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Mistakes to Avoid as Binary Options Trader
Are you interested in investing in binary options?
If your answer is yes, then you are on the right place to gather valuable information about to become a successful trader.
This guide is intended for all South African traders who want to learn all tips and tricks of profitable binary trading and of course, discover mistakes to avoid as binary options trader.
As you might already know, binary options industry began in 2008 on global market, and very quickly became searched online investment type in South Africa.
In a short time, binary trading on South Africa became field of interest to many ordinary people in South Africa, who wanted to participate on financial market and earn money.
So why is trading binary options popular?
Possibility to invest in different assets as beginner trader and maximize profit is something that is appealing to most people, which is understandable. It is everybody’s wish to have successful trades, especially when there are plenty of traders who have continuously positive trading results.
There are different ways on how to become pro trader and what does it take to avoid scam in binary options. Therefore, we believe how our guide on mistakes to avoid as binary options trader will be of help to interested South Africans.
The initial and most important step of successful binary trading journey is to find a reliable binary broker who offers secure trading platform. Once traders succeed in that, the biggest issue is solved.
Below we will provide you with relevant information about possible mistakes to avoid as binary options trader. This is very important for traders to reduce risk and have profitable trades only.
Having Unrealistic Trading Expectations
This might seem as a little thing, however it definitely isn’t, especially for new and inexperienced traders.
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So why is that? This is a big mistake, done by many new South African traders. Since there is no previous financial knowledge, traders right away think how they will earn high profits without any strategy and in their first trade.
Having high expectations is good, but unrealistic ones are those to avoid. Although many brokers, including reliable ones, offer high return on investment, is doesn’t mean that traders shouldn’t have a strategy by which they would place trades.
Unclear Terms & Conditions
This also comes as one of the mistakes to avoid as binary options trader.
Unclear terms and conditions are closely related to scam brokers who don’t provide significant information to their traders, such as this one.
If South African traders are planning to invest in binary options, it is highly recommended to check broker reviews and get detailed information if a broker is safe enough to trade with and earn money.
With most scam brokers, T & C will be either unclear or even missing.
This is something that traders should keep in mind before they deposit. Professionals know these things but new traders still don’t have sufficient knowledge and that is why they should be cautious.
Brokers listed on our website are reviewed and offer secure and protected platform for traders in South Africa.
Regardless of platform type and available features, platform should be easy to use in order for traders to navigate over it without any difficulties.
Poor Money Management Plan
Non-existing money management plan is definitely considered as one of the mistakes to avoid as binary options trader.
This is probably one of the main reasons why some traders fail in binary options trading. Successful traders spent a certain amount of time analyzing market situation and different trading assets to be able to accurately predict price movement.
For those traders who don’t want to invest time in the trading process, can choose auto trading option. Trading with free automated software is simple and yet profitable, therefore traders can check our Binary Options Robot review to know more.
So to have a good money management plan, traders should make a logical plan combining strategies and market news which reduces risk level. Having a bad strategy which traders don’t understand is mostly likely to be leading to failure and that is something South African traders want to avoid.
Choosing to Gamble Instead of Trading
Binary options traders should have in mind how trading isn’t the same as gambling and there are more than one difference which support this fact. Gambling relies completely on luck, however if traders do the same thing for binary options trading they will experience losses.
Binary options trading requires more serious and business approach. It means how traders should try out different strategies to see which will work the best for them and lead them to money gain.
Having a good strategy plan, discipline and clear head are great characteristics to start binary trading journey and succeed in it.
Get the Most from Education Guide Materials
One of the reasons why binary trading is widespread among traders in South Africa is because they made online trading more accessible to ordinary people, and not just professional traders with years of experience.
South African traders are able to trade with many trustworthy brokers who operate on South African market. They all differ by certain characteristics and available features, but also enable traders Education Area.
Why are education materials relevant? Depending on a broker, traders can choose among many useful education materials which can be out of great help and assist traders to become more experienced. Brokers, such as 24option, IQ Option etc are considered as leading binary options brokers.
On their platforms, they offer a wide selection of guide articles and tutorials which should be sufficient for both inexperienced traders and pro traders. Also, FAQs, webinars, glossary and different guides are on traders’ disposal. Thanks to its advantages, there is a big chance for new traders to avoid beginners mistakes when trading binary options.
7 Mistakes to Avoid in Binary Options
Thanks to binary options popularity in recent years, an increasing number of people around the world began investing in binary options.
South African market is one of the most presented areas considering interest in binaries.
Ever since 2008, binary trading is widespread online investment option for many South Africans, especially those are new to trading on financial markets.
It provides them with an opportunity to have a potential profitable trading journey, regardless if we are talking about beginners or professional traders.
Our guide on 7 mistakes to avoid in binary options will reveal more information on how to avoid scam in binaries and increase chance to have a successful binary trading journey.
What we want to achieve is to provide valuable info and educate traders in South Africans to be able to recognize top 7 mistakes in binary options trading.
Trading Binaries with Scam Binary Brokers
From our point of view, binary options trading with scam brokers comes as a the biggest danger in binary industry overall. Due to its popularity, unfortunately, an increasing number of brokers appeared on the market and some of them can be listed as scam brokers.
There are several signs how South Africans can recognize if they are dealing with scam or not.
One of the first elements are Terms & Conditions of a particular binary broker. If a broker doesn’t offer clear and transparent information on its platform, it is definitely one of the major indicators how traders are dealing with a scam broker.
For this reason, we recommend traders to gather valuable information first, such as doing a research and reading broker reviews to get an objective info about a specific trading platform.
Don’t Miss an Opportunity to Use a Demo Account
A lot of brokers listed on BinaryOptions.org.za site offer demo account as an important segment of the platform, especially for inexperienced South African traders.
Thanks to demo option, registered traders are able to see how will the trading platform look like and try out different strategies to see which one will work the best.
As a major benefit of demo account is the fact traders don’t actually invest their own money but instead they are offered with virtual funds. This way, there is absolutely no possibility of money loss. IQ Option is a popular broker for South African traders who provides them demo account, which is funded with $10000.
Time frame for practicing on demo depends on a binary broker. With some brokers, it is unlimited while others offer demo for a period of one of two weeks. Demo account is used both by inexperienced traders as well as professionals since it enables them to test the platform in risk free environment.
Never Neglect Importance of Binary Options Education
Traders who invest in binary options should be aware of the fact how relying solely on luck factor isn’t a desirable element in this online trading industry. From our experience, a wide range of binary brokers offer platforms with excellent Education so that traders can learn more and become experienced binary options traders.
Education with a variety of trading materials and tools is very valuable and useful for all levels of traders. Mostly, they include: ebook, a selection of webinars, FAQ, trading tutorials, guide articles, economic calendar and many more others.
By having education materials on disposal, both beginners and professionals can benefit from it. Traders novice can learn trading basics and from where to begin, while experts can try out advanced strategies and expand their existing knowledge.
Trading Binary Options without a Trading Plan
When trading binaries, binary options trading plan needs to be incorporated due to its many advantages.
Lack of having a trading plan is definitely one of the major 7 mistakes in binary options. This is why beginners should have that in mind before they engage themselves in binary trading world.
Luck factor can sometimes help, but it isn’t something that South African traders should have confidence in. Since binary trading is not a gambling and several factors need to be included so that traders could have a profitable trading journey, we find having strategy trading plan is more than desirable option to have.
The whole idea of a trading plan is to reduce a risk exposure and trade with those underlying assets that traders are most familiar with. This is why successful traders spent time into making a good trading plan by which they will invest their money in binary options..
Those traders in South Africa who don’t want to spend a lot of time in binaries, they can choose automatically option, such as with binary robots or automated software.
For example, one of the best auto trading robots are Binary Options Robot and Qbits MegaProfit System.
Unrealistic Trading Goals – Binary Options in South Africa
When traders have unrealistic goals for this online investment, we can say it is actually often seen situation in binary industry and falls into category of the most often mistakes when trading binary options.
Sometimes traders beginners begin their trading journey by investing a large amounts of money in different assets, without thinking it twice. This is closely related to non-existence of trading plan where traders believe they will gain thousands of dollars instantly.
It is recommended to think positive and have big plans, however, unrealistic trading goals and its expiry time are a mistake that should be avoided. With many brokers offering high payouts, traders in South Africa do have option to profit from binaries, but with “cool head” and clear vision of which underlying assets to invest in (stocks, commodities, currencies and indices).
Investing More Money than Affordable
Another often seen mistake in binary trading is when traders decide to invest a huge amounts of money, more than they can afford it. Doing that without a trading plan is definitely not a good starting point and might lead to money loss.
Usually, traders start trading with approx. 50% before they see how binary trading looks like and which underlying assets are most suitable for them to use. It all depends on traders’ preferences and current market situation on specific underlying assets.
Binary Options Overtrading as a Trader in South Africa
When thinking about trading binaries, a lot of traders make a wrong move and then overtrading becomes a problem they need to fix. We have mentioned it several time on our site under Guide tab and traders should realize how it desirable to trade binary options but smartly.
Often traders experience overtrading if they trade simultaneously with stocks, currencies, commodities and indices. This comes as one of the main differences between professional traders and beginners, who are in most cases impatient and want to earn a lot of money right away.
That is why we suggest traders in South Africa to check broker’s platform first and read broker reviews to get more info about a specific broker and what does he offer to registered traders.
Binary Options Strategies
Many will say that binary options are a thing of mere luck. You either guess or not, right? Wrong! Binary options are not gambling, but a form of financial investment that offers an innovative way of participating in financial markets. To be more successful and increase your chances for positive results, make sure to implement binary trading strategies.
Binary strategies are used for mindful binary trading. Most of them have several steps that guide the trader through analysis and help them achieve the desired goal. Also, there are some simple strategies and more complex ones, so every trader can find one that suits him best. Don’t forget that strategies can also be combined and should be revisited every now and then, especially in case some of them turn out to be less successful.
Most traders prefer to start with simple strategies and progress towards more complicated ones, especially as they become more familiar with binary options trading. Some might say that it is impossible to predict binary options trading results, but market changes can be predicted when the right approach and strategy are used. Whether or not will one accept the results of the analysis or will decide to trade on the hunch is another thing. However, proper education should never be neglected.
Top 5 Starting Strategies
After you have officially decided that you will start your binary options trading journey, you will quickly find out that this is not a game or a luck, but a project that needs to be strategically put together if you want to have a possibility of being successful in it. This is why binary options strategies are the way to go. However, not all strategies are alike and not all can be applied in every possible trading setting.
As with anything else, there are plenty of strategies you can find online that are connected to binary options trading, but you need to be careful which ones you will be choosing and why. The most important thing is that you feel comfortable with the ones that you do end up picking as your go-to strategies. With all this in mind, it is important to highlight that binary options trading are very much dependant on the fluctuations of the global market which is a huge system of every changing variables, but even in something that seems so chaotic, there are certain rules that can be applied and followed.
Not one strategy is foolproof, which means that there are never any guarantees that any of the strategies you choose to employ is going to always work. This is why it is never a good idea to place all your funds into one trade. This is simply not a smart move from a strategic point of view. You should always diversify the funds that are at your disposal to several different investments – ideally no less than ten trades. This is a great approach because it allows you to leave room for the possibility that not all of your trades are going to end up in the money.
Five Minutes Strategy
This particular strategy is a fairly simple one. It is founded on the premise that the majority of the brokers on the market will allow you to buy options within the 5 minutes of their expiry time. The strategy is basically that you then invest some time into manually searching the global market in search of an asset which has a pretty consistent growing or declining trend. Regardless of the fact that this might seem like a guarantee, we urge you to keep in mind that binary options trading is unpredictable in the majority of cases and you always need to be prepared that things will not go as planned.
While certain very experienced traders will often use this strategy, we have to note that this is a very risky one as it primarily relies on the factor of luck. The basic premise of this strategy is that you always double next amount you are going to invest and you keep doing so until you actually win a trade. So if you lose a $100, your next trade should be $200 and so on, until you will a trade. As you can see, it takes a lot of psychological stability to keep using this strategy because if you give up while you are on your downward spiral, you will end up losing a lot of money. However, you are able to track down a trade which is very stable in its grown or on its downtrend, for longer periods of time, you could assume that the trend will stay the same and place your trade on this one.
15 Minutes Strategy
The 15 minutes strategy implies that you track an asset on the 15 minutes time frame and if the 3 consecutive candles are of the same shade, you wait for a rollback. This strategy is also something that is worth going into a lot of details with as it is not the easiest of the strategies, but it could prove to be a good fit for certain traders who are already fairly experienced with the market trends.
Triangle strategy basically instructs the traders to trade when they notice an increase or decrease of the price but only if the corresponding chart has actually formed the figure we need in this case. When we have an uptrend, the triangled that is formed in the chart will be and ascending triangle. In the descending triangle it is clear that the trend is going downward.
How to find a perfect strategy
Obviously, a lot of binary options traders in South Africa are on the lookout for their perfect strategy. This raises the notion that there is such a thing as one perfect strategy for everyone, which will determine your trading success. This is clearly not the truth as it is impossible to find a single strategy that will work each and every time you apply it simply because the market is prone to a multitude of fluctuations on a daily basis. We will, however, try to answer the question most of you must be wondering: ‘how do I find a trading strategy that will suit my needs?’
By looking at certain main points that are important for every strategy, you will soon find out what is and how to find your perfect strategy.
The Perfect Strategy For You?
There is nothing more deceiving than believing that you will find one perfect strategy that will work every single time. That simply is not going to happen, and most of all, that should not happen as this would completely shatter the foundations of the global trading market itself. However, like we mentioned before, some strategic moves can be beneficial to your investment plans and smart traders know that.
There is no single strategy that everyone can use but there are ways to find out which would suit you the most considering your trading needs and overall investment plans. The best thing you can do is not to look at what has been working for other traders, because other traders are not you. You have different aspirations, goals, investment plans and techniques so naturally, applying a strategy that has worked for someone else and expecting it to work the same for you is simply not realistic.
Character Type is Very Important
Each individual trader is different so it only makes sense that you do not believe when another trader tells you that they have the most amazing strategy that has worked for them, and that it will certainly work for you. In addition, do not copy other people’s investment plans as you will not be able to get the same results so it really does not make sense.
When choosing a binary options strategy that fits your character and your trading needs you need to keep in mind that you have to adequately assess your psychological tolerance to stress and potential losses. This will determine which strategy you can feel comfortable with and then you can calculate all the other variables necessary for the decision.
One thing you could to to test things out is to try out several different strategies so you could find out exactly how they work and how they might be managed to suit your particular needs. This is best done via brokers Demo account as you can experiment in a risk-free environment in this case.
Do you need a perfect binary options strategy?
If there is only one thing you will take from this guide, let it be the fact that you actually do not need a perfect strategy. Yes, this might sound like a very big contradiction to everything we have said so far, but if you think about it, it really isn’t. You do not need a perfect strategy because the isn’t a perfect strategy anywhere, but there is great strategy that might be a good fit for you. This is the most important difference – you need a strategy that can be successful and which makes you comfortable using it.
Considering there are so many trading options and features you can use to customize your trading strategy it is impossible to say what exactly you need to do to set it up to work for you. The best way you can come to any kind of a conclusion is to activate a Demo account with a great binary options broker which offers one and get accustomed to your trading surroundings and the way in which the customization is affecting your trades.
As long as you are being successful with your trading approach, and your profits do outweigh the losses that are bound to happen from time to time, do not burden yourself with the thought of a perfect strategy but rather focus on what is in front of you and grow your experience accordingly.
Binary Options Rookie Mistakes
When trading binary options, many traders in wonder how to trade successfully and avoid rookie mistakes in binary options. This is a very important question since all traders want to have positive trading results from the very beginning and to achieve that, they should invest wisely when trading binary options.
Some of the most common rookie mistakes are:
- Overtrading and forced trading
- Not having a solid trading and money management plan
- Lack of education
- High self confidence
- Rushing with trading
Further in this strategy article, we will provide more detailed information regarding how to avoid rookie mistakes in binary options.
Avoiding Rookie Mistakes – the Initial Step
As a key factor how to avoid rookie mistakes in binary options is to have a good strategy plan. This is important since traders can’t rely just on luck element if they are planning to trade binary options for a longer period of time.
In case of investing in shorter periods of time, such as 1 minute, there is no point to make a plan or study trading charts for 4 hours period if expiry time will be very short. Therefore, strategy plan has to be in accordance with expiry time, otherwise trading process will not be successful and originally planned.
All binary traders also have on disposal to use patterns which can also be useful when trading with different assets in binary industry. Trading patterns, such as flat pattern or zig zag are helpful in providing traders with detecting the best expiry time of chosen asset.
Choose the Right Time of Expiry
Unlike trading on different financial markets, in binary options traders need to set on their own desirable expiry time for asset they want to trade in. on some occasions, traders can feel disappointed when asset price stays “in the money” during with entire time just to change price direction when final results becomes a failure.
This is a common rookie mistake for majority of beginners, since they are faced with an expiry time which is not set properly as it should be. It happens when market goes in predicted direction but it doesn’t stay there for entire trading period.
Money Management for Rookie Traders
Having money management plan is a good ticket that will help you avoid rookie mistakes in binary options. This is very significant when trading binary options since traders’ goal is to eliminate bad trading results.
So careful approach in creating a good money management plan can be to divide funds in several equal parts and afterwards, each divide in smaller amounts. Such diversification is desirable since it is advised not to keep all “eggs in the same basket”. Binary options traders are able to choose between expiry times of few minutes, hours up to trading expiry by end of week, month and even 150 days.
Traders who prefer riskier trades, often choose trading with 60 seconds or up to 2 or 5 minutes. However, if traders’ goal is to invest in binary options for longer period, they will most likely invest in expiry times by end of week or month. In this period of time, they are able to plan their moves and perform a right strategy.
Try Demo and Be Focused
Binary trading is not a profession for most traders. Binary traders usually have careers in different fields, and as everyone else, are prone to stress and have to face many challenges. It can easily happen that you lose control and focus.
One of the main benefits of binary options demo accounts is that they will prepare traders for binary trading. There is no real money involved and trader only has to place trades with virtual money. The demo trading platform has everything just like the real trading platform, but it is also offering no real profits. The virtual money makes every win virtual, but also helps to understand the platform better and avoid losing the concentration when real trading takes place.
Traders should also be rested, and try to control the level of stress. Stress can be caused by different trading factors such as unpredictable market movement or a lost trade, but also by different situations in our private lives. Rush hour, family relationships, business problems or simply a long line in a supermarket can cause stress.
That is why it’s so important to learn stress management from the very beginning. Always try to focus on trading, try to isolate your emotions and be objective when it comes to trading. Don’t let overconfidence control you when you are winning, or fear block you when you are not achieving your goals.
By implementing technical analysis and other trading tools, traders in South Africa and all over the world have an opportunity to avoid rookie mistakes in binary options, such as overtrading and start their trading journey with a success.
Best Choice for Beginners — Free Education + Free Demo Acc!
Sign-up and Get Big Bonus:
2nd place! Good choice!