Binary trading is a quite common yet a much-understated term in the financial world. Where freshly influenced traders look for a quick earning source, if not careful, this source can backfire with a huge loss as they work on the basic financial principle, “higher the risk, higher the profitability”. However, this does not limit the scope of the said trading option but requires knowledge, skill & wise financial planning. So to answer the question whether beginners should take this up as their source of earning, the answer to that is yes!
What country doesn’t want a hype in their foreign exchange earnings? Binary options strategy is a pretty regulated form of earning quick money in Pakistan for early traders who know how to manage their risk potential & since most of the legal and regulated brokers lie abroad, their earnings add to the forex earnings for Pakistan. A win-win situation!
The foremost step for a beginner is to make sure to register with a reliable broker like Finmax who can set up sample trading account or connect you with a signals provider such as Tesler App, the bright side to which is free of charge lesson.
For tricky trading like this, one needs to be aware of the risks and traps lurking around. If traders go unprepared, brokers practically devour them as they tend to bet high on one position and if they suffer a loss it’s difficult to cover it.
What to avoid
There are quite a few performance mistakes that different trader’s exhibit that should be avoided at all costs. Some of these include:
1. The Gut feeling may be wrong:
Many traders enter the trade without having done a proper research on the option. Questions like whether there are chances of the price rising before the options expire? What are the stakes? The tradeoff between profitability and investment? These should be answered with thorough detailing.
2. The bigger is NOT the better:
A highlight for trading on binary options is not being affected by the size of the trade. A trading option is going to incur losses in any case so being smart about it and going slow will prevent you from incurring a loss that becomes an obstacle to your future success.
3. Not succumbing to your emotions:
A professional trader has a cool & calm approach, no matter how big the size of the trade is or how little the profit is, rational thinking is everything!
4. Do not repeat your mistakes:
Learn to grow! Keep a record of your past errors by jotting down pointers. As basic as this idea sounds, it’s a task that is often neglected but makes a bold difference.
5. Wait for the bigger goal:
There is a fine line between earning money procedurally and losing money. It’s a fact that losses will be incurred hence don’t get frustrated and forget the main goal. It will be worth it!
Make your Strategies
In order to be successful using binary trading options, it is important to work systematically and not make hasty decisions. Managing risk is your key to success in binary trading options. Whether it is a put or a call option, a trader has a 50% chance of winning. Hence a trader needs to be sure about at least 60% of his trade decisions.
Following are the possible strategies that beginners can use:
1. Signaling service for starters:
In order for traders to make more accurate predictions, it is important to get some help which can come from a signaling service. These analyze and make informed predictions which may be able to land the ball in their court!
2. Technical indicators:
The knowledge of technical indicators such as price charts providing comparisons helps traders predict price movements. Some of the most common indicators include moving averages, Bollinger bands, and Relative strength index. Knowing what works well for the trading security displays a huge advantage.
3. Tracking performance of multiple options:
Different securities have different characteristics and trends hence most people are going to be better at trading stocks better than others. If one has multiple options, stick to the profitable ones.
4. The right option length:
An option length is the amount of time one holds an option. Some trading styles will work better in short-term than long-term. Work with what you prefer and know the appropriate length option. E.g. A value investor would be highly sensitive to a price hike in a trade expiring over six months compared to a price hike over a one minute option.
Yes, binary trading is not easy for beginners but it is not impossible. Trading is not easy but the key is to play smart and clever!
Emma Alex is a freelance writer, experienced blogger, and a professional social media coach. Currently, She’s working with xbinop.com. Furthermore, Emma assists in the business creation and control social media content planning.