A friend of mine advised me that it would be a good idea to write an article dealing with the bad habits of unsuccessful binary options traders. It was a really great idea. There are lots of things that prohibits even better trader from making money. Experience is an important factor that everyone must acquire. Without it, no one will ever be profitable.
I’m not talking only about the experience gained from reading graphs and from trading on a demo account. Sure, it is important. But what makes trading trading is the stress, uncertainty, anger, and on the other hand, also joy and success.
Not adhering to proper money management
In the case of trading binary options, never place more than 5% of your eggs in one basket. 🙂
There are lots of traders who deposit, for example, the sum of $ 200 on their trading account, and their first trade will be in the amount of $ 50. Don’t you consider it stupid? Yes, it certainly is. As we mention in our articles about money management (which I recommend you read here) you should never use more than 5% of your total account balance for one single transaction.
We recommend to use even less than this, about 3%, but it is understandable that not every aspiring trader has $ 2,000 available in their trading account.
Lack of information
e lack of information is not a vice, but I think that it fits this list. There are “traders” who read two articles about binary options on the internet and think that they have already swallowed all the wisdom of the world and immediately flock to investment and entering trades.
To this, I say one thing: Trading binary options may be simple. But I mean it only as entering trades and the accessibility of the actual trading. This means that it is also easy to lose money. Successful trading is a complicated thing, and not everyone knows how to do it. But with some practice and expertise, I believe, comes reward.
Earning hundreds of thousands a day, living on a beach, sipping a drink? Forget about it. I do not believe anyone who tells me that the truck driver came to be a successful binary options trader after only one week.
By this, I mean that you can‘t expect that you will make hundreds of dollars a day. Well, you can, but certainly not when you just got started with trading. Better be careful.
I think that these three things are the main obstacle between the trader and the profit. What is your opinion on the article? Share it with us in the comments section!