Binary options trading can be easy, but so can be making mistakes. There are several mistakes made by most of the new traders. Amongst them are, for example, overtrading and failure to observe proper money management techniques (handling of the money on a trading account and choosing the right trade amounts).
Mistake no. 1: Overtrading
I consider overtrading probably the biggest and most common mistake often made not only by beginners but also by advanced traders . Overtrading in the case of binary options means one thing: Traders always want to earn as much money as possible and as quickly as possible and therefore, want to make as many trades as possible. Sometimes it may work out, but I tell you one thing: One day that man trips and loses money.
Always trade according to what you really see on the chart.
Not, what you think you see.
It is important to remember one thing. You don‘t ALWAYS to need use ALL of the signals to be successful on the market. The market is moving without you. And the price patterns are also created by it. So, even though sometimes you think you see a great price formations and the market simply has to turn around, you better think again.
It is always better to do less trades, because when it’s all over and the stock market is be closed, you will never regret the trades you didn’t take, but you certainly will regret the trades you took that were wrong.
Mistake no. 2: Bad money management
Even if you’ve already learned and are not doing crazy 50 trades a day, there is still one thing you have to realize. You should never trade with more than 5% (or, in extreme cases 10%) of your current account. Why? Because you would simply blow your account in just a few unsuccessfull trades. Remember that trading is a long term business. Even if your balance increases steadily by 5 % every day, you’re making way more money than you would with a savings account. And maybe even more than in your regular 9-5 job.
Mistake no. 3: Looking for a miracle
This is also an often touted topic. And I must admit, I was not different at the start of trading binary options. I’ve tried to find the best strategy there is and just download it. I searched for a variety of terms… “Binary options strategy, 15 minutes binary strategy,” and so on…
Looking back, it was stupid. I don‘t know what I was looking for. Probably for a strategy, that will instantly start making me some money. Some can be found on our website (strategy section) or eg. 5 minute strategies on best binary options strategy.com
Does it make sense to look up a binary options strategy? Well, kind of. For me, yes. For newcomers, it certainly makes sense! Somehow, it will make finding and devising trading systems a more pleasant experience. You will learn many things about the Meta Trader indicators, and even learn to estimate the market.
But remember – with any strategy there is, you always have to use common sense.
Mistake no. 4: Untested strategy
The fourth mistake is closely related to the previous point. I advised you to some extent, to look for the strategies and try them. But no strategy is bulletproof, and some are completely useless. Sometimes, this is not possible to determine by simply looking in the history, because the indicators can be repainted. Therefore, I 100% recommend trying all the strategies, with which you want to trade on a live account, on a demo account first. You can find demo accounts at these brokers: Brokers with the demo account.
Free demo account with IQ Option
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Author
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I've wanted to build a business of some kind and earn money since I was in middle school. I wasn't very successful though until my senior year in highschool, when I finally started to think about doing online business. Nowadays I profitably trade binary options full-time and thus gladly share my experiences with you. More posts by this author