Everyone is making mistakes; don’t make the mistakes only those, who do nothing. Unfortunately, perfect tutorial on binary options trading is not published yet. There is no book giving an advice for all situations you may encounter trading with binary options. Nevertheless, we have tried to describe the 8 most common and most disappointing novice trader mistakes in binary options trading.
The most frequent erroneous misconceptions of the beginning traders.
Mistake number 1: Register, make a deposit, trade!
If you have no experience in trading with binary options, or FOREX, you’ve never seen graphics and do not understand the difference between euro and dollar; then the sequence of your actions should look like this (for example): registration, making a deposit, EDUCATION, trading!
Absolute beginners should for two or three weeks to monitor economic news to choose the most understandable assets, where their movements are most accurately coincide with the forecasts of analysts. It’s important to explore the platform and clearly understand the meaning of each button and function. And only after that trader can start trading.
Mistake number 2: short positions means easier to predict!
We are speaking about expiry time. Most novice traders, faced with necessity to make predictions, focus on the short option with mistaken belief that they are easier to predict.
Short-term options, such as “minute” – is trading on the market noise, that is very difficult to predict, and sometimes even impossible!
Follow the dynamics of prices over a longer period is much easier. Take a look at the semi-annual schedule of any asset – you will clearly see stages of growth and decline on this chart. It can be done even by a schoolboy.
Mistake number 3 – Start account types are for novice traders and VIP account are for the professionals.
Everything is quite the contrary. Starting with a minimum deposit of $ 200 and without proper training you will very quickly lose your money, even if you’re armed with a “magic” strategy from the Internet. Only an experienced trader can take the risk of trading with such a small deposit.
First of all, VIP account – is a set of additional bonuses and privileges that make it easy to trade. For example, you can consult with a personal manager or get daily analysis of assets. Broker’s specialists will show you a platform, teach the basics of analysis and provide the best trading conditions. VIP status does not oblige you to trade with a broker for life. You do not owe anything to anyone! Therefore, if you can be a VIP client – be it. Or, at least, do not start with a minimum level!
Mistake number 4 – The more is the better.
Until you understand the market, you should avoid from multiple trades opening with different assets in the hope that at least something will give a plus. Such strategy will clear your balance.
You shouldn’t spray your attention to all assets represented in the list of platforms. The correct solution is to choose one or two assets to work with. You can extend the range of assets at a later stage, when you are fully familiar in the market and get some trading experience.
Mistake number 5 – Casino, casino, casino!
All of us saw films about the casino where the losing player increases the bet and eventually moved all-in, putting all that’s left on the last card. No need to repeat such a risky trick. Correct tactics in trading with binary options is the following: if you having a plus – increase the bet, if you are losing – Reduce it!
Mistake number 6 – Hit the jackpot!
Trading at financial markets involves risk. Do not give in to passion and do not use a trading as a solution to your financial problems. Investment into one option contract over 20% of the deposit is unacceptable from money management rules.
It is better to win a small amounts, but on a regular basis, not missing a good days for trading. 100 successful, small trades are better than one good and expensive. Indeed, in the first case, you get more experience, and it is priceless. In the second case you risk to lose the entire deposit.
Mistake number 7 – Verification can wait.
All licensed brokers have the rules that before withdrawing of your money you need to pass the verification, namely to send documents to prove the identity. Consider this procedure with the utmost seriousness and pass it immediately after deposit. Trading will be more comfortable if you know that at any moment you can withdraw money quickly and without delay.
Mistake number 8 – I lost the first deposit, so it’s not mine.
95% of beginners lose their first deposits. If you have read this article, then you have a chance not to fall into this statistic. If the bitter experience has already happened, maybe now you realize some of your tactical errors. So, remains to master the market and start to get money!