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The basic principle of successful binary option trading lies in infallible forecasting of the future asset price changes as well as in the correct choice of the asset. If you are a novice trader and you have almost no experience with binary options, then for a successful start it will not hurt to know some of the secrets of binary options. Some of these recommendations may also be useful to investors with experience.
Secret 34 – Be prepared to study seriously
Traders grudging time for learning and observing the markets, spend it on education and training, mastering technical analysis, trading systems, new methods, and so on, will be almost always at a loss.
Secret 33 – About the analysts: look at the analyst and his rendered acc
Everybody is telling lies. In fact, they do it to get your money. Analytical services are financial institutions, which have owners who want your money. They are not in business to assist you. They are engaged in promoting the company’s interests and commission collection.
Secret 32 – Beat the market crowd
All of the other traders are here to take your money. You must take their money away before they get to take yours.
Secret 31 – Think like a hired fighter
Fight on the winning side of the market. Do not waste your time and capital in unfruitful attempt to make a profit by buying on lows and selling on highs or on any market fluctuations. Your task is to make money, while doing a battle on the side of winning forces. If none of the sides wins, then do not fight at all.
Secret 30 – Leave the market when suffering big losses
Every position has to be closed and a trader stops trading for a few days. Do not try to fight back and get the money back after sharp losses. In such cases, the ability to perceive the market and your decisions actually is lost.
Secret 29 – Trends do not reverse fast
Any reversal of the trend needs time to develop. It is built slowly. Several first sharp downs always find their buyers, and several first sharp ups find their sellers. Anyway, the buyers (on the rise) and sellers (on the falls) should be “crowded out” of the market by piecemeal.
Secret 28 – If you need to pick something – it’s not there
As Elder said: “Technical analysis provides enough capacity to deceive yourself and see what is the most wanted”. It is even more likely that you will see something not existing in reality, if it is hard to find it.
Secret 27 – No matter how overwritten the saying is, but the trend is your friend indeed
Do not try to be smart and fight it. Do not try to be a hero. If you think that walking opposite direction walking on one-way street is unreasonable, you are probably right. Transfer this idea to the market. In a bullish market, you need to buy or stand aside. In a bearish market – to sell or walk away. And never forget – having no positions at all also makes a position. In many cases it is really the best position.
Secret 26 – Do things that work for you and avoid things that go against you
Look through your open positions every day. Plan to add to the position promising you the biggest profit. Consider closing unprofitable positions, or positions with a very small profit. These are the basics of the rule about letting the profits grow.
Secret 25 – Stay away from unchecked popular strategies
There are a number of them.
Secret 24 – Avoid jumping into the market, just in order to be “in the game”
Do not hurry. Keep watching and building strategies, and be the first at the right time.
Secret 23 – Be patient
When the position is opened, take some time to let it develop. Wait for a while until the profits you expected create. The saying “You will never go broke, closing profits” is probably the most pointless advice ever existed. Small profits closure is the most obvious way to push up the probability of loss because small profits are not allowed to rise into really big profits. Solid capital in trading is made on one, two, three big transactions each year. You ought to develop a flair of holding profitable positions patiently.
Secret 22 – The things are changing: you should rethink each open position
This concerns your exit strategy first of all. The paid price and the amount of the profit or loss do not relate. If the stock is to be sold – it should be sold. Each position profit or loss is not important, but your ability to stick to the chosen strategy and implementing it is.
Secret 21 – Have an eye to the support (or resistance if you sold)
The farther you are from a support or resistance (if you are selling) level, the more naked and alone you are. To challenge a price, imagine a quick return to the resistance level, then imagine a big loss.
Secret 20 – Buy at support levels, sell at resistance levels
This should be done even if it is hard. If you see something on the chart, then the other traders see it too. And they are waiting for the right moment to enter.
Secret 19 – Buy at support level. Set tight stops when approaching a resistance level
Your price may slip through resistance level, fall or stop. With the falling price, the position ought to be closed fast.
Secret 18 – Quit trying to catch a falling knife
Instead, watch for a few days – there will be a sharp rise, bounce back and return to the previous minimum. If the price is not going below the previous low, then plan to open a position. If the price goes up again, never mind, there will always be other opportunities. Watch for the optimal moment for opening.
Secret 17 – Always protect your capital. Decrease small losses
The main principle is to be intolerant with losses. Usually, small and rapid losses are the best losses. It is not necessary to pay much attention to the losses. It is much worse to go through psychological pressure from maintaining a losing position. Practice the complete risk management.
Secret 16 – Moving feet are to be used if the market goes in your favor
In order to avoid too early or too late opening of the position, set the stop mentally at 10-15% of the current market price or a bit more than recent maxima or minima, or, which is even better, at the current support/resistance levels. Thereafter, only correct the target level.
Secret 15 – Large amounts kill the trend that prevails
Never forget that a culminating (too high) new rise a too strong collapse is possible. Such culminating rises and collapses throw both buyers and sellers away from the market. The market usually enters the lateral movement after such breakthroughs.
Secret 14 – News is already on the schedule
Adherents of fundamental analysis react to the news predictably. Adherents of technical analysis react to the figures on the charts and indicators. If you can properly read a chart, you do not need following the news, and don’t even have to worry about events in the news. Base your decisions on what is happening on the chart, but not on what will happen in your opinion after the news. Forget the news and remember the chart, which already considered future news.
Secret 13 – There is always a crowd of those who missed the first train
For instance, the first sharp price decline (known as sell-off) always finds its buyers, and the first sharp price increase (rally) always finds its sellers. These “reactions” are temporary in most cases. Plan the purchase on the first rebound from a new high and the sale on the first rebound from a new low.
Secret 12 – Be ready for mistakes and small losses
Trade is trade, markets are markets and losses remain inevitable. However, they can be managed. Put your feet, mentally or really, and act according to your plan without hesitation. This way you can manage the risk. Thus you can protect your capital and remain in the game.
Secret 11 – Open small initial positions
Use the pyramid principle to add to the initial successful position. As soon as it turns out that you are right in your decision, add to your position strategically. As Davy Crockett said, “Be always sure you’re right, then go ahead!”
Secret 10 – Develop strict discipline and patience. Learn to wait for the right time
As Bill Lipschutz states, of 250 deals you make – three will be detrimental, two will bring the profit, and all the others will depend on your actions directly. Wait to trace composite trends: a strong share, a strong sector / group, a strong market. Anticipate the moment when the composite support and resistance levels are in your favor. Profitable trading is an activity, where you have to spend a lot of time on doing nothing. Spend it on something useful and rational.
Secret 9 – Open potentially successful positions
In other words, schedule your trades. Avoid entering the market before all the details are studied and are analyzed. Put down a construction of the pyramid – lay a scheme of how to add to the open position. Make up an action plan for extraordinary situations so you could exit the transaction at any time. Otherwise, you will suffer big losses.
Secret 8 – Record your trading in journal
To learn from mistakes, you have to remember them. Don’t stop keeping record your past failures and successes at hand. Keep tracking all market reactions and movements, and fix your observations. Keep a record of how the market is moving at certain moments. Such a detailed journal is not less valuable than any written tutorial about successful trading.
Secret 7 – Invest the capital, not ego
The most scrupulously constructed strategy also can suddenly do you a bad service. Terms and conditions may change. The market may change. Such changes may make even a system that works perfectly fail. Always be prepared for adaption. Without readiness to compromise your creed, you may finish at a big loss. Don’t let your transaction become an “investment”, simply because you cannot understand the market fluctuations.
Secret 6 – Discover yourself as a trader
Profitable trading consists of 97% understanding and use of your own strengths and weaknesses. If you continually make transactions, in which your strengths are not used, you will end trading at a loss.
Secret 5 – Do not chase momentary profit
In pursuit of “good deal”, which can within minutes bring big dividends, most traders often lose. It is far better to trade with small amounts, but to do it regularly. 100 successful and inexpensive transactions are better than two or three successful and high-priced. Indeed, in the first case, you get more experience, and it is priceless.
Secret 4 – Do the Opposite
Increase your bets when winning, and reduce them if you lose. Note that most novice traders do the opposite: in order to compensate for the loss they increase their rates while losing. And as a result, they are in the red. You should not imitate them!
Secret 3 – Do not do all at once and a lot
As long as you do not begin to navigate in the binary option market confidently, do not throw away large sums. You can go for large investments at a later stage, when you have completely mastered the market, get some experience in trading and learn the behavior of assets.
Secret 2 – Select the option expiry time
Being engaged in trade, the investor is free to choose any time to make another prediction: the end of the hour, day or month. By selecting the option expiry period, the trader will immediately become a party to the so-called short-term trading. Short-term trading has one big advantage – it is the possibility of a quick profit. And despite the fact that the risks are considered to be large, this kind of trading is recommended for novice investors. It is the only way you can quickly earn your first money, gain invaluable experience and master the financial intuition.
Secret 1 – Learning the Market
To select a profitable option for you, as for a novice trader, it is recommended to follow the news of the financial markets for 2-3 weeks. This will give you the opportunity to choose assets with understandable for you behavior and which change of prices the most accurately matches the predictions of financial experts. Only a thorough understanding of the situation on the financial market and the levers that affect the price of the selected assets will allow you not to be mistaken with another financial forecast.
In conclusion, we can only add that option trading is a serious matter that requires strict discipline and a lot of patience. Secrets and recommendations can only help you, but do not make you a millionaire in a minute. So get adjusted to serious work – study the trader’s psychology and learn the secrets of successful traders, possess your mind, and luck will not forget about you!
That’s all for now. Got any questions? Just ask the expert!