Top 10 Mistakes When Trading Binary Options

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Top 10 Mistakes When Trading Binary Options Infographic

Top 10 Mistakes When Trading Binary Options Infographic

Trading binary options can be risky for your capital so here are the most common mistakes traders can do, so try to avoid them:

  • Excessive investments – You only get high returns if you bet high and the risk of losing always exists. So please always use the Trading Chart of the simple method for the amount of the investments.
  • Do not trade with non-EU-regulated brokers – Brokers that are not EU-regulated can do whatever they want with your money. You wouldn’t trust someone with your money who only has a paper sign on the door that says ‘bank’ either.
  • Use the bonuses with attention – some brokers offer very cheeky terms on their bonuses so please be warned to read the small lines.
  • Wild asset-hopping – Stocks or currency pairs are assets, for example. Concentrate on a few options types and don’t jump back and forth to whatever seems the most lucrative or secure to you.
  • Watch yourself – Is your mood dependent on the outcome of your trades? Do you keep investing even though you always lose? Careful! With most certainty you’re developing a gambling addiction!
  • Compensate for losses – This is typical gambler thinking: I have lost big time so I have to continue gambling to compensate for these losses. If you have had to take big losses, then you didn’t trade right but gambled – so stop it!
  • Emotions – your worst enemy – If you trade emotionally, then you’re going to lose everything – stop it if you can’t turn off your emotions when trading! You have to be as cold as possible, 100% reasoning decisions and 0% gut decisions. It’s very important because especially losses can evoke strong emotions and fears. Fear has always been the worst teacher. You either stay cold with a loss and continue trading with a goal and calculate losses beforehand or you don’t trade at all.
  • One more trade… – If a trade is running out, so let it be. Go away from it and don’t think ‘Oh it’s going up now, I’m going to put a Call-Trade’. Most of the times, that goes horribly wrong and doubles the loss. Put your bet specifically and do something else until it runs out.
  • No Silence when trading – Do not trade if there is fuss around you. You need full focus to trade well.
  • ‘Self-developed strategies’ – You quickly get the impression in trading that you have developed a ‘winning strategy’. Usually that is NOT the case. The psychology of trading plays a big role here. If you feel as a winner while trading, you will win a lot more often (experience).

Top Mistakes in Trading Binary Options

Binary options are simple trading instruments which generally pay either a high, fixed return or nothing at all. No wonder the word “binary”. Binary Options are the new way of making money the easy way from trading. It provides an online platform that allows you to make an investment right from the comfort of your home. All you have to do is relax and watch your investment grow exponentially. The great thing about binary options trading is that there are no restrictions as to who can trade except for the age and, most of the time, US citizenship. This article will tell you more about when NOT to trade binary options and what are the top mistakes in trading binary options.

Just like traditional options, binary options are available on a variety of underlying assets. With indices, stocks, commodities and currencies being the most popular assets on which to base trades. However unlike traditional options, binaries payout a fixed, known return which is not dependent at all on how far “in-the-money” the option is. In the event that the asset you placed a call option order on exceeds the strike price by so much as one pip/tick then you are paid out the same high returns as if it finished in the money by 100 points.

Trading options that are binary is very easy. However this is if you know the secrets to use to decrease your risks and maximize your profits. Regardless of whether you are a beginner or an expert trader, you still need to learn ways on how not to trade binary options so as to maximize your profit.

How & When NOT to Trade Binary Options?

Below we will list the main items for a trader to avoid when engaging in trading binary options online.

Do not be an emotional trader

One of the biggest problems traders face is emotional trading. If you discover that you are losing control and making more trades than normal, it is advisable to step away. In case you also observe that you are losing trades you would normally win, yet you feel the urge to keep trading, then the time is right to step away. Remember emotional trading will destroy your account!

Do not over invest

It is not smart to invest an amount that you cannot afford. In case of a loss, this will be harmful as it will discourage you from further investment. Start investing in amounts that are within your budget.

Do not day trade (too much)

Day-trading and scalping are usually called high frequency trading, which we never recommend doing. It is only the seasoned professionals that are very successful with this type of trading. Keep in mind that being successful generally means making a handful of the ideal trades every week. Of course, there is nothing bad in making day trades from time to time, but do not overplay it making 100+ trades in one day.

Do not over think

Often times, we see that traders utilize too many indicators as part of their strategy. However, the most successful traders make use of the KISS (Keep It Simple Stupid) principle. You just have to develop a reliable and simple technique that works for you. Speak with your account manager, or register for a VIP account to get sessions with a professional account manager.

In conclusion, after you have spotted most common mistakes in trading binaries and now you know how to avoid binary options losses, binary options hub has just one thing to tell you! The most important thing about binary options trading is to know when to trade and when not to trade in order to avoid binary options losses. Also, choosing one of the reliable brokers is a crucial thing in binary options market. Remember, only you decide how to trade and nobody can force you to do something you do not want to.

Top mistakes in trading binary options

All types of trading, including binary options trading, have a lot of common ground. Whether it’s ordinary trading or forex trading. Everyone, who has been involved in any of the types of trading, knows about the risks that each market participant will bear. But without mistakes, a trader can not get valuable experience and develop his winning strategy. In spite of that, there are still a lot of accompanying factors that will influence your trading. To reduce the damage from trading binary options, check out our top of the most common mistakes that traders make. After reading this information, review your trading methods.

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Avoid mistakes in trading is almost impossible, because they are an invaluable experience. The more experience you have, the easier it will be for you to trade in binary options world.

But there are many, so-called, typical mistakes that traders make in the process of trading. They need to be minimized. And trading binary options will be much better.

Our hit parade consists of the most common mistakes:

Making big deals or waiting for a miracle

Almost all novice binary option traders make this mistake. Some of them try to break a big jackpot after a series of winning trades. Others, on the contrary, want to return the lost money. All these operations, as a rule, go beyond the scope of their trading account. In trading binary options, you always need to follow the plan of your actions. Long-term planning of your trading operations, skillful management of your risks and capital will give you a much better result. Avoid transactions that carry greater risks and amounts of money that go beyond your trading strategy and account. The probability of success in such transactions is extremely small. To prevent loss of capital, study management methods. Risk management, hedging, also, no one has been canceled.

Carrying out trading operations through unverified brokers

To start successful trading binary options, each trader faces a choice of a broker. But not everyone pays enough attention to this. How to check the broker. First, you need to see if this broker has a license to carry out its activities in your country. But the broker may lose the license, so this factor should be taken into account together with others. One of the most important is the age of the broker. The longer the broker in the market, the safer it is to deal with it. You have to read a lot of reviews about the broker you are interested in. You have to trade on a demo account, check the level of support. Do not immediately rush to invest your money. Test everything before you get started.

Promotions and bonuses

Market counts a lot of brokers who provide bonuses or additional insurance for your investment. Most often this type of insurance is applied from a certain amount of the transaction. All these tasty things should encourage you to start trading. Often this is the main case to hurry up and immediately start trading. First of all You need to focus on the process of trading. To begin with, you will need to learn the basic things in this branch. For such purposes, it is best to use a demo account. So you can save the broker’s bonuses and extract from them the maximum benefit with real trading.

By focusing on getting bonuses you will have the risk of losing your initial deposit. That’s how to appear another disgruntled man trading binary options, which will run to write an angry response, feedback or comment.

Lack of concentration

Many traders in pursuit of money try to master all the strategies in one day. And then they run to apply them in practice. As you probably already understand, it is unlikely that they will succeed. Haste in this matter is not needed. The key aspect of trading binary options is the definition of specialization. To do this, you need to stay on your favorite asset, learn about it all the necessary information and become an expert on this asset. Only in this case can continue to study other assets, strategies and other training materials.

Remember always, in trading with binary options you do not need to hurry. You will have plenty of time to try all the strategies and types of assets.

Trading on emotions

Self-control is one of the most important qualities of a trader. But sometimes everyone is inclined to make emotional decisions. And, as you understand, this will be badly damaged by the result of your binary options trading. If you notice that you have got into excitement or have opened a position in the hope of seeing a miracle, then you will not see a miracle. Moreover, often so traders spend all their invested money. Remember, trading binary options is not a casino. Here luck accompanies those who are able to make decisions with a cold head. The market does not understand the language of emotions. To succeed in trading, always keep them away. This will give a chance to trade much better. Also you can avoid unnecessary losses in the process of trading.

Trading to the last cent

The feeling of excitement of many traders contributes to their rapid failure. Since many of them consider it a matter of principle to bring the trading process to the end. A large percentage of traders do this on emotions. Many of them do this under the influence of Martingale’s strategy. But this strategy is not appropriate using it for gambling on the part of the trader. Apply this strategy, like all others, with the mind. Many binary options traders also begin to trade until the last after a series of successful deals. Because they think that they will be lucky this time too. This kind of trading sooner or later will lead to the ruin of the trader’s trading account.

The lack of a logical structure of the trade process

Set up the logical structure of trading at first glance is not difficult. But the trader will face many difficulties, namely the emotional side of each person. Reactions to positive and negative results affect the course of trading, as they affect the emotional makeup of each person. To adjust your plan to the trader, you will need to perceive the trading process as a job that he must learn to perform perfectly. And as we know – all our mistakes are nothing else but an experience. Building a logical structure will make our trading even more profitable.

Insufficient market analysis

To obtain a stable profit at a high level, you need to constantly analyze the market. The best way to analyze it will be daily market reviews. This will help you always be aware of what is happening with your assets. Actively follow the latest news on the analysis of the markets you need. This daily “communication” will give you the opportunity to acquire a lot of ideas, and discipline and patience will help you to succeed in trading with binary options.

Chaotic actions

Money loves silence. Everyone knows this proverb. In trading, the same rule applies. To bring bright thoughts and images into your head, you need to surround yourself with an atmosphere of tranquility. This will give you the opportunity to take action according to the plan by which you are bidding. In this case, you will not have to wait long for the profit.

The use of questionable strategies

Strategies for trading binary options are quite a lot now. It is difficult for a novice trader to choose the right one for himself. Many traders actively use independently developed strategies. Some of the traders willingly share and exchange them. It is necessary to understand the moment that those strategies that work for some traders may not work for others. Since each trader has his own strategy. Ideally, you will need to learn and test strategies in order to build on their basis a successful and profitable strategy.

Be ready to work hard. Do not be in a hurry to get upset after the first failure. Remember that all strategies behave differently with a certain type of assets and in a particular market.

Conclusion

There is no limit to perfection. Trader binary options need to work well before finding a good strategy. It takes a lot of time for traders to find and improve trading strategies for binary options. All beginners need to remember that there are no ideal strategies. We need to constantly work on them, so that strategists are always relevant. Do not be afraid to make mistakes, this is an experience that in the future will bring you money. Revise your binary options trading process after reading our top of the most common mistakes. Preventing them will help you succeed in trading binary options much faster.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker 2020!
    Free Trading Education!
    Free Demo Account!
    Perfect for Beginners!

  • Binomo
    Binomo

    2 place in the ranking!

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