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How to Become a Successful Binary Options Trader
July 16, 2012
A friend of mine asked me recently if I have been taking hits on binary options contracts. I smelled a rat so immediately I told him that I have absorbed some losses recently, specifically on commodities like XOM (which by the way is undervalued) and Comex Gold.
Now, obviously since the Eurozone sovereign debt crisis started effecting how everyone buys and sells stock options, I immediately switched to Cbot Corn and Soybean since I did my research by using the candlestick patterns and analyzing financial news.
I didn’t want to tell him that the recent developments in global markets present opportunities to make money and that if he plays his cards right he could make a killing. Naturally, he should have talked to me before purchasing those contracts and taking unnecessary risks.
I took a step back and let him unload his troubles and tell me how he got into a financial mess. A quick mathematical calculation showed me it wasn’t all that bad, and by taking a few calculated risks he should be able to bounce back and actually make a nice chunk of money.
This was the plan I drafted for him:
1. Revise the whole binary options strategy by switching from oil to agricultural commodities and taking daily and weekly contracts.
2. Dump the 60 second options trading tool. It killed him because there is no skill involved; its financial betting in its purest form.
3. Take a good look at some recent binary options reviews from 2012 and choose another broker. Besides the psychological effect of starting out with someone new, you may actually start seeing some cash from a legit broker not someone trying to scam you out of your money.
4. Start simulating trades on the demo account before making a deposit. I don’t care if your an amateur just starting out or an experienced trader moonlighting for fun with a day job at Morgan Stanley, it’s always better to get a feel for the trading tools, see the moving average and resistance lines, and correlate the charting data with financial news and see how it works in practice mode. It will give you more confidence and focus when you see how the systems react when you buy a call or put option on EUR/USD for example.
5. Check out what bonuses and promotions the various brokers have. If you are looking for an insurance or cashback bonus chances are you can negotiate your way to a better deal.
6. Don’t forget to educate yourself. This is an ongoing task, and not a silver bullet solution to alleviate a cash flow situation.
7. Make sure you check and see if you are dealing with a regulated broker. If you are a US trader you will have some brokers telling you that you are excluded from making trades. If you are from Canada, Australia, United Kingdom, New Zealand, Germany, France, Italy, Spain, or from an Arabic speaking country like Saudi Arabia, Qatar, Dubai, Kuwait, or Brunei, all binary options brokers will accept you.
8. Make sure to read the binary options guide located at the right panel of our home page. It will give you good insights as to how to get started trading binary options online in the most simple and effective way.
9. Check to see what payment methods are offered. Usually Visa, Mastercard, and Amex are available. But also ewallets such as Moneybookers (Skrill) and Neteller are also available as well as Wire Transfers. Paypal is not an option in any case.
Eventually you will pick up on what trading options are best for you and what underlying assets are the most attractive. If you are on Optionsclick for example you may want to use the trading simulator and make High Low and One Touch trades. If you are trading on Tradologic powered software like OptionBit, you may want to check out the Digital, Range or Matrix trading options.
As is in all cases, commodities, stocks, indices, and currencies are offered on all binary options platforms. For a quick recap on recommended brokers check out our reviews section located on the right panel.
If you feel you want to open a free trading account with a recommended binary options broker click Here and get yourself on the fast track to becoming a successful trader.
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