5 Mistakes Beginner Traders often make in Binary Options-JB88

5 Mistakes Beginner Traders often make in Binary Options

In binary options trading involving real risk, traders cannot underestimate the trading mistakes they have made. Small or large, a fixed error will have a detrimental effect on a trader.

Of the many mistakes that can be collected, there are 10 types that are most often done, especially by beginners. Therefore, this review will be very useful especially for newcomers who want to avoid the following common mistakes:

1. Less Can Set Amount of Deposit

Deposit trading should not be too big or small. A deposit that is too large can bring very high trading risks, while investing a small amount of deposit can lead to overtrading.

Broker conditions that allow traders to deposit with minimal amounts can indeed provide relief, but also can make traders "forget themselves" in opening options. This can happen because a minimal deposit amount can encourage you to place options with low capital. Because the risk per trade is also minimal, you can be motivated to place many options so you can get a high enough profit. This way of trading can ultimately result in a lot of losses, especially if the trader is more influenced by greed and cannot manage his trading frequency properly.

Tips: For that, you can make a deposit in the amount that matches your capital capabilities and trading skills. If the broker's policy requires a minimum deposit of more than $ 100, then take the minimum number for the deposit. However, if your broker has a low minimum deposit rule such as $ 10 or even $ 1, do not invest in the same amount with the minimum provisions. In addition, grow a realistic hope if you trade with a low deposit. For example, hoping to be able to directly earn hundreds of dollars in profit per month is unrealistic if the trader's initial deposit is only $ 20.

2. Lack of Trading Preparation

The first mistake was too soon to decide to jump into live trading without careful preparation. Although binary options can be traded in a way that is simpler than a forex spot, you still need to equip yourself with adequate preparation, from knowledge to a complete trading experience. Without careful preparation, you will easily find difficulties and often lose money.

Tips: The first preparation you can do is to explore binary options knowledge starting from the advantages and disadvantages, the types of analysis that can be done, to the need to build a solid money management. Second, you need to apply the knowledge obtained through a demo account. This is where you can get the trading experience directly. Even though it is still a demo, this free trading practice can provide a good picture of the binary options trading process before you open an option with real risk.

3. Less Understanding Short Term Trading

With a short-term expiry time offer of up to 60 seconds, binary options are indeed a paradise for short-term traders. However, making profits from this type of trading is not as easy as you think.

Tip: Opening an option with a low expiry time is considered likely to plunge traders into a way of trading that is full of emotions and speculation. Therefore, 5 things that must be done by short-term traders to be able to achieve success are:

  • Make a trading system and run it consistently
  • Set money management as best as possible
  • Reduce emotional involvement by not trying "revenge" when you experience defeat and not overtrade due to excessive self-confidence after experiencing "winning streak"
  • Train trading strategy, both on demo accounts and in real accounts with minimum capital first
  • Always remember that trading binary options is a business that is full of risks

4. Less observant in choosing a broker

You need to have a good precision in choosing a binary options broker. Many aspects can be considered such as regulation, payment method, rate payout, and much more. The many attractive offers from binary options brokers can make you reluctant to dig deeper information about the actual quality. Not only that, you also should not immediately trust the first broker you know. This can narrow your chances of getting better trading conditions at other brokers.

Tip: Comparing quality between brokers can be one way to choose a powerful broker. This method can provide a clearer understanding of the qualifications of a broker. If you only read a review of one broker, you will only get an overview of the broker without knowing the parameters for the actual broker's qualifications. In this case, you can read reviews of various binary options brokers, or see a list of brokers that have special specifications to get a direct comparison of broker quality on certain features.

5. Less Can Choose Trading Instruments

Instrument trading is one component that needs to be prioritized in various ways, such as choosing a broker, determining the trading system, and analyzing. Being unable to choose the right trading instrument will almost certainly lead to failure in your binary options trading. It is important for you to choose instruments that are easy to understand and analyze their movements.

Pair forex is one of the most traded instruments because it has the highest liquidity and large trading volume. However, there are also stocks, stock indices, and commodities that can be traded in binary options. You can choose one instrument that you have previously understood or diversified on several assets. The important thing is, choose an instrument that you understand well and can provide profitable opportunities. Do not choose instruments based solely on potential volatility without considering mastery of analysis.
  • Tip: Avoid these two bad habits in choosing an instrument:
  • Too many instruments to move, so they don't really master the price movements of each selected instrument. This will make you less ready to respond to changing conditions of these instruments.
  • Too trusting of assumptions about an instrument. Before you try trading with an instrument for a long time, do not make the general assumptions of an instrument as the main basis in the selection process. For example, you choose a gold commodity because it is considered to have good price movement stability. But the volatility of gold prices in the present seems not to support this assumption. So, it would be better if you choose an instrument based on your understanding of the price movements of the assets you choose.

Mistake is something that is inevitable because every human being must have made a mistake. What distinguishes the quality of a trader is how to deal with these errors. A winner makes a mistake and tries to learn and learn from the mistake. A loser makes a mistake and immediately gives up when he fails. However, a smart trader will try to recognize the mistakes that are often made and try to avoid them from the start. The decision to become a smart trader, winner or loser is in your hands. Take advantage of this knowledge so that you can achieve success as a winner.