Make Money with Binary Options
Look, if trading binary options was easy, everybody would quit their day job and start doing it. Not only that, but if everyone was profitable, the brokers would be out of business. At the end of the day, there has to be some losers. Well, guess what? You don’t have to be one of those losers…
So, what is it going to take to rise to the top? Well, here is some practical advice on how to improve your odds:
First things first, before you start putting your hard earned money to work, you need to have a strategy that works in order to really make money with binary options. For a beginner, I’d recommend ‘directional trading‘ to start off with. Depending on which broker you choose, these are referred to as High/Low, Up/Down or binaries. This is the easiest of kind of trading to understand. It’s a simple bet that the current price of the underlying will be higher or lower by the expiration period. In my opinion, the best way to analyze the underlying is by looking at a chart.
But here’s the thing…most broker platforms offer terrible charting. Have no fear, there are plenty of powerful charting platforms available for free online and we’ve reviewed binary options brokers with the best integrated charting technology. Now, if you are going to be a directional trader, you’ve got to use a chart. Sorry. But that’s the way it is. Of course, the problem with technical analysis is that there are a ton of indicators and patterns out there. You could lose your mind trying to explore all of them.
If you want to use something simple and easy to understand, it doesn’t get better than Ichimuko. (Learn more about this superb method here).
Ichimuko works best when the underlying asset shows a trending pattern. Here’s an example using the EUR/JPY:
The shaded area is the cloud, a strong break above the cloud signifies a bullish trend. A break below the cloud signifies a bearish trend. If the underlying doesn’t show a strong trend it’s not worth trading. Notice how this pair broke above the cloud in mid-November and has stayed above it. If a trader could have bought calls (above/up)…they probably would have done very well for themselves. By the way, the chart you are looking at is based on a 4-hour candle. This works best for currency pairs. If you are trading stocks, you can use the 15-minute candle.
After you’re able to identify the trend, it’s important that you select the right expiration period. It’s best to paper trade before you feel comfortable trading real money. Most brokers don’t offer paper trading accounts, so you’ll have to manually record wins and losses. Don’t worry, the markets aren’t going anywhere, it’s important to have an edge before you start trading. Most new traders jump right in…take in huge losses before they realize how this game works. Hopefully you’ll be smarter than them.
To recap, you want to be able to identify the trend and then start paper trading to see what time frames work best. Trading binary options in short time frames like 60 seconds is a great way to lose all your money. In my opinion, you are trading noise and just gambling with your money. Avoid very short term contracts. In addition, if you trade very short dated option contracts, you could eventually go on “Tilt.”
You want to be a trader not a gambler!
Second, don’t follow the crowd. If most traders lose trading binary options, why would you follow the herd? It doesn’t make sense. The best traders make the most money following their own ideas not others. If you don’t have any ideas yet, practice and paper trade. Don’t throw your money away.
Third, once you are ready to trade, you need to be properly funded. What does that mean? You need to give yourself enough of a chance to see your strategy play through. Not every trade is going to be a winner. With that said, you need to have enough capital to absorb losses. This also coincides with position sizing. If your trading account is small, you should be betting the minimum until your account grows. I know…you want to make money fast and lots of it, but you have to be patient in the beginning. Trading too big…too early is a quick and easy way to go broke.
The most important thing for a new trader is to gain screen time…AKA experience. You want to trade without emotions, which is a battle you’ll have with yourself. The best traders in the world are able to control their emotions. Remember, if this was easy everyone would be doing it. However, as you get better at this, your win-rate will almost certainly land you into the green more often!
All in all, you want to find a strategy that gives you an edge. Later, start paper trading to build confidence in the strategy. Once you are ready to trade real money, you want to take it slow and bet small until your confidence grows even further. Over-time, you’ll become disciplined. There is no shortcut, it will take hard work, but these are the proper steps that need to be taken. Good Luck on your Journey! Drop us a line to tell us how you’re doing…
