it might sound, one might even go broke if he or she does not invest wisely. If one does not know how to channel and control investments, outcomes can be devastating. Someone taking up to trade, is to start doing so on a part time basis. Trading is not a whole day process. It can be effectuated in parallel with your day job. In fact, it is advisable not to leave a good job behind for full-time trading as capital should not stop flowing in and one cannot guarantee to uninterruptedly receive money from trading on a regular basis. Why? Simply because markets are volatile and predictions can go wrong. A fixed income is therefore important. While trading, one should not invest an amount he or she cannot afford to lose and should rather invest a minimum tradeable percentage of his or her account balance on each trade. Basic as it might seem, it is nonetheless preponderant to set aside capital for all your obligations such as bills and basic needs and trade with the remaining surplus.
4. Know the rules
Know what is in there before you take a dive. Infact, they are the things that mostly go unseen and which are yet, the most vital ones. We are talking about the rules, the terms and conditions. Lots of fresh traders often find themselves into problematic situations regarding their funds because of careless attitudes. Availability of bonuses, free opening amounts, tools and other luring offers, come with terms and conditions and to be able to make profitable use of these, one has to thoroughly know all the binding conditions. Judicious and conscientious use of any tool or service, is a must. Know your tools well and make sure to use them only when they should be and if you did not yet delve into the terms and conditions imposed by your broker(s), you better be getting to it real soon.
The wrong turns
1. Giving in to emotions
Irrationality is detrimental and being able to encash a shiny luck, is a ‘once in a blue moon’ event in binary trading. If one thinks he or she would be able to make it big by just relying on emotionally triggered decisions, then that person could soon regret his or her intuition. Basically, you should not trade in any way that could possibly entail losses. Predictions have to be well calculated and analysed instead of being based on mere emotional factors. At points where one is unsure about any eventuality and fears the chances of a big loss, giving in to frustration and panic is the least recommended move as it could translate into wrong and detrimental decisions. Rather, taking a pause, reconstituting oneself psychologically, and getting back to trade with more serenity, rationality, self-confidence and accuracy, would be the best thing to do. You will have to always let important analytics guide you rather than being directed by your adrenaline.
Being greedy is unethical in itself. While trading, greed often takes over in a very subtle manner and many may even term it as ambition. In fact, there is a very thin line between being ambitious and being greedy whereby succumbing to greed pertains to obvious losses. Therefore, investing excessively on a trade under the spell of luring profits, is the least recommended thing to do. As such, a reasonable stake per trade is the safe strategy and consistency is what assures success.
3. Depending solely on robots to effectuate trades for you
Auto-trading is the easiest way of trading binary options because the robot effectuate all the trades on behalf of the trader. There is zero to limited interaction required. As the robot is switched on, it automatically scans the market to spot lucrative opportunities worth investing in. However, auto-trading cannot be relied on a 100% basis because these software often lack the fundamental analysis required in trading. Nevertheless, as beginners, auto-trading can prove to be a helpful learning tool. The best thing to do is to gradually mould yourself into an experienced trader while lessening dependence over robots. Still, if ever you would take up to it, be well aware of all the conditions that apply.
Change is certain
It would not be fair enough to ascertain that one abiding by these advices will never see himself or herself in face of loss or failure. Even top traders are sure to encounter regressive phases. Indeed, volatility is one of the most obvious characteristics of global markets and predictability is subject to alterations as they are directly influenced by global political, social and financial events taking place daily. Still, risks should be avoided and basic trading etiquettes such as those you’ve just gone through, are to be considered for implementation.