Your Binary Options Make Money Trading Guide 2012
Your Binary Options Make Money Trading Guide 2012November 12, 2012
So why is it that some traders are always more successful than others at making money trading binary options? I often ask myself this question, because assuming both traders are relatively intelligent, educated, and start off with the same amount of investment capital – what sets them apart? Is there a winning recipe or cheat sheet for executing optimal trades? The answers vary, but after speaking to my colleagues it is plain to see that most of the successful traders I know have the following characteristics, mind set, and work methodologies in common.
Common Psycholgical and Personal Traits Most Successful Traders Have
All the successful traders have nerves of steel and an ability to stick to their trading strategy despite the pressure to sell the contract and cash out the remainder of the balance. Furthermore, they all have what I call a “warrior” mind set or mentality. This means every morning they get up the first thing they think of is “how do I make more money today” on a certain stock, index, commodity, or currency.
No excuses, no compromises! These guys are not willing to accept failure and hate coming in second place. The only thing that matters to them is what they have to do in order for their contract to expire in the money and for them to cash out.
The “basement trader” versus the Wall Street Professional
The basement trader or amateur working out of his home and trying to profit has become an increasingly more prevalent trend. A friend of mine who was a top executive at a big airline company recently retired and makes more than he ever did as an airline employee. But there is a price to pay because money is like a jealous girlfriend, you need to give it your full attention, otherwise it ends up in someone else’s hands.
If it means getting up during strange hours and checking up on other markets or indices, or making split second decisions based on a reversal pattern or bear trap, you don’t really have a choice. If you want to get rich trading binary options online, you need to be totally dedicated and focused on your positions and trading portfolio.
The main difference between a basement trader and a Wall Street pro is that if your doing it by yourself then its YOURS! It’s your business, your responsibility and your personal reward and satisfaction. If you work on Wall Street or any other investment firm for that matter, your making money for someone else, and biting off a slice of the pie depending on how successful you are in generating profits.
Successful Trading Strategies and Tips for Generating Profits
1. Set Your Objectives
Having benchmarks and connecting to the success versus fail ratio (some call it win vs loss ratio but this in incorrect in my opinion) is critical to your level of success. To illustrate, if you using the high frequency or rapid fire trading strategy on 60 second options, you need to count exactly how many trades you are making in a given time frame, what is the amount of your initial investment, how much are you willing to risk, and consistently measure your level of success. If you see that in most cases your contract expires out of the money, try changing a strategy or move to trading different assets all together. Having a backup broker is always crucial even if it is just to change the dynamics of the trading sessions.
Whatever you do, don’t overshoot on your objectives setting because it will cause you to be frustrated. Ask around to see what other traders like you are doing and how much they make and develop objectives based on projected ROI.
2. Trading Analytics Tools
Always make sure you have your candlestick charts ready as well as other trading tools depending on how and what assets you want to trade. For instance, if you are trading currency pairs on 24option for example, you will probably need a good market news surveillance tool. I log into about 20 financial sites on a daily basis to receive stock market quotes, business and financial news, market analysis, trading ideas and stock tips and strategies.
3. Always Have a Trading Strategy Ready
There are many trading strategies out there, but it doesn’t matter if you are a technical trader, a scalper, swinger or momentum trader. Using common sense, interpreting the figures in real time, and identifying the correct entry and exit signals are crucial if you want to succeed. In my previous posts I have written about bull and bear traps, harami crosses, hammers, and hanging men. These are all candle chart indicators designed to let you know when to enter a trade or fall back on your exit strategy. All of the successful traders I know have mastered a few trading strategies and stay loyal to them, but are also always open to try out new strategies because they a curious and constantly interested about finding new and better ways to make gains on their stock portfolio.
4. If You Don’t Know – Ask!
I have been around investing for 13 years, but every now and then someone new crosses my path with much less experience then I have, but a with a different type of skill set and knowledge. People from different backgrounds will always have different opinions about how to make money. It’s important to consult with them and even if they are newer to the profession then you are, these people will tend to surprise you with unique insights and innovative investing ideas. Additionally, opening a demo trading account and executing simulated trades in practice mode will help you get answers most of your questions.
5. Don’t Risk More than You Can Afford to Lose
I think enough has been said about this. Binary options trading involves a very high degree of risk and is not a suitable trading vehicle for everyone. All the successful traders I know diversify their risk and always have some cash ready to bounce back if they expire out of the money too many times.
To sum up, making money through binary options trading involves careful strategic planning, extensive research, and an ability to manage risk. Other key factors to being a successful trader involve finding the right broker, asking for better bonuses on your deposit, and an ability to constantly reevaluate your positions and hedge your trades.