Often tagged as one of the most exotic options in the Forex niche, binary trading has a class of its own. The ROI profits are high here no doubt, but you can’t undermine the risks of big losses if you don’t play the stakes right. Are you interested in binary trading? Well, that’s amazing, but you have to be really careful about the five top blunders that are very common with the amateur binary traders.
No thought of money management
Binary trading is a profitable, yet risky zone and if you have not calculated how to utilize your money here, you would be standing at a rough, dangerous edge. Do not get into trading without a preset bankroll. The wisest and seasoned binary traders generally proceed with a pre-defined capital percentage and would never alter that, whether they are losing or winning. The experts always suggest allocating around 5-10 percent of the account balance for every trade.
Mindless asset hopping
A lot of amateur traders tend to hop or shift from one asset to another randomly, whenever one sounds more secure or lucrative to them. However, the fact is, there are some really moody assets that can fail you quickly. So, in your initial years, you must start with one or two assets and focus on learning about their specific behavior one by one. This way, you can gain a comprehensive knowledge about these assets and progress accordingly. Wild hopping between assets with no such time dedicated to studying them is really risky here.
No idea on market news
If you are serious about binary trading, you have to be involved in the market and not staying updated would mean a mindless trading- often running in losses. Thus, you should be thorough with daily market news as offered by Optionsxo to understand which stocks are declining and whose prices are on the rise. The market reports and news data that could have huge impacts here are announcements of interest rates, quantitative easing, or jobs data.
Trading with non-regulated brokers
Some novice binary traders often make the mistake of settling with the first broker they come across, without any checking on the broker’s viability- and without knowing whether the company is regulated or not. The non-regulated brokers are infamous for playing with investors’ money and so, you must be really particular here. Make sure your chosen broker company is a legal, certified, and regulated entity such as Brokers at WMoption. The regulated brokerage firms are accountable for whatever they do with your money, which eliminates the risks of money laundering.
Many amateur binary traders are run by this false notion that the more trades one carries, the higher the profit would be- but the translation is not the same always. In fact, overtrading within a brief time span might mean harm to an investment strategy. Yes, you can attain a long, successful spell here with so many trades, but have you considered the flip side? Some traders mindlessly harp on overtrading with the thought of reclaiming lost money when they are failing continually- without considering it might mean another set of failures as well. So, beware and stay controlled with your trading.