Binary options are an easy way to bet on the financial markets. You say which way the squiggly line is going to go, get your profit, withdraw it and spend it on your whatever your heart desires.
Quaaludes, prostitutes, cocaine and whatever else you might want.
Easier said than done. Firstly, you need to know which way the lines going to go. Secondly, drugs and illegal activities are only fun until you get put in prison. Or worse, you die.
To save you from financial ruin, I’ve composed this glorious list of important things that you need to know before you start wagering your now-dead grandmother’s inheritance on the market.
After all, you want to make her proud. Not have her haunt you until you’re dying day. Right?
1. Don’t Spend All Of Your Profits
And certainly don’t spend them on the list of debaucherous goods I listed above. If you’re going to get into fancy “financial masked” gambling, you need to have…
- Your head screwed on,
- money to risk
- and a safety net
If you take a big loss, then how do you propose your going to pay your living costs? Maybe you could sell some of the nice new clothes you bought when you took a stupid risk on GBP/USD.
2. Don’t Take Dumbass Risks
Some of these binary brokers allow you to get stupid 10:1 returns on your trades. You put down 10, you get 100 back. But the chances of this coming in a minimal.
Of course, if you’ve got a sneaky tip or an incline the markets gonna rocket and plummet, go ahead. Place that ridiculous bet.
For all intents and purposes, focus on taking smart trades in the right positions. Don’t just trade on your gut. Read, follow and consider.
3. Understand The You Are Playing A Game Geared At Extracting Value
When you place a binary trade, you often risk 100% of your capital for 70-90% gains.
So if you put down £100, you get £175 back. But if you lose, you lose £100. It doesn’t take a genius to work out that in the long run you are not going to profit without an edge.
A pretty big edge.
4. Choose Brokers With Good Rates
If you don’t have much of an edge nor much applicable intelligence, you can lower your chances of losing by going with a good binary options broker.
If you can increase your return on investment rate (the % you get back from your trade) then you need less of an edge.
You’re never going to find a binary options broker that is going to give you 100% return on investment. How do you think they make money? Yes, that’s right. They take your money.
Here are the brokers that I recommend you use:
5. Don’t Use The Martingale System, Please
Some of you guys out there are gamblers. Well, you need to be to take risks. But those of you that think you’re clever when you use the martingale system, let me just reiterate, you are not.
Drawing back to point 3, you are playing a game geared to extract value from you. So if you start doubling up every time you lose, you are going to lose a lot of money.
Listen to this guy tell you about it. He’s really well spoken and seems to know what he’s talking about.
6. Control Your Emotions
When you lose money its easy to be tempted to go to point 5. Or to bet more or things that you haven’t fully researched. All lead to bigger losses.
If you have trouble controlling your emotions do any of the following:
- Log out of the site
- Quit binary options and all forms of trading
- Meditate or do something to master your emotions
Don’t go thinking that buddha om chants are going to make you into warren buffet overnight thought.
Just to note, trading while intoxicated may be quite thrilling. Do not do it.
7. You Have More Chance Trading CFDs or Stocks
These financial options aren’t as complex as you might think they are. Plus, the brokers for these financial options take a small spread, instead of a fat 30% slice out of your profit pie.
I will continue to update this post as I see fit. I’m sure I will because there are loads of stupid things that people do when they trade binary.
Leave a comment below if you have any more tips for binary traders.
Until next time, Josh.