Binary options trading is a long-term game and you need to play this game carefully. Nobody can guarantee that all your positions will win. Anyone might have unsuccessful predictions. If you achieve a winning ratio of 80%, 20 positions will be lost out of 100.
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How to Avoid Losing Money in Binary Options Trading
Binary options trading is a long-term game and you need to play this game carefully. Nobody can
guarantee that all your positions will win. Anyone might have unsuccessful predictions. If you achieve a
winning ratio of 80%, 20 positions will be lost out of 100.
The goal is to keep your winning ratio as favourable as possible and not to lose large amounts on the
losing positions. It is possible to make money in binary options, but you really need to keep some rules.
In this article, we have collected practices that help you to avoid losing money in trading. Let’s see, what
are the most important rules that you need to keep in mind in this business. Those rules can mean the
difference between winning and losing in options trading.
Do not invest big amounts if you are a beginner trader
As there are different risk tolerance levels, the amount that can be placed on a trade truly depends on
the personal preferences of the trader. Do not forget that the risk bearing capacity of a beginner trader
is usually lower.
If you are a beginner, avoid investing a large amount on one single trade. You should invest only a
certain proportion of your deposit. This should never exceed 5% -10% of your total account balance.
Novice traders should invest sums such as $5 to $10 per trade, and stick to these amounts until they
become more experienced.
Learn about binary options trading strategies
Before you start your trading career, you need to understand the concepts and learn the strategies that
you can apply. You should gain a solid foundation in the theory of binary options trading. A successful
trader has to understand how to read the different charts and how to conduct fundamental analysis.
Trade long-term options first
Until you fully understand options trading, you should avoid short-term options. Short-term options
have very low expiration times, for example 30 or 60 seconds. It is quite difficult to predict price changes
over such a short period of time. In order to be able to do that, you need to be proficient in trading.
If you are a beginner, you should trade long-term options for a while. The expiration time of a long-term
option is several days or weeks. The trends are more predictable for a period of few weeks, this helps a
novice trader to make money.
Focus on mainstream assets
Beginners should focus on high profile assets such as EUR/USD, oil, gold or stocks of well-known
companies such as IBM, Microsoft, Facebook, Apple, or Google, etc. Experts are constantly analyzing
these assets, so you can find many publications on the possible price development of them. You will be
able to make much more accurate predictions on the basis of these publications.
Register at a reputable and regulated broker
Before depositing money at a broker, you should check if the broker has a license. Binary options trading
is regulated in many countries, so there are brokers with valid licenses. You should choose only these
brokers and avoid unregulated brokerages.
Furthermore, if you are a beginner, you should use a broker that allows low minimum deposits as well as
low investments per trade.
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