Binary options trading

Binary options trading can be a good way to make a lot of money in a short amount if time. Unfortunately they can also be a good way to lose a lot of money in a short time. A lot of would be traders start trading with binary options without the necessary knowledge and end up losing money. A large percentage of all traders will initially lose money. The main reason for this is that they start trading before they are ready to do so and that they ignore the tools the broker provides them with to help to learn binary options trading before they start trading. Not using these tools is a big mistake.

Get rick quick

It is all too common that people start trading binary options because they think it is an easy way to become rich. This is a result of aggressive marketing and the traders desire to believe this marketing. They do not doubt the fact that binary options is the secret to get rich quick. They chose to believe the dream instead of learning the truth.

It is possible to make a lot of money trading binary options but it is not easy to do so. It takes effort to become a successful trader. Successful traders spend many hours a day analyzing the markets to be able to skillfully chose which options to buy. If you are not willing to do this then you should not trade binary options. Binary options is not something you can do halfheartedly. You either devote yourself to it, to become successful or you will fail. If you are not devoted to it then you will lose money. Only the best traders earn money.

Discipline

You will need to be a very disciplined trader if you want to make money with binary options. All options are designed to make the broker money. You need to skillfully pick which options you should buy. You will need a high percentage of the options you buy to mature in the money. The percentage to break even ranges from 56 – 65 % among the most popular brokers. You need an even higher success rate to earn money. Your goal should be that 70-75% of all options you buy matures in money. To achieve this you need to be disciplined and only buy options that you calculate to have a very high chance of maturing in the money. Do not fall for the temptation to buy options that are less likely to mature in the money. It is better to not do any trades than to make poor trades.

Your focus should be on your net profit. Not on your gross profit or on the number of successful trades you make. The net profit is the only things that really matter. Every thing else is unimportant because it will not earn you money.

Important tools

In the beginning of this article I mentioned that most brokers provide tools that are designed to help you learn how to trade binary options. These tools range from study material to a demo account. The study material is often good and well worth a read but it is the demo account that is the most valuable tool you got as a new trader. The demo account allow you to trade with binary options using virtual money. This allow you to learn how to trade and try different strategies without ever having the risk any of your own money. It is an excellent way to avoid losing money when you first start trading and I can not overstate how important it is to use the demo account when you first start trading.

The demo account remains a valuable tool once you started trading using real money because it allow you try new ideas and new strategies 100% risk free.