By: Hillel Fuld
We all want to make money, I think most of us can agree about that. The problem is that today’s culture of instant gratification, which is magnified with the Web and social media, people do not have the patience they require to make serious money. Binary trading is no different, if you want to make profits, you need a binary options strategy.
So, now, if you have ever tradied binary options, you must be thinking, how can such a simple industry require a strategy and what is a binary options strategy anyway? Good question.
The truth is, binary trading is different than other markets such as Forex in many ways, but when it comes to a binary options strategy, you can look to the Forex market for some guidance.
The basic principles that make up a good Forex strategy can and should also be applied to a binary options strategy. Here are a few examples:
- Risk VS Reward: When trading binary options, you need to decide how much capital you are able to risk losing. If you need that money to feed your family, as strong as the craving is to try and double it, it is not the kind of thing you want to do. You need to sit down and figure out what you can afford to lose and use that money to trade binary options. That is 101 of a binary options strategy.
- Demo: Just like in Forex, practice makes perfect. You need to familiarize yourself with the binary trading platform and then jump in with real money.
- No Emotion: You need to constantly fight the urge to overcompensate for losses or ride the wave of success for too long when trading binary options. This is an underlying principle for any binary options strategy.
- Limits: Know your limits and do not pass them even by a little margin. Once you let yourself go, it is a slippery slope. Define your boundaries and stick to them no matter what.
- Getting out: Lastly, binary trading just like Forex is not for everyone and every day is not going to be your best day. If you see yourself falling, get out while you still can. Tomorrow is another day and you should always reserve the option to reach the truthful and sometimes painful conclusion that binary options trading is not for you. That is also part of a binary options strategy.
By: Hillel Fuld