6 Tips to be Successful Binary Options Trader

Here are some useful hints to get you in the proper mindset for successful Binary options Trader :

1) Set a goal of 10% profit as it is both binary options realistic and does not require more than 3 trades. (And yes a profit of 200-300% is possible, but this means you have to bid larger amounts and spend more time trading). Then 10% daily compound profit with a $250 deposit can easily turn into 10K, over three months time.

2) Set a “Stop” limit in place for trading such as “I’ll stop once I hit my 10% profit” or when losing “I’ll stop once my balance hits $_____”

3) Only trade in the 30 minute and 1 hour duration options. Although the 1 minute option is quite tempting, it’s where the biggest losses occur.

Also Read : 8 Benefits From Binary Options Robot

4) Be patient: It is important to that you know the lowest and highest points of your trade for that day. Always aim for the peak or low before placing your bid. You can bid more confidently when it is near the top or the bottom. Never bid when it’s in the middle.

5) Find the “guiding point.” Follow the trend of the 2 hour graph when bidding at the one hour option. Use the 1 minute graph as a guide to “bid” or “wait.”
For example, if the 2nd hour graph displays a downtrend, look at the 1 minute graph, if this is also down, go ahead and bit. Wait, if it’s uptrend. Wait til it starts to downtrend before bidding on the one 1 hour option.

6) Deposit only a minimum amount with which you feel comfortable. Feel free to ignore the bonus “bait” or broker’s threat. Set an amount; say $250 as a monthly deposit. When this starts making a profit, withdraw some of the profit per month as well. But always leave money for bidding. The initial aim is withdrawal the total you have deposited throughout the entire process.

Some of the above might seem a little too technical, but if you break it down, they are practical and will help you turn a profit.

Binary Options: Employ Compounding Maximize Profits

Basically, there is no perfect way of trading binary options as many self proclaimed trade experts say. Just like with any other type of investment, there are certain practices and theories that have been tested and found to work better than others in trading binary options. Anyone who is successful in binary options will tell you that most of the traders focus their attention on trading strategies, rather than on money management while trading.

Binary Options

 

Applying Compounding Effectively

Regardless of the many articles and e-Books you might have come across telling you to rely solely on your trading strategies, the truth is that money management form an integral part of any successful binary options investment strategy. Throughout this article, compounding– a money management and risk control method, will be addressed.

As opposed to using a fixed stake to open positions, this money management strategy requires that you use a fixed percentage of the total capital in your brokerage account, like the 10 percent used in the above example. With compounding, you do not have to take great risks in order to make exceptional profits; all you need is time. With time, your profits will continue to grow, but the risk you take will remain to be the same.

Essentially, compounding is meant to minimize the short-term risks you have to take while trading in binary options and still get good returns from the trade, over the long run.

What Exactly Is Compounding?

Simply put, compounding is a mathematical formula that focuses on using your profits to profit even more. Currently, this technique is commonly used in pensions and the long-term Mutual fund growth, but many binary option traders tend to ignore it. The method is rather easy to apply and may be used with any binary options trading technique to maximize profits. Owing to the short time frame of the trading positions in binary options, compounding is a very suited formula. According to Einstein, a well renowned mathematician, compounding is among the greatest mathematical formulas ever discovered. So, how does the formula work?

Suppose, you deposited $1000 with your binary broker and then open five positions, each being 10 percent of the capital and win all the positions by the end of the week. This means that you get 70 percent on the invested amount and the total account balance by the end of the five positions will be $1350. With this as the capital, you open another five positions, each 10 percent of the capital ($135). If you win these positions with a payout of 70 percent, you will get a profit of $475 from last week’s profit. (70 percent of $135 is $95 and multiplying this by five gives you $475)

While you may not win all the positions, this is an example of how compounding can be successful. You have just risked 10 percent of you capital with each position and made a profit of $350 in the first week and $475 in the second week. This compounded increase in profits is sometimes refereed to as creating the ‘snowball effect’