What It Takes To Trade Binary Options For A Living
Choose Your Broker Carefully
To make a living from your binary options trading, make sure you sign up with the right broker. The last thing you need is to open a trading account, deposit some money into it, do some profitable trading, and then realize your broker was in it for your deposit and not your profit making agenda.
Many unregulated brokers turn out to be scammers who will be done with you as soon as you have made a deposit.
Fortunately, the binary options industry has been around long enough for aspiring traders to know which brokers are legit and which ones are frauds. A good way to separate the wheat from the chaff is to ensure that the broker you are using is regulated. And why stop there? Go ahead and see what other traders have to say about the broker.
Also try to find out if the broker has been associated with any scandals, it is not completely out of the ordinary for regulated brokers to be accused of business misconduct. For instance, go for brokers that enjoy the approval of multiple regulators, or even some of the most demanding financial watchdogs in the world. They tend to keep all their operations above board to avoid losing their hard-earned brokerage licenses.
Make Sure You Have A Strategy
Don’t bother making a single trade unless it is backed by a sound and proven strategy. This is a market where making profits through blind luck is completely out of question. Your strategy should give you clear expectations about the sort of winnings you should expect over time; and any significant adverse deviations from these estimates should tell you that your strategy might require some fine-tuning.
A good strategy needs to take into consideration the potential rewards and risks of your trading activities. Without a strategy, you will end up making your trades emotionally: trying to “revenge” lost trades, and taking overly large risks after “lucky” trades.
Many traders do this, and eventually, they end up losing all their money. So, have a strategy in place before you begin trading. The truth is, luck will never take the place of a good strategy in binary options trading.
Know How To Manage Your Money
You might wish to make an average of a thousand bucks each day over time; and there is nothing wrong with that, as long as you are managing your account properly. What this means is that you should not take more risks than your account can handle. A single trade should not put your bankroll at risk, and neither should a couple of wrong trades either.
Money management is actually pretty simple: make sure you can handle some considerable hits from the market and still have enough money left to recover when things begin to go your way.
If a single loss trade puts you out of the game, you will not be there to make anything from the numerous profitable trading opportunities that follow.
Some wise traders ensure that no trade risks more than 5% of their account, some use even tighter risk margins. So, there is no reason why a single trade should wipe out 50% of your account if it closes out of the money either.
Have A Long Term View Of Your Trading
Binary brokers are often a little “enthusiastic” when promoting the rewards that lay in wait for you once you open an account and begin your trading – don’t take this at heart. This form of trading is not a get rich quick scheme. And if you would like to think of binary options as a way to make a living, you will have to accept that you will be doing it over the long run, just as with any other career.
This is the only way you can have the mental fortitude to learn from your mistakes, come back after a bad trading day and turn things around, and in the end make enough money to proudly call trading your career.
Be Ready To Learn
Binary option is often described as simple. Some people take this to mean that they are ready to trade as soon as they have an account. This perception is usually a disaster waiting to happen.
Binary options trading may be simple because you just have to click on a “call” or “put” button, but that does not mean it is easy. You have to understand the implications of the decisions you are making as you trade, and this requires some education. First off, do some research on the assets you are trading.
Additionally, follow the news and see what is happening to the industry and the assets you are interested in. In short, have you finger on the pulse of the market, and you will not be baffled by the outcomes of your trades. While at it, learn some technical and fundamental analysis techniques so that you can predict asset price movements with better accuracy.
Fortunately, this education is readily available over the internet; which means ignorance of binary options trading is not justifiable under any circumstances once you have chosen to become a committed market participant.
There is no shortage of information claiming that trading binary options is a pipe dream. This may have been the case for the bitter traders who went in without understanding the industry and got burned, but it does not have to be your reality.
As long as you know what you are getting into, and are willing to learn the ropes and do whatever it takes to protect your money, you can make a living out of binary options trading.
So, Can You Trade Binary Options For A Living?
Yes, you can. It is an indisputable fact that many binary options traders fail at this craft, but those who make it go the extra mile to ensure that every trade they make is founded on the right strategy, money management skills, a reliable brokerage platform, adequate market knowledge, and any other factor that plays a role in successful trading.
If you can take a similar approach, then it goes without saying that you can also succeed in binary options trading, and yes, even earn a good living.