If you want to become a successful binary options trader, you need to follow a few basic binary options trading tips that are mentioned below:
Keep a trading diary: This may sound a little awkward because you can argue that all records are there in your online account. Yes, the records are there but using a trading diary will help you to better understand your trades and the market patters. You can keep additional notes like the factors that led to a market boom or a market collapse, comparative results for multiple brokers, your customize trading or hedging strategy and the factors that forced or motivated you to go for such customized trades etc. A trading diary has far more benefits than you can actually think of.
Monitor your trading account balance: Always remember to monitor the balance of your trading account at the end of each successful or failed trades. This will particularly help you to understand two things – first, you can quickly get an idea of how quickly your money is growing and second, you will come to know whether the broker is actually cheating on you or not.
Do your research: If you are planning to use advanced trading strategies, it is very essential to do your research. Research refers to analysis of price trends of your selected or preferred assets, the factors that influence the price movements for those assets, at what time of the day those assets are most volatile and risky, what other traders are thinking about the assets performance, the current analysis provided by the experts about the asset or the market as a whole etc. These will help you to take more informed decisions and allow you to place more accurate trades.
Trade what you can afford to lose: This is very important. Never invest too much in one single trade. If you lose, you will lose a lot and this will be demotivating and depressing. This is one sole reason why many traders eventually quit binary options trading. Build your ocean drop by drop even if that takes a lot of time! Take it – you can never win 100% of your trade. No one does! Not even the best of the best traders in this world win 100% of their trades. But what differentiates them from others is that they start will small investments so that if they lose, their loss is limited and contained within acceptable range.
Control your risk: This is pretty difficult but not impossible. If you are an experienced trader, you know what to do but if are a new bird in open sky, consider flying in a safe zone! Trade in less risky assets, select assets carefully. It is always wise to select those assets of which you have a fair idea.
Make small investments: You will argue – big investment equals big profit BUT, the problem is that in case of losing trades, big investments mean even bigger losses! Keep your investments low and see your money grow gradually. This will also give you enough space to accommodate small loses.
Vary the risk based on market conditions: Market conditions keep changing. High volatility in market can lead to high profits but at the same time, the risks of losing trades are also high. So, if you don’t love too much risk, lower your investments during periods of high volatility and increase your investments when you are very sure that your speculations will turn out to be true.
Diversify: Don’t invest all your money in one asset. Trade in different assets because not all assets will be equally risky at the same time. Also consider opening accounts with at least two brokers located in two different countries with different regulations so that if one broker goes down for some reason, you can count on the other one.