Tips for Trading Binary Options Successfully
The 6 Golden Rules to be a successful trader:
1. Always test the strategies in DEMO mode, before starting with REAL money accounts.
2. Always define your trading strategy, and stick to it. If it fails, start over with other strategies.
3. Use the indicators to your advantage and learn to use them effectively. Trading binary options seems like gambling, but it isn't, so learn how to use the trading tools to your advantage.
4. Use proper risk management (I'll give you examples below).
5. NEVER invest an amount of money that you CANNOT afford to lose.
6. Always diversify your investments.
All binary options and CFD's trading strategies must include the following 3 elements:
* Money Management
* Risk Management
* Strategies for market Entry and Exit
It refers to the amount of your investment, the target profit and the loss limit. It is always advisable to invest 1% of your balance, a target profit of 1 to 5%, and a loss limit of 20 to 25% maximum.
On this example above, we can see these settings:
Balance: $ 100 USD
Initial Stake: $ 1 USD
Target profit: $ 2 USD
Stop Loss: $ 25 USD
The trading robots that I will share with you can be configured, so that you choose your own Money Management, according to your risk tolerance.
In some binary trades, you can modify the probability of winning vs. the payment you would like to receive (if you win). The higher the probability of winning, the lower the payout, and the lower the probability of winning, the higher the payout. You can "adjust" the barriers in some operations, to win an amount of money, depending on the probability of winning.
On this example above, we have a Higher/Lower trade type, with the following possible outcomes:
Barrier offset: +0.45
Scenario 1: After 15 seconds, if the price ends above this barrier, your net profit would be $ 10.01 USD, with an investment of $ 2 USD. The probability of winning is 3.3% (high payout with low probability of winning).
Scenario 2: After 15 seconds, if the price ends below this barrier, your net profit would be $ 0.33 USD, with an investment of $ 2 USD. The probability of winning is 83.5% (low payout with high probability of winning).
Strategies for Market Entry and Exit
It is very important to define a strategy for making entry and exit decisions. One of the best ways to make these decisions, is through the use of indicators.
The subject of indicators is very complex, and I will not go into detail on that. All the trading robots that I will share with you have defined entry strategies, as well as countermeasures, to decide what to do when a trade is lost, and recovering by doing other operations.
If you want to know more about trading indicators, you can click here.