Just because you're a newbie, it doesn't mean that you have limited chances in becoming successful. You can pave your way to reach that success phase even from the earliest stage. By learning the things you should and should not do, you're already on the right track in achieving your binary options trading goals.

Binary options, a simple trading method with high potential returns has attracted many new traders who are full of hope of earning high profit in a simple way. There's nothing wrong with that kind of dream, as binary options is indeed easy and able to give hundred percent of profit. However, it's not as easy as many newbies think, as they often find troubles in their early days.

It's not a surprising matter though, as most of them tend to ignore the risks and focus solely on the good side of binary options trading. Beginners underestimate trading risks even further when they think that it's normal for amateur traders to lose. They tend to consider it as a result from lack of experience rather than failure to protect their options from trading risks. In fact, newbies should learn to know about trading risks and how to overcome them from the very beginning. Experienced traders don't come from just doing what's best to garner their profit, they also have their set of rules to always maintain their risks in every option they placed.

succesful beginner in binary options

Acknowledging only the positive prospects is not enough if you want to be fully safe in binary options trading. Information about risks and how to avoid them are obligatory for you to learn if you don't want to be a typical beginner in binary options. Just because you're a newbie, it doesn't mean that you have limited chances in becoming successful. You can pave your way to reach that success phase even from the earliest stage. By learning things you should and should not do, you're already on the right track in achieving your goals in binary options trading.

 

The Don'ts

Errors in newbies' trades are usually made by misconceptions and unprepared trading psychology. There are some general mindsets and bad habits that you need to avoid so that you can develop a good trading system.

 

1. Trade Aimlessly

You'll be surprised that inspite of a lot of warning from trading sites and masters to always use strategy when placing options, there are still a lot of traders out there who open their positions just because they feel like doing it. This instict-based trades are more likely to go out-of-the-money, a situation considered as bad luck, as there's no proper analysis in placing those options. On the other side,  in-the-money options are more of a good luck, rather than some perfectly calculated options which are purposefully placed in order to get a certain amount of profit. Well, if you're going to test your luck, then your trading is no better than gambling.

Professional binary options traders always set their goals in every option they place. Options are fixed with definite times, capitals, and trading instruments set to realize their goals. Meanwhile, aimless trades are performed in uncertain conditions. Traders with no goals place their options whenever they want to, where some of them trade binary options to spend their free time.

If you want to start your binary options trading career in a good way, never try opening a single option without any certain goal. You need to discipline yourself and set rules for your trade like how many trades you will make for a day, what times you will enter the market, which instruments you will choose, and what kind of strategy you will use for each market condition. Entering the market in a consistent manner helps you create a good trading system to deal with uncontrollable price movement.

However, good preparation doesn't automatically guarantee your option to be always in-the-money. There will be times where your strategy goes wrong and your options fail. When you are prepared with good trading system, you can evaluate your strategy and learn what you should do to avoid things that have caused you lose. In the other hand, aimless trades will bring nothing but bad luck when some of them are out-of-the-money. There will be nothing to learn from lost options in trades like these, as there are no certain settings that you can fix to improve your next trading.

 

2. Let Your Emotion Take Control

If you find yourself repeatedly trying to re-enter the market just after your options fail, it is a sign that your trading is starting to be influenced with your emotion. Although seems hard, you need to try your best to place an option without being too positive or overly sceptic. Both emotions are only good if applied normally, but putting too much emotions will distract you from your earlier plan to base your trades on analysis results, especially when one of them outweighs the others. Since emotions are not some machines that you can set whenever you like, you have to be able to hold yourself back when being too confident, avoid trading if your optimism is low, and admit your loss when your option is out-of-the-money.

Keeping your emotions in check is a very important aspect in binary options trading. When you trade with emotion, there will be very little assesment in what you should do in placing an option. Generally, traders tend to ignore rationality and can't see past their clouded judgement to make a good trade. It's better for you to manage your emotion  when you feel that it's getting in the way.

Say you have an option placed with $100 capital and 50% rate of profit. There's no refund if your options fail, so the payout will be $150 if you win while you will lose all of $100 if you lose. When you lost that options and can't admit that there's something wrong with your trading analysis, your denial will make you think that another option can redeem that loss, by trading another option with double capital ($200). But what about the analysis? Can it really bring back and double up that initial $100 capital? What if you end up losing all the $300? Mostly, traders in denials don't even think about strategy when placing a second option. Evaluating earlier trades, analyzing the market, and placing a good risk management are important for every option you will place.

Not only in lost options, emotions can corrupt your analysis even before an option is placed. In this case, you tend to ignore risks and trade carelessly when you're too confident with your trading skills. there are also moments when you're not having the courage to actually place an option when you're being too pessimistic. Hence, it's necessary for you to practice trading with controlled emotions as it's also a good step to begin your successful journey in binary options.

 

3. Place Too Much Capital in One Option

The notion of being able to earn quick cash in binary options has filled many newbies' dreams to gain easy money. In fact, online trading has drawn many young traders with its easy work and high potential in return. The later part is especially interresting since traders can get high profit even with low initial deposits.

No matter how much you want to gain high return from binary options trading, never place a capital without money management. Even if you have the best trading strategy in the universe, you won't be able to get rid of risks. Market is unpredictable, there's no trading system and strategy with 100% probability of success in this world. You can maximize your chance by improving your trading skills, but there will stiil be posibilities when you make wrong moves and lose your options.

Therefore, you can't place any single option, no matter how promising it seems to be, without any attempt to limit the capital. The most general portion of trading funds made as one options' capital is between 1/15 to 1/20. You may set your own percentage of capital taken from your whole trading cash, but you should never try to break that limit if you want your trading account to last long. Whatever the number is, make sure that it's the amount of loss you will be able to let go. Emotion stability depends a lot in this matter as you will find yourself placing other options to if you can't handle your loss. Consequently, your options will be prone to mistakes as they're not completed with proper analysis and is heavily influenced by your desire to get back what's lost.

 

4. Giving Up Too Early

Even after you have done every precaution and manage to get rid of every little things which can endanger your options, risks of losing is still unavoidable. Beginners are reluctant to learn from their mistakes and see what they can do to improve their trading. They often give up easily when they suffer loss, especially if it's from a carefully prepared options that take a long time to analyze.

There's no succeess without failure, and it also applies in binary options trading. As long as you're still equipped with excellent trading plan, you can keep improving aspects in that plan to increase your profit. If you're worried about losing a big amount of money, try demo account first, or limit your capital as minimimum as possible.

To make it easier, just consider your first deposit as a learning cost. If you can keep it minimum and try your best at finding the right trading system, you will realize that the first deposit is also your first investment to gain more profit in binary options trading. The key is to be consistent with your goals, emotion control, money management, and your best efforts to keep learning and profiting from binary options.

 

The Do's

Not only the forbidden acts, becoming a successful beginner is also furnished with a list of things you should do. If you really want to have a good start and promising future in binary options, you'd better not brushing off these points as mere suggestions. Instead, it's best if you can do all of the things mentioned in the list below:

 

1. Focus on the Process, Not the Result

To be a novice is to learn as much as you can. Every little aspect that you can learn from is precious even if it takes a lot of effort just to acquire it. What you can learn in binary options trading is clearly not how much you can earn, but how come you gain the profit. Focusing only on the number will drive your trades into bigger risks while paying more attention to the process will help you discover the right way to obtain the profit consistently.

 

2. Choose the Right Instrument

A Wide range of choices can simply put newbies into confusion if they haven't settled with any of trading instruments before. The best way to consider the best trading instrmument is by its liquidity. Forex have the best liquidity among other instruments in binary options. Biggest trade volumes and market availability for 24/7 have made forex as one of the most suitable instrument trading for newbies in binary options trading.

Unlike in spot forex, close positions are determined preceedingly in binary options. It means that you have to be able to predict a pair's volatility in an exact time to earn some profit. If you trade forex in binary options, placing options in busy market times will increase your chance of earning high profit. Even though it's usually unsafe, perfecting your trading strategy and money management may help to minimize the threatening risks.

 

3. Practice in Demo Account

It's always important to test the trading circumstances before you actually deposit your real money and manage it as your trading capital. If you're not careful with your trades, your trading cash will always be in the risk of losing. But, it's different when you have a good trading system and risk management, as your trading funds will be positioned as an investment rather than a bet.

In developing that trading system, there should be no real money involved in the process. Practice trading in demo account will make it possible, since you can learn, analyze, and practice your trading skills wihout having to risk any real capital. Beginners should make use any of demo account offered by their binary options broker. There may be some brokers providing different types of demo account in binary options, but you can still make the best of them by paying extra attention to their terms and conditions, or ensuring that the brokers offer low-risk, easy-to-practice trading and have convincing regulations.

 

4. Improve Strategy, Minimize the Risk

There are many kinds of different trading strategies in regard with binary options trading. There's no need to learn about every single one of them, but you definitely need to employ what you think will be the best one for you and generate it as a tool to decrease your trading risks.

One of the most well-known trading strategies, hedging, is capable of turning your loss into profit if you can manage it perfectly. This strategy type is initially used to cover the loss from a losing option.

For example, you have a put option placed with a $100 capital which will expire in 10 minutes. You see that the price will not going any lower than the strike price, for it's been rising up from the past hour. After performing some analysis, your put options will be definitely out-of-the-money, since the result shows that the price will continue to rise at least for the next several hours.

You then decide to hedge your options by placing a call options with the same amount of capital and 10 minutes of expiry times. If your previous analysis is correct, you won't lose any money, but won't gain any profit either. In this case, you can choose to place bigger capital, like $300, to make sure that there is a profit of $100 when both options expire. Surely, you need to be 100% sure that the second options will end in-the-money. Otherwise, your lost will be increased if the second options is the one that fails.

 

5. Use the trend

Every trader should look for a trend movement if they want to win big. But it's not the only reason for a newbie to learn trading with the trends. A trending price movement is a condition where you can easily trade by following or opposing that trend.

If you want to become a follower trader, you should learn to focus on studying about trend continuation and reversal probability. Meanwhile, you should learn more about reversal and only count trend continuation as a strategy to anticipate trading risk if you choose to be a counter-trend trader.

 

Avoid The Don'ts, Follow The Do's

Don't let your newbie status determine your capabilities. It's you who can decide for yourself, whether you want to be a generic beginner like others say, or a serious novice who makes sure to avoid amateur mistakes and practice the trading strtegy in every step you make. Considering that binary options trading is a simple trading method to study, you should be able to master it easier. Ifyou're highly motivated to become a real trader and is able to aknowledge the risks, there's no reason for you to be unconfident with your chance of success even though you're still a beginner in binary options trading.