Binary options traders can earn 70% – 90% as a return on investment. However, with the wrong strategies, you may keep losing. To avoid those unnecessary losses, you need to know some trading secrets. Below are some of these secrets.
List of the biggest Binary Trading Secrets:
- You Don’t Need Complex Market Movements to Make Money
- Choose a Reputable Broker with High Returns
- Always Trade the Asset with the Highest Return
- Develop a Trading Plan
- Monitor and Adjust Trading Strategy Accordingly
- Avoid Trading During Times of Low Market Volume
- Never Try to Make Up Losses
- Be Careful with Correlating Assets
- Start Small and Progress Slowly
- Don’t Push Demo Accounts Aside
1. You Don’t Need Complex Market Movements to Make Money
With binary options trading, one price movement is enough to make money—the fundamental idea of binary options centers around a simple “yes” or “no” proposition. Once you can rightly determine whether an underlying asset will be above a certain price at a specific time, you can make a significant profit.
The “yes” or “no” proposition binary options offer makes it one of the simplest financial assets to trade. So, it’s also suitable for beginners and low-skilled traders.
Most individuals trade instruments like a high-low or fixed-return option, providing access to indices, commodities, and stocks.
2. Choose a Reputable Broker with High Returns
Your binary option broker determines a significant portion of your experience trading. For this reason, it’s important to engage with registered and reputable brokers like Pocket Option. Good brokers don’t only provide security but also ensure that their traders get high returns.
To choose a reputable broker, look out for the following:
- Operation transparency: Your broker should be transparent about their standards of conduct, including how they ensure customer funds are safe and overall operations.
- User interface and functionality: Does the broker have an appealing user interface? Are all available links and buttons on the website clear and clickable? If they aren’t, avoid trading with that broker.
- Possibility of demo account trading: If you’re a beginner, demo account trading will help you gain significant experience before using your real money.
- Other financial considerations: Evaluate your broker’s trading commissions, deposit and withdrawal options, and other fees.
- Welcomes international clients
- Offers high payouts: 90% – 97%+
- Professional-grade trading platform
- Swift deposit process
- Enables Social Trading
- Provides free bonus incentives
- Min. deposit $10
- $10,000 demo
- Professional platform
- High profit up to 95%
- Fast withdrawals
- Signals
- $10 minimum deposit
- Free demo account
- High return up to 100% (in case of a correct prediction)
- The platform is easy to use
- 24/7 support
- Welcomes international clients
- Offers high payouts: 90% – 97%+
- Professional-grade trading platform
- Swift deposit process
- Enables Social Trading
- Provides free bonus incentives
- Min. deposit $10
- $10,000 demo
- Professional platform
- High profit up to 95%
- Fast withdrawals
- Signals
- $10 minimum deposit
- Free demo account
- High return up to 100% (in case of a correct prediction)
- The platform is easy to use
- 24/7 support
3. Always Trade the Asset With the Highest Return
Brokers like Pocket Option typically offer diverse assets, including forex, commodities, stocks, and cryptocurrencies.
Forex, also known as FX, is one of the most commonly traded assets in binary options trading. With FX, you can trade binary option contracts based on various currency pairs. Some examples of these pairs are:
- EUR/USD
- AUD/USD
- USD/JPY
- GBP/USD
- USD/CHF
- EUR/GBP
Commodities are a low-risk and reliable binary trade option. Instead of trading oil, gold, silver, or even coffee in the financial market, you need to predict their price movement once. Trading stocks using binary options follows a similar principle of letting you choose the possible price movement of a stock without buying the stock itself.
Cryptocurrencies like Bitcoin can be traded with binary options. They are highly volatile assets, so their price changes occur fast each day. However, they can give the highest returns, especially when using a trusted and regulated broker.
4. Develop a Trading Plan
Without a good trading plan, the possibility of a loss is higher than that of profit. Good traders use well-structured strategies that incorporate effective risk management principles. For example, you should always implement stop-loss orders to reduce losses. A good trading plan lets you know when to enter and exit trades without making impulsive decisions.
When developing a trading plan, take these steps for better results:
- Step 1: Know your risk tolerance and trading goals.
- Step 2: Choose your trading method (day, swing, position, or scalping).
- Step 3: Choose your technical indicators to spot market trends.
- Step 4: Backtest your strategy to analyze its effectiveness.
- Step 5: Apply risk management techniques.
(Risk warning: Your capital can be at risk)
5. Monitor and Adjust Trading Strategy Accordingly
In binary options trading, you must constantly consider market volatility, conditions, and risk tolerance. Those considerations will make up your trading strategy, helping you maximize profit.
An important part of monitoring your strategy is analyzing your win rate. If you have a high win rate, your strategy works, but if your win rate is low, you may need to make certain adjustments. Common adjustments traders make include:
- Using more advanced technical indicators: Examples of these technical indicators are Bollinger Bands, MACD, Moving Averages, and RSI.
- Re-evaluating entry and exit points
- Modifying risk management techniques: Examples of techniques to consider are position sizing, emotional control, position sizing, and choosing the right broker.
6. Avoid Trading During Times of Low Market Volume
When there’s a low market volume, there’s a high possibility for traders to experience a loss. This is because low market volume assets lack liquidity, which is important for traders. So, most frequent binary options traders lose money when liquidity is low.
Low market volumes may also signify interest from only a few market participants. It could also make it difficult to make a profit, even when you make correct predictions.
Another reason you should avoid trading during times of low market volume is to avoid manipulative market makers. These market makers are typically active in low-volume assets like stocks to take advantage of people eager to get in and out of the market.
7. Never Try to Make Up Losses – Understand Money Management
The crux of money management in binary options trading is implementing techniques to limit risk while improving the reward. It also means you need to learn to control your emotions while trading assets. Try to understand that losses are an integral part of trading, and learning to accept them can sometimes help you protect your profit.
Learning from it and moving on is a good way to deal with a loss. For instance, if your loss is due to a strategy error, ensure that you don’t make the same mistake twice. However, if your loss is due to an off-strategy reason like fear of missing out (FOMO), try to follow these suggestions:
- Accept the loss
- Develop trading discipline
- Set personal trading goals
- Stick to trading plan and strategy
- Only invest or trade amounts you can lose
(Risk warning: Your capital can be at risk)
8. Be Careful With Correlating Assets
When trading, you need to be careful with your open positions. Traditionally, experts advise not having more than three positions open. But, since binary options have a fixed risk for each other, you may open more than three positions if necessary. However, ensure that your assets are diversified and don’t have any form of correlation.
For example, the US dollar typically moves in the opposite direction to the Euro and Gold. So, if your position is placed incorrectly, they could cancel out each other. This could make you fall into a loss by having a lower payout ratio.
9. Start Small and Progress Slowly
As a beginner, you need to start small before deciding to go all-into trading. You could learn a lot from your journey that extends beyond theoretical knowledge. For instance, the only suitable way to practice discipline while trading is to gain some trading experience. Trading huge amounts and losing at an early time could discourage you from staying consistent.
Once you’ve carried out multiple trades and are comfortable with your win rate, you can begin trading bigger amounts. However, never forget to keep your risk percentage low when trading.
10. Don’t Push Demo Accounts Aside
Reputable brokers offer demo accounts to help you get familiar with the software or trading as a whole. However, it’s important to note that simulated results from demo trading differ from real results. Partly, this is because demo trading doesn’t involve real money, and you can typically control your emotions better.
Depending on your broker, there are three major types of demo accounts – deposit-based demo accounts, deposit-free demo accounts, and timed demo accounts. Regardless of the type they offer, they all provide a feel of how binary options trading works without making any actual deposits.
Most asked questions about the topic:
What are binary options?
Binary options is a trading option that either pays a fixed amount or nothing at all. It’s solely based on the trader’s prediction of an underlying asset’s value at a predetermined date. Examples of traded assets are cryptocurrencies, forex, and commodities.
How to know the best binary options broker?
To know the best binary options broker, you need to review their regulation and reputation. Confirm if they are regulated by bodies like the Mwali International Service Authority (MISA) which regulates Pocket Option. You can also check for the reviews of other traders to know their track record in the industry.
Are binary options signals helpful?
Yes, binary options signals are helpful for beginner traders who aren’t too familiar with the financial markets. However, in the long run, it’s still important for these traders to learn their trading strategy to avoid overreliance on signals.
How much can I make trading binary options?
You can make 70% to 85% return trading binary options. So, for instance, if you were trading with a broker and you decided to invest $1,000, you could make anything between $700 to $850 in profit.
Can I start trading binary options without experience?
Yes, binary options are suitable for beginners. The simplicity of the “yes” or “no” proposition makes it accessible, and reputable brokers often offer demo accounts for practice.
