5 mistakes of beginners in binary options trading
The fact that the trade binary options is gaining popularity among traders - it's no secret. Quite simple use of these tools, as well as relatively high profitability in a short period of time attracts both professionals and, of course, beginners who do not want to delve directly into the complicated theories of trading stocks or currencies. However, free cheese is only in a mousetrap, because high profits are followed by considerable expenses.
Any financial trading needs to be learned by practicing your strategy in one way or another. In this article we will look at The main misconceptions and mistakes of novice traders, trading binary options. It is quite possible that if you pay more attention to our tips, they will help you to avoid some unsuccessful deals.
Trading binary options requires no knowledge
We have already touched upon this misconception in the beginning of the article, but it is worth repeating it. Many newbies in trading, confronted with the work with binary options, discover that they do not need any special knowledge about them - just think where the price will go, press the button and wait. I want to note that even the most basic knowledge about the price formation of the asset, at which the option is presented, will greatly reduce your losses. Not to mention that ideally to trade binary on currency pairs you should have a proven strategy and experience of trading on . Either way, any forecasting skills should increase the profitability of your investments by reducing losses.
Binary options are almost a casino
Many players come to binary options trading as a casino, focusing on the fact that the instrument is actually a "betting" transaction. We are not going to say that this is completely wrong - there are still some similarities, but a little practice and knowledge in the analysis of exchange instruments, and betting on luck turns into sound strategyThe "50/50 chance of winning" is a more attractive figure.
If you came into binary options trading for the adrenaline and fun, then understanding the process will not reduce your pleasant emotions, but only increase them, because you will start to open trades wisely. Do you agree? Then read the first paragraph of the article again.
3. Short-term binary options are more profitable
Yes, of course, it is very tempting to buy a 60 second option contract and make 75% profit in just one minute. However, it is important to understand that it is not so easy to make money on such short (one minute, one hour) intervals, because the noise on the market can in one second to turn an absolutely profitable contract into a minus. Trends over long periods are much more predictable, and therefore it is better to start with them, not to chase the fast and risky profits and learn to see the market.
4. Fast transition to high stakes
Quick and easy profits often give rise to euphoria among binary options trading beginners. After making 2-3-5-10 profitable trades on small amounts, the trader begins to think: "Why am I trifling if I can buy a contract at a higher price and get more money? Remember, it is possible to make a loss on the 11th trade. Of course, we are not saying that this must necessarily happen, but The value of the contract should be increased graduallyusing about 2-5% of your total deposit. Only in this case the profit will settle in your pockets steadily.
5. Trading only one type of binary options
As we found out in the last lecture, there are quite a few binary options, each of them can be applied to different market situations, so you should not get hung up on one thing when you can use all the opportunities of the market and binary options. You don't have to get actively involved different optionsBut we recommend to try different options and choose the most acceptable for yourself.
Surely, many of you have found 1-2 (or maybe more) mistakes, typical for yourselves. It's important to acknowledge them and move on, develop as a trader and strive for high results, and then many things will start to work out much better.