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Pro Tips for Newbie Traders: 20 Essential Tips for Binary Options Traders

Pro Tips for Newbie Traders: 20 Essential Tips for Binary Options Traders

In this article, we will look at some simple but very important tips from experienced traders that will allow novice traders to avoid mistakes in the early stages of learning to trade.

Don't rush to trade

Do not rush to trade - the market was yesterday, exists today and will work tomorrow! He won't get away from you. Your main task is to form a foundation of knowledge, which, in the future, you can develop in any direction.

Only fools and gamblers are in a hurry to trade. For an experienced trader, trading is a job, and this job carries high risks. Trading must be approached wisely - only in this case you can achieve high results.

If you are a beginner trader, then invest your time in gaining knowledge. Knowledge has never been superfluous and is the main weapon in the hands of a trader - it is knowledge that determines how quickly you will succeed, and how much you will earn in the end.

Trading is a profession, and quite difficult for many. Trading allows you to become financially independent, but at the same time, learning takes a lot of time. Do not think that you have become a Guru already in the second week - for many it takes several years, after which the training continues.

Trade your head

Always trade only with your head! All your actions and their consequences are only your merit. Never use:
  • Trust management
  • Dubious PAMM accounts
  • Trading signals
In 99.99% of cases, you just give away your money without a chance to get it back. On the other hand, if you trade personally and take risks, then your experience will only accumulate. This will allow you to avoid mistakes in the future and reach a new level of earnings.

The same applies to Trust management, which is promised by managers of different brokers. The broker makes money on your loss, so why would the managers of this broker profitably work for you?!

A year and a half ago, managers of various brokers called me very often and promised fabulous amounts if I would use their “unique” trading method or “mega-profitable” trading strategy. But for some reason they hung up after one single question - “Why, having such a guaranteed income of millions, are you yourself sitting in a call center of some basement, choking on a salary of 20-40 thousand rubles, and not relaxing in the Maldives?” .

All risks in trading are solely on you! You are responsible for any of your actions, and the world is now arranged in such a way that every 3rd person wants to get more money out of you. And if you yourself fell for fairy tales about quick money, then you can only blame yourself! There are simply no fast ways to trade!

Trading on a Demo account if you have no trading experience

I, like most experienced traders, agree that a Demo account does more harm than good. But at the same time, the Demo account is very useful for novice traders who are completely 0 in trading.

A virtual account will allow you to understand, albeit simple, but at the same time, the basic rules of trading and get the first experience. However, the price movement is the same when trading on a Demo account and when trading on a Real account.

There is absolutely no trading psychology on the Demo account - there are no fears of losing everything, which is why trading on them is so simple and profitable. This is the main disadvantage of the Demo account. It is not worth dwelling on it, but still it is better to get the first knowledge on this account - all of a sudden you will realize that trading is not your thing at all and there is nothing to do here, and the Demo account will help you avoid financial losses.

You should trade on a Demo account for as long as you understand the basic principles of trading, how the price moves, how the trading platforms of brokers work. After that, you should switch to a real account and trade only the minimum possible fixed rate.

Early success is bad

Beware of early success. Of course, it’s good when everything starts to work out for you in the first couple. Beginners are lucky even in trading. But, the more you believe in your success and your strength, the stronger the disappointment will be when your luck runs out.

Most traders learn from their mistakes - correct their shortcomings. Therefore, it is very important to soberly assess your strengths and start improving your trading. The law of the market is very simple - the first deposits are always merged by traders. This is a kind of tuition fee aimed at revealing your weaknesses.

When this happens, do not be discouraged, but on the contrary, find the strength in yourself to understand your mistakes. Compare your trading with that of successful traders:
  • Successful traders trade a fixed amount
  • The transaction involves an amount not exceeding 5% of the trade balance
  • Successful traders DO NOT trade martingale
  • Successful traders strictly follow the rules of the trading strategy
  • Successful traders trade without emotions
Found differences in your trading? Fix urgently! Understanding your trading is a very important point that you should never forget.

Don't try to find the Grail

There are no, and will not be, easy ways in trading. Many traders spend years looking for something really profitable (indicator, strategy, trading technique) and end up with nothing.

It is always worth remembering that there will never be 100% trading strategies or signals. If your trading method allows you to close 70% of transactions in profit, then this is a very good result and you should not look for something better.

On the other hand, if the broker offers you very favorable conditions - to earn 700% of the investment amount in just one transaction, then be sure that the risks of losing there are much greater. Always be a skeptic.

Be careful with bonuses from brokers

Always look at the conditions for bonus accrual! There are very harmless bonuses (now this direction is gaining popularity) that simply increase your deposit amount and do not interfere with the withdrawal of funds - if you apply for withdrawal before the bonus is worked out, it will simply burn out.

But there are bonuses that do not allow you to withdraw money from your trading account until you make a fixed trading turnover. The trading volume itself can reach an amount that is 35 times more than the received bonus or even 50 times more.

With a $100 bonus, you will need to make a huge number of transactions for a total of $5,000. What are the chances for a novice trader to make such a trading turnover and not lose his deposit? Very small!

Keep a trading log or trading diary

A trading journal with transactions recorded in it is a very important tool for analyzing your trading. It will show where and when something went wrong in your trading, and what exactly you should pay attention to.

A trading diary will also be a great help in testing trading strategies - you can always find out:
  • At what time is the trading strategy most effective
  • Which assets perform best
  • What should be changed to get more profit
Very often, a trader's diary is also used as a psychological diary. In this case, it contains information that reflects the psychological state of the trader. This will help to identify problems associated with the emotional state, to understand when a trader is overcome by fear or joy. Emotions in trading only get in the way, so you should get rid of them.

Develop your trading discipline

In trading, it is very important to perform exactly the right actions - to work according to the same algorithm. This will reduce losses to a minimum and earn more where possible. But all this requires discipline that will allow:
  • Strictly follow the rules of the trading strategy
  • End trading after a series of losing trades
  • Adhere to risk management rules
  • Stick with a daily trading plan
  • To get rid of emotions as much as possible
  • Improve trading results
Trading discipline is one of the key components of stable earnings in trading. Do not underestimate the importance of discipline in trading, on the contrary, it is worth delving into this topic with your head.

Create a trading plan before trading and follow it

A trading plan will allow you to avoid many surprises. In particular, it is needed so that unexpected events do not take the trader by surprise.

A trading plan is created before trading - when nothing threatens you and your trading balance yet. Decide:
  • Over the time of trade
  • What strategy will you use to trade
  • How much will you invest in trades
  • What will you do if trading only brings losses
  • Set realistic goals for the current day and maximum allowable losses
Strictly follow your trading plan - it will allow you to avoid mistakes and rash decisions.

Be patient

Have enough patience to open trades only where they really need to be opened according to the rules of your trading strategy. You should never rush - one mistake can knock you out of a state of calm, which will lead to a further series of mistakes and, possibly, draining your trading deposit.

Don't expect quick results! Many traders trade for years without profit, but they have the patience and effort to continue trading, and, in the end, they achieve very great success. The road will be mastered by the walking one!

Customize your trading strategy

Always trade only those trading strategies that you understand. To achieve this result, study trading indicators and their work. Look at how and when your trading strategy gives signals to open trades.

If you don’t like something in a trading strategy, then remove everything unnecessary from it:
  • Don't like the indicator - remove or replace it
  • Not satisfied with the trading time - adjust the strategy to your trading period
  • The conditions for opening deals are not satisfied - add the missing or remove the excess
Strategies always work differently for each trader, so it is very important to adjust the strategy exactly to your trading style, and not to adapt to the trading strategy yourself.

Have enough trading capital to trade

If you have loans, mortgages, loans and you decide to solve all your financial problems through trading, then nothing will work for you!

It is worth trading only for the amount that you do not mind losing - only in this case you will not have the fear of loss, and you yourself will be able to concentrate on the trading itself. At the same time, your trading balance must be able to withstand drawdowns (which there will be, no doubt about it).

The minimum trading deposit with many brokers is not suitable for trading (we are talking about the minimum $ 10), because. such trading violates all conceivable risk management rules, which leads to a stable drain. Allocate $50-100 for trading and trade no more than $1 per trade!

In this case, you will not lose much in a number of losing trades. In trading, you should always watch how much you can lose, not how much you can earn!

Study, study and study again!

Soak up information like a sponge - the more you know about trading, the fewer mistakes you will make on the way to becoming a trader.

Books are a very important source of knowledge. Moreover, you can read books printed in the last century - nothing has changed since then and they will give you up-to-date information.

At the same time, information must be able to filter. Now there are a lot of "Guru-traders" who do not understand anything about profitable trading, but have the opportunity to express their "guru-opinion". There are now about 95% of them, so you can meet them on every corner.

The hallmark of such “Gurus” is Martingale trading or huge pieces of the trading balance (from 10% to 100% in one transaction) – if you see that a trader is trading with Martingale, immediately run away from it. He will never teach you anything good!

Learn to understand charts and price movements of different assets

Knowledge in the technical analysis of charts will help you very quickly understand further price movements and make money on it. It is believed that in order to master the technical analysis of the chart, you need to spend 10,000 hours watching and analyzing the price movement.

During this time, all the necessary information is deposited in the head of the trader and he begins to intuitively find profitable entry points to the market. If you see that a trader confidently opens deals and analyzes the price chart, then be sure that he has a lot of experience.

Don't try to learn everything at once

There is more than enough information about trading, but an overabundance of information will greatly harm the trader, creating doubts where they should not be. Therefore, study trading gradually:
  • Basics of trading first
  • Risk management
  • Trading psychology
  • Trading discipline
  • In-depth study of chart analysis (technical analysis)
  • Fundamental analysis (Economic news analysis)
  • Different trading methods
You should not immediately move from simple to complex - this will not save you time, but will only harm the learning process.

Never trade Martingale

The Martingale system or the system of increasing rates, provided that the previous transaction was closed at a loss, does not work in trading. Remember this once and for all! If you want to lose your money, you can take a chance and try, but you have been warned and all responsibility is on your shoulders.

Only those clients of brokers who believe in the fairy tale about quick earnings are trading on the Martingale. Well, it's not strange, 95% of traders consistently lose their money in trading. Do you want to replenish their number? Martingale system at your service!

Set realistic goals

The goal in trading must be real, achievable, measurable, specific and limited in time. All this is necessary for a trader to set the right goals for himself and achieve them, improving his trading skills.

An example of a correct goal: in a month (time limit) to earn 15% of the trading balance (Achievable? Yes! Realistic? Yes! Measurable? Yes! Specific? Yes!).

Avoid scammers

There are still one-day brokers and fraudulent brokers among brokers. Trade with trusted brokers that have been around for years and have a minimum of negative reviews (negative reviews can also be written by competitors, so any broker has them).

In the ranks of scammers, you can also record individuals who:
  • Trying to sell you a "trading strategy with 100% trade success"
  • Sell "unique" indicators or programs
  • Distribute trading signals on a paid or free basis
  • Gladly take your trading account to increase your trading balance
  • They will take your funds at interest
  • Teach you how to trade with Martingale
As mentioned earlier, trade only with your head! It doesn't cost anything to buy either - everything can be found for free.

Read the terms of the user agreement with the binary options broker

In the user agreement, which no one ever reads, a lot of interesting things are written. In particular, look at what the broker forbids its clients. Most often, this is a ban on:
  • Having more than one trading account
  • Using third party software
  • Using trading robots
  • Exploiting vulnerabilities in a broker's trading platform
  • In some cases, there may be a ban on the use of the Martingale system
  • Any fraud with bonus funds
For any violation from this list, the broker can block your trading account with a clear conscience. True, if the broker is honest, and you yourself are to blame, then your money will be returned to you (if you did not withdraw more than you deposited earlier). Anyway, the situation is not the most pleasant.

Verify your account in advance, if possible

Account verification or confirmation of the identity of the client (trader) is still an integral procedure for many binary options brokers. So be prepared to provide all the necessary documents.

Without account verification, the withdrawal of funds will not be available to you. Therefore, it is best to verify your account immediately after registration. To do this, as a rule, you will need:
  • Proof of identity and age (passport, driver's license)
  • Document confirming your current place of residence (utility receipt, bank statement, etc.)
  • Photo of the plastic card used to fund the trading account
In some cases (for some brokers), it is impossible to pass account verification immediately after registration. In such cases, account verification takes place after the first withdrawal request is submitted - the broker's verification department does not want to consider clients who may not trade on their platform (a waste of time and effort).

Always register accounts in your own name to avoid possible problems in the future.

Experience comes with time

In trading, the one who is not afraid of all the difficulties, and who has the patience to overcome a long path of learning, always succeeds. You can reproach me that now it is easy for me to talk about all this, but I was also once a novice trader, without the slightest understanding of trading.

In my case, I had enough perseverance and determination not to give up halfway through. It was difficult! It was very difficult! But what I have now is a well-paid job, on which I spend exactly as much time as I want. Well, financial independence.

Whether all this is worth such a huge effort is up to you, but if you decide, then find the strength in yourself to reach the end. Experience will come with time. Any of your actions will fill your cup of knowledge, which will allow you to become a successful trader. Everything depends on you! Dare!
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