10 Reasons why Binary Options Traders Fail

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10 Reasons why Binary Options Traders Fail

In the recent times, the binary options trading has become very popular amongst professional as well as naïve traders. Unlike, other trading platforms, the binary options trading platform offers ease of trading, simple rules, very high payouts, and eye candy features to attract traders from all strata of the trading fraternity. The binary options trading also has some very advanced features like automated trading through which one just has to deposit funds and set preferences, and then the software does the rest by placing orders to keeping a tab on the transactions. The brokerage firms which provides the binary options trading platform also allows traders to use signal services to help traders in their decision-making process. Even with so much on the platter, the traders fail to make big and continue to bleed on the street.

In this article, I have identified 10 reasons of failure for the binary options trader to help readers to succeed. This article will help seasoned as well as aspirants of the binary options trading, to better understand that there is more than just “options” in the binary options trading.

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10 Reasons why Binary Options Traders Fail • Avoid These Simple Mistakes and Make More Money Instantly! • Including Secret Strategies! •

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    The following article provides detailed description about reasons for failure.

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    1. Ignorance to “Knowledge is the King”

    The easiness of the binary options trading platform and simple trading format makes traders avoid the knowledge part of the trading. It is not necessary that you should go through the formal education process for learning the binary options trading as the successful traders aren’t always with some formal educational degree. Generally, Individuals think that the trial and error is the best practice to gain experience about any trading. This is the first blunder committed by the newbie. Though, the trial and error can give you a knowledge in a bitter way of losing money and time, the learnings from various educational articles, e-books, strategies, technical chart reading, usage of technical indicators and news article regarding the binary options trading can help you gain better understanding, planning and execution of the binary options trade.

    The knowledge is the supreme in each and every facet of life and the binary options trading is no different. As a binary options trader, you should always be open to learning new things, even if it reduces your trading in order to achieve the larger goal. You should also invest time in learning technical indicators, reading charts and their implication to take the sound trading call. In the case of the binary options trading, technical parameters make much sense due to its short expiry duration and hence one should be able to learn and apply the knowledge gained in taking call for each and every trade.

    In today’s Glocal (Global + Local) world, the internet presents a plenty of information regarding the binary options trading and I recommend you to use the internet to search and digest as much information as possible to learn the binary options trading. Always remember that the knowledge is supreme and it never makes you poor.

    2. No research to find broker

    As it happens with all new things, the exponential rise of the binary options trading also attracts scammers to the field and hence one should do a serious research to find the legitimate broker for the binary options trading. Any aspirant traders should look for qualities like; where it is registered, what kind of regulations it follows, deposit and withdrawal policies, customer service policies, and security policy, besides payouts and other financial policies. Search for existing customer experiences with that brokers and reviews left by consumers to better understand the broker.

    Some brokers offer minimum deposit amount as low as $10 while others offer varying minimum deposit amount ranging from $200 to $250. While some brokerage firms offer minimum investment as low as $1, others allow minimum investment amount ranging from $10 to $50. The payout also varies from 60 percent to 200 percent and hence one should choose broker according to his/her requirements and which fulfills all his/her needs.

    A wrong selection of broker can set you up for a bigger trap to lose all your hard earned money, and hence, I urge you to devote sufficient time to find the right binary options broker.

    Failures occur every once in a while

    3. Avoiding Demo/Free Account

    All of us must have heard this phrase “Practice makes a man perfect”, and it makes a lot of sense when undertaking any kind of trading, specifically the binary options trading. To give you the feel and hands-on experience, almost every binary options brokerage firm provide a practice account (Demo Account or Free Account), wherein you are given a virtual currency to trade in the actual trading environment. The newbies generally avoid this demo/free account and jump on to real money to try and learn through trial and error, in the process, losing a significant amount of money and desire to continue trading. The demo accounts allow you to deploy various learnings and strategies and find the outcome, which can be very useful when you trade with a real account. You can also help you assess your trading style and show you the outcome, to further improve your winnings.

    Demo account helps the trader to apply the learned strategies on the real environment and allow a trader to identify which strategy work well for him and which does not work well. By practicing on a free account, the trader can optimize the workable strategies and possibility to start its real money account on a positive note.

    As a thumb rule, one should at least spend 2

    3 weeks on a demo account or a free account to gain confidence and improve winning percentage, before starting with the real money account.

    4. Get Swayed by emotions

    Normally, we consider that any financial transaction is emotionless, but a simple glance on an average trader shows otherwise behavior. As normal human beings, we are prone to get influenced by our emotions. Continuous loss-making trades makes us angry and frustrated resulting into more loss-making trades, in turn, a mounting losses. On the other side, the winning roll makes us overconfident and in turn, makes us lose our objective and ignore some basic trade influencing aspects to make a wrong future trade. So it is imperative to understand that every trade should be a well thought out decision, in whatever streak you are. Don’t get your emotions take over your trade, as it may hamper your profitable trades and may sway you to make an irrational decision which generally results into loss-making propositions.

    One should be calm and composed for each and every trade, and the trade should be a well thought out decision than an emotional one. If you are showing an irrational behavior then you should stay away from any kind of trading, as emotional decisions are always irrational and lead to considerable amount of loss to the account holder.

    5. Putting everything in a one shot

    The naïve traders generally put up the maximum possible amount in a single trade and loose everything in a one trade leading to frustration and giving up on trading. These further sways traders emotionally and compound losses. One must consider starting a real money account trade with minimum investment amount and build up once you gain confidence. Though, with the smaller amount it takes longer to make considerable profits, it helps to minimize your initial losses.

    The binary options are a truly retail trade industry as it allows minimum deposit as low as $10, and minimum investment amount of $1. So, my recommendation for retail the trader is to start with small investment amount and then increase the investment amount as confidence grows. This way you will not lose your hard earned money in one go and you will be able to manage your money well.

    One can never avoid all failures

    6. No planning or strategy

    Though the binary options trading is a simple form of trading, it is still a form of trading. Many newbies think that to trade in a binary option, you just need to signup, deposit funds, and trade. Though they are correct, they forget that a good plan can take their trading business to flourish. Planning ensures that each and every trade undertaken is with thoughtfulness and knowledge resulting in better-winning chances. You should always make a plan before trading for how much to invest, where to invest, and when to invest. Your plan should also incorporate sound money and risk management techniques giving due consideration to the possibility of making a loss. In addition, one must be flexible enough to make required changes in the plan, in case your plan doesn’t work as intended.

    Well, planned trade execution can minimize your chances of losing money, and increases the chance of winning trades. You should consider each and every trade as a business transaction and plan for each trade and never jump on to trade without planning for the trade.

    7. Too much too soon

    In the binary options industry, as in any other industry, there are brokers who make false claims that you can make too many profits in a shorter time period. Such claims make traders believe that the binary options trading is quick-rich-get-scheme. Actually, the binary options trading is a profitable business only if one is organized, rational, knowledgeable, flexible and enduring. You have to remember that nothing comes cheap in the world, and everything has a price attached to it. The binary options trading is not a quick-rich-scheme and you should never get influenced by the false claims of the broker.

    The trader must control their own greed to overcome such false claim, and understand that it is also a business which can have both ups and downs. Also, traders must realize that the binary options trading is still an another type of financial trading and where no one becomes rich overnight. Hence, one should have rational and realistic goals before entering the market.

    8. Everything is constant

    Another biggest misconception in the minds of the trader is that the market is constant and nothing changes overnight, in reality, nothing is constant except the change. Traders who do not understand that the binary options trading industry is affected by various micro and macro factors, tend to fail. So it is important as a trader to understand what affects the changes in the market and should be flexible enough to adapt to the trading environment changes. We have a natural resistant to change, but as a trader, you must overcome and treat the change as an opportunity. Skilled individuals are more consistent with their adaptation of changes and comprehend changes better.

    Always remember, the only thing constant in the world is the change and no one can stop the change to happen. You should develop skills and your thought process in such a way that you are always ready for the changes, and be able to bend your plans accordingly.

    9. Lack of risk management

    To become a successful binary options trader one should learn strategies, but strategies only cannot make you a successful binary options trader. One must have adequate money management and risk management techniques in place to become an effective binary options trader. The zero risk management is sure to fail the trader as it won’t allow them to look at the bigger picture and manage their risk. No risk management makes trader take high-risk trades and lose big, and risk management technique can help traders to evaluate the market condition and put appropriate measures to minimize losses. One must understand that it is equally important to minimize losses and making profits in order to attain a long-term goal of becoming successful binary options trader.

    By putting risk management practices in place, the binary options trader protects their money from evaporating via big losses and always have standby conservative plan to continue with trading.

    10. You Think It’s Gambling, Instead of a Business

    One of the biggest reason for the failure of the binary options trader is that they consider it as gambling and not as a trading business. Trader considers it as a gambling because of its structure of nothing or payout. The mistake of considering the binary options trading as gambling makes traders take undue risk and not considering as a sound business makes trader not to put sufficient efforts to learn it, resulting into higher chances of losing money.

    Business owners know that short run losses and profits don’t matter in order to achieve the larger longer run gains. As a trader, you should also consider it as a business, and evaluate every profit/loss on the trade in order to perform better in the future. As a business owner, you should plan, set a rational goal, stay disciplined and organized to take your trading business on next level. The binary options trading is not a gambling but can become a potential money earning business if considered as a long term profession and not as a short-term gambling entertainer.

    All traders fail sometimes.

    Conclusion

    The binary options trading is a lucrative business opportunity if an individual put efforts to learn the nitty gritty of the binary options, and show disciplined approach to it. The binary options trading is very attractive due to various reasons like 24 x 7 access, high payouts, and low account requirements. It can be a rewarding if you consider following highlights:

    • Devote sufficient time to learn the theories behind the binary options trading.
    • Put efforts to research right, legitimate and suitable broker.
    • Make full utilization of demo/free account and use to at least for 2 to 3 weeks before starting real money trading.
    • Emotions act as a deterrent and should be put aside before starting a business and consider each trade with rational and sound logic.
    • Never put all your money in one go, always do staggered trading.
    • Prepare and plan well, and then stick to plan to execute your trades.
    • It’s not an overnight get rich scheme, it requires proper planning, organized and attentive behavior, sound knowledge and dedication to learning in order to become successful binary options trader.
    • The market dynamics are there to chance very often than one would like them to, and hence you should be well prepared for changes.
    • Learning strategies is not the only thing which can make you successful trader, you also need to put sound risk management and money management techniques to minimize losses.
    • Consider it as a business venture and apply organized business approach to be successful binary options trader.

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    Main Reasons why Traders in Binary Options Fail

    As a trader in binary options industry, it is on everybody’s mind to ensure as much possible profitable trading journey and learn what are the most common and main reasons why traders in binary options fail.

    When one reflects on binary industry in the last 8 years, it is visible what popular industry of online trading this is.

    One of the main reasons what attracts so many people to binary trading is ability for professionals and traders novice to join this industry and invest in binaries, regardless of their level of trading knowledge.

    Shortly after appearance of binary options, traders around the world, as well as those residing in South Africa were introduced to binary automated trading.

    It means that South Africans can get access to auto trading software and let these binary robots to place a trade according to traders’ wishes.

    This opened a whole new window of trading binary options in South Africa since inexperienced traders who want to participate on binary market and if possible, have a simple and yet profitable binary automated trading journey.

    One of the top reviewed robots on South African market are:

    Read further our binary guide on what are the main reasons why traders in binary options fail.

    Trading Binary Options without Having a Strategy Plan

    Generally, binary trading can be quite simple and it is actually, trading with just two options. To be continuously successful, traders in South Africa need to invest into their trading knowledge and not only on luck.

    For example, if they expand their level of knowledge, discover more trading tools and strategies, they will have a better option to maximize profit and earn money from binary options brokers.

    This is definitely one of the main reasons why traders in binary options fail. Strategy plan is really important into ensuring traders to have a general plan of in what to invest, how to trade and how much money is the best sum to invest (for beginners and experts also).

    There is a path from being a beginner trader and expert trader, especially in terms of knowledge level and understanding of how binary trading works. The best starting point would be to make a plan, set a list of underlying assets and preferred amount of money and make investments according to this trading plan.

    The relevance of such behaviour is to know what to do when investing in binaries and find the best option to reduce the risk exposure and avoid having unsuccessful trades.

    Lack of Education

    When trading binary options, education becomes an important part, especially in terms of selecting a binary broker to trade with.

    Although now, there is an increasing number of brokers who prepared a good Education, there are still some brokers who offer insufficient education materials to traders in South Africa as well as around the world.

    Some of the top reviewed brokers by our opinion, offer extraordinary education to interested South Africans.

    Brokers, such as 24option, IQ Option or Opteck provide an amazing list of education materials which can be very beneficial.

    For example, ebook, economic calendar, a variety of strategy and guide articles, webinars and trading tutorials are on traders’ disposal.

    Also, it is important to mention how good Education often offers materials, combined in different segments, such as education for beginners, intermediate and advanced level of trading knowledge.

    Ignoring Binary Options Demo Account

    In binary trading, demo account is a wanted trading feature that has many benefits and can greatly assist South African traders. On demo accounts, traders can get opportunity to see how will the trading platform look like and try trading on it.

    What comes as the major benefit when trading on binary demo account is the fact it is risk free trading. It means how traders on demo don’t invest their real money but instead a broker who offers demo, provides them with a specific amount of virtual funds. Therefore, there is no option for South Africans to lose any money on demo.

    Demo version of the trading platform can be valid for some short period of time or can be unlimited. This however, depends on a specific binary broker. One of the best platforms which offer demo account option is IQ Option broker – a popular binary broker on South African market.

    Demo is especially significant to traders novice who plan to invest in binary options.

    On demo, they can practice how to trade, select several trade options and see how will the market react. Also, different types of strategies can be used and tested on demo account in risk free trading environment, which we find to be excellent and very useful to all registered traders.

    By neglecting practice on demo, traders can make a trading mistake which can later on reflect on potential unsuccessful trades, which could be avoided easily by trading on demo. For that reason, this also comes as one of the main reasons why traders in binary options fail.

    Having Unreasonable Trading Goals in Binary Trading

    Unrealistic trading goals are by far something we think traders should avoid when joining binary options industry. All traders want to earn huge amounts of money but they should be reasonable and understand this industry contains risk and one should be wise before depositing.

    If South African traders experience right away unsuccessful trades, they will most likely go on downhill path and it is our goal to inform the traders to trade smartly.

    This binary mistake often happens to traders beginners who don’t know from where to start and then begin to deposit a lot of money in different underlying assets right away which isn’t recommended unless traders have a trading plan.

    Combined with having a trading plan, traders should keep in mind how discipline is also important factor when trading binary options. South African traders should be disciplined in terms of trading binaries according to the plan and current market situation. That is why we can say how staying focused in one of the toughest elements to learn and apply.

    Since bad trading decisions lead to money losses, we think that key is in having a “cool head” with a trading plan and having enough confidence in traders themselves to be educated and disciplined.

    8 Reasons Why Binary Options Traders Fail

    By Markus Silvester – October 22, 2020 9:57 am

    Binary options have become one of the most popular ways of trading, especially when it comes to non-professional traders. High returns, easy to understand rules, user-friendly platforms and alluring features make trading easier than ever. There is also the possibility of using automated trading software when trader only has to set its preferences and make a deposit, and after that a highly advanced trading software developed by experts places trades instead of them.

    One of the best trading software is Binary Options Robot. You can find more about it here. Most of the brokers offer signal service to their traders as well, which makes decision-making process even easier and gives better and more pleasant trading experience. And yet, some traders fail to make a profit.

    In order to help existing and potential traders to succeed, we created a list of 8 most common mistakes traders make when it comes to binary options trading. We hope that this overview will make trading more straightforward, but also that it will remind traders that there is more to binary options trading then “put” or “call”.

    Here are the 8 most common reasons why traders fail.

    1. Neglecting the Education

    Binary options trading seems easy, and that is why some traders neglect the importance of financial education. Education doesn’t have to be formal, and successful traders aren’t always those with a business degree. Trial and error strategy might seem like a great idea to the inexperienced trader, but professionals would disagree. Instead of wasting your time and money on this poor strategy, it is better to spend some time reading educational articles, and e-books, researching brokers, various strategies, graphs and features and following daily financial news etc. Knowledge is power in every aspect of life, and binary options industry is no different. Always be informed and ready to learn something new, even if it means placing fewer trades.

    To get the most out of your trading experience and make more profit, make sure to visit our Academy that offers plentiful of articles that will help you understand the world of binary options.

    2. Ignoring the Demo Account

    Even experienced traders sometimes ignore the demo account provided by the broker. They know everything there is to know, right? Well, the truth is quite opposite, as every broker is different, has a different trading platform, various features and trading options. Demo account gives the trader the opportunity to research the platform, see how the trades are set, and get some general overview over the platform. Other than that, every broker lets traders invest virtual money in order to develop their strategies and see how it feels to place trades, which means that traders don’t have to spend their real money in order to get accustomed to the interface. If the chosen broker gives its traders the opportunity of a demo account, be sure to use it for your own personal growth as a trader.

    Many brokers recognized the importance of demo account, so sign up with brokers that offer a demo like

    IQoption is a broker especially recommended to the newbies as they offer demo account without the initial deposit.

    3. Lack of Discipline

    One would think that financial world is completely cold and emotionless, but just a simple glance on the average trader will reveal that it’s not always so. As human beings, traders are prone to get under the influence of their feelings, whether good or bad. Losing streak may cause frustration and anger, which usually lead to making bad decisions and forced trades. Winning streak gives traders self-confidence and they tend to neglect some objective factors that may influence their future trades. No matter what your streak looks like, remember that every trade should be thoughtful, with all influences taken into consideration. Be patient, observant, calm and try to develop an investment plan as soon as possible in order not to spend your funds irrationally.

    To avoid the negative influence of emotions, find out how to control them here.

    4. Keeping Investments On the Bare Minimum

    One of the alluring characteristics of binary options is that they are available to everyone, and not just traders with significant funds. Most brokers require a minimum deposit of $200, which is quite low compared to other types of financial services available on the market. One would think that those $200 will simply multiply as they progress as traders, but they would be wrong.

    Even if initial deposits are low, required minimum investments can be as high as $50. Now, if we compare that to the minimum deposit, it is easy to see that it enables a trader to place only four trades. Other than that, minimum investments bring minimum profit in all types of trading, and binary options are no exception to the rule.

    With small investments, it takes longer to accumulate significant funds on the account, which can make traders nervous and impatient, which leads to placing irrational trades in order to achieve more in less time. Besides, traders must always count on possible loss, and knowing that the minimum deposit now seems almost inadequate for serious trading and serious profit. Traders, no matter how experienced, should research various account types offered by various brokers and choose the one that suits their needs best.

    For all traders who are not sure about how to place trades, we recommend trading by using free Binary Options Robot, the best automated trading software available.

    5. Absence of Plan

    Even if binary options trading sounds simple, don’t be deceived as it is still the type of trading. Many users think there is nothing more to it than registering, making a deposit and placing trades, but a good plan takes responsible trader a long way. Planning is, along with education, one of the most important segments of binary options industry. Be sure to make a plan about how much, when and where to invest the money. Include some risk management strategies, and always count on possible losses. Traders must be ready to revise their plan if they see it is not working for them and losses are simply too high. Traders with more advanced accounts are sometimes assigned a personal advisor who can help them in making a better investment plan.

    6. Unrealistic Goals

    We must admit that there are some irresponsible brokers who use false advertising and promise unrealistic amounts in a short period of time. These brokers make traders believe that binary options trading is an easy way to make a lot of money. In reality, binary options are a profitable way of trading, but only if the trader is responsible, educated and patient. In order to avoid scam brokers, make sure to trade with a broker who is registered by some of the regulatory bodies like CySEC. Traders must be aware of their own greed and false promises, and realize that binary options are still a type of financial trading where no one becomes rich over night. Also, traders must take their invested amount into consideration, as bigger investments make a bigger profit.

    7. Overlooking the Changes

    It is easy to forget how dynamic binary options industry is, and for that reasons traders must be ready to reevaluate their trading plan, chosen strategy and placed trades in every moment. Changes should not be seen as something hostile, but as new opportunities that enable them to make more money if they are ready to adapt to the new environment. Proper education and detailed plan may reduce the risk of unexpected changes, but they are not a guarantee that those won’t happen. Also, the trader should not be scared to use additional features offered by the broker as rollover, double up, early closure and sell in order to adapt to the new circumstances on the market.

    8. Inadequate Money Strategies

    It is impossible to become a successful binary options trader without implementing the strategies, but traders often forget that strategies alone are not enough to succeed. A trader who has a good strategy knows what is going on in every moment of the trade, is aware of all the risks and knows what are the possibilities in case the trade takes an unexpected turn. Successful traders know how to manage all possible risks, and are aware of high-risk trades. They never place all their funds into high-risk trades, but only the smaller amount. That way they protect their funds from high losses, and always have a backup with more conservative trades, because losses, no matter how small, are still affecting their balance.

    Binary options trading can be a great experience if one is aware of the effort that has to be put up in order to make meaningful profits. This type of trading is user-friendly, but that does not mean that it should be taken easily and without prior research and education. Traders must be ready to adapt to the completely new trading environment and to take their time, as forcing trades is not the best strategy.

    Best Binary Options Brokers 2020:
    • Binarium
      Binarium

      Best Binary Options Broker 2020!
      Perfect For Beginners!
      Free Demo Account!
      Free Trading Education!
      Get Your Sign-Up Bonus Now!

    • Binomo
      Binomo

      Good Choice For Experienced Traders! 2nd place in the ranking!

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