Do you want to become a successful investor? Of course you do, nobody goes into trading with the intention of losing money, but it’s amazing how many people are not willing to do what it takes to learn how to become a successful investor. Any trading veteran, even outside of Binary Options Trading, will tell you to plan your trading strategy before investing, and that it is far better to make a couple of educated trades rather than a dozen of impulsive ones.
Binary Options Trading has been much maligned in the past, with Forbes describing it as another form of gambling, and having much more in common with betting than investing. Without having a strategy set out before trading, that’s exactly what it is – high stakes gambling with a poor payoff. However with a comprehensive trading strategy, you can make a great return on your investment.
Before you can create a successful Binary Options trading strategy, you need to know the market in which you will be trading. If you have a natural draw to, or interest in, one market or another then that will be a good place to start. It is far better to get to know one market intimately than it is to experiment with a variety of different assets or currency pairs. Another form of hedging is to take currency pairs or assets that usually move opposite to each other, although this can be a bit more difficult.
It’s absolutely imperative that you shop around to find a broker that suits you, checking both their offers and their credentials. A number of the Internet-based trading platforms that the Binary Options Market operates through might not necessarily comply with U.S regulations, and may be engaging in illegal activity. Make sure to thoroughly research Binary Options Brokers before engaging with an online trading platform. FINRA’s ‘Broker Check’, SEC’s EDGAR, and the CFTC website are all great tools for researching the registration status and background of a broker. Beyond checking the legality of your chosen broker, you should shop around to try and find the best deal, taking advantage of any introductory offers.
A vital part of a successful investor’s toolkit is the range of loss mitigation strategies. First off, consider hedging your investments. The ideal strategy would be to find the highest level of a trading period to take a call, whilst finding the lowest level of a trading period and taking a put. Done correctly, you can set up a scenario where you end up with either a high reward, or a small loss. In addition to this, never trade more than you can afford to lose, never try and compensate for losses and never trade when emotions are running high. Even trading legitimately, you can start to develop a lot of the behaviours associated with gambling addiction if you let your mood become dependent on the outcomes of your trades.
Becoming a successful investor is far less a straight path than a lot of people assume. Even the best traders make losses, and in fact the best traders will have made many bad trades. The difference between them and bad traders is that they learn from their mistakes, whilst a bad trader either gives up on Binary Options Trading or continues making the same mistakes.
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