Top 10 the most frequent mistakes in trading binary options

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Four Common Mistakes Of Successful Binary Options Traders

First and foremost I want to point out that trading binary options is not a mistake. This does not exclude binary options traders from making mistakes. Especially successful binary options traders. There are numerous pitfalls and challenges to overcome, any of which could turn you from the path to success. This is a look into some of the common mistakes made by successful binary options traders.

The HMAS Success steams ahead no matter what hurdles it faces.

Choosing The Wrong Broker is a very common mistake. I know, I’ve done it. There are just so many to choose from and many of the ones you find are simply full of crap. There is so much glitz and glam about how binary trading is the wave of the future, easy to do and a sure path to making thousands of dollars or euros in the blink of an eye. Once you get past that the task only gets harder because you have to wade through the mire of regulated/unregulated along with the differences between different platforms and brokers. Just because a broker says “hey, we have standard digital binary options” doesn’t mean squat until you dig deeper and find out three things; what assets are actually traded on the platform, what expiries are available and if there is an early out feature.

Thinking that trading is easy is a common misconception and one thoroughly exploited by affiliate marketers and shady brokers. Trading is not easy, it takes time and knowledge to become successful. This does not mean it is impossible, if it were impossible no one would do it. In the same vein if it really were easy then everyone would do it and everyone’s not doing it right? So, trading is fun and can be fun but if that’s all you think you are going to have a really bad time. By bad time I mean lose all your money. A successful trader will know going in that trading is a challenge, or quickly realize that it is. This knowledge, self awareness, is one of the motivating forces that spur the successful trader to apply themselves to the task at hand.

Losing patience is a lesson taught to every trader. Too bad they don’t all learn it. Patience is that act of waiting for a set of predetermined conditions to happen. Sounds familiar right? That could be found word for word in an article on strategy right? “These are the predetermined conditions, now wait for them to happen”. Losing patience means becoming angry, unnerved, anxious or hasty of decision. It means not waiting for the right conditions and allowing emotion to dictate your actions. It means making bad trades because you don’t wait for the signals to come, in effect when you lose patience you lose money and having patience means having money.

Getting discouraged is also very easy to do. Trading is hard and you will lose money. For some more than for others but the fact remains, you will lose money. Losing money leads to frustration and even more losses if left unchecked. The fact also remains that no matter how much you lose, you can come back, with perseverance. Regardless, successful traders may get discouraged but they do not quit, they may take a break to regroup or save another stake but they do not quit. Quitting means the market beat you, it won, if you quit you can never be a winner.

Quitting Is Not An Option

I’ve been trading a long time, a lot of different types of instruments, even the option to quit. It is there every day, at every juncture, you could just throw up your hands and give it up. Successful traders feel this feeling the same as unsuccessful ones, they just handle it differently, they don’t quit because it is not an option for them. There are many mistakes you could make but so long as you learn from it you win in the end. It is not a mistake to choose the wrong broker if you learn from it and then pick the right one. It is not a mistake if you start out thinking trading is going to be easy and then endeavor to master it when you learn otherwise. It is not a mistake to get discouraged if you lift up your head and march back into the fray. It is not a mistake to quit for a time, if you come back and kick the markets ass. The only mistake is to let the market beat you because if you do that you will never be a winner. Successful traders make all the mistakes that unsuccessful ones do, they just bounce back in a different way.

Types of binary options: which is the most profitable to trade?

Types of binary options – the more profitable to trade?

According to one independent expert, Binary Options, there are even weather changes. In his own words, he wanted to emphasize that the terms of option contracts can be absolutely anything. However, brokerage firms offer the average trader, as a rule, the following options.

Type 1. Above / Below Options
The most popular type of option contracts. The trader assumes that the price will be higher than the current value, or lower. For example, if I buy the option “higher” and the American currency will rise in price at least by a penny – my profit. Instead of the dollar, there may be a bitcoin exchange rate, and indeed, anything.

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Transactions of this type are recommended for both beginners and professionals. Price fluctuations can be predicted based on simple technical analysis methods, so there will be no particular difficulties in trading.

Another important point. “Higher / lower” is a fixed-income option: the trader’s earnings do not depend on anything, he is taken for granted, unlike the contracts of the following type.

Type 2. Touch Options
It is necessary to predict whether the price will affect a certain time interval of one or another level (most often there are two of them – above and below – you need to choose any). The price will stay outside the level or not – it does not matter (but sometimes this parameter matters), the main thing is that the touch is fixed.

Agree, it’s more difficult to predict the movement, and therefore the stakes here are higher. If you plan to trade touch options, read about measuring average volatility (volatility).

Type 3. Simple Barrier Option or Range
A complicated version of the second type of options. Now the price should not touch one of the levels, but hold on to it. The trader predicts whether the price will be above the upper or lower level to the expiration date.

So, there are three types of options – with one level, with two levels per touch or “step over”. All the rest of the variety that is found on the sites of brokerage firms is a derivative of the three species we have examined.

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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