How to Avoid Rookie Mistakes ¦ Binary Strategies in South Africa

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How to Avoid Making Rookie Mistakes in Binary Options Trading?

Binary options trading caused major changes in financial markets ever since it appeared in 2008.

It draw the attention of people all around the world who suddenly had a way to freely participate in trading which had been, up until then, more reserved for financial experts rather than ordinary folk.

And, when first starting out in any sort of business venture it is good to know about common mistakes usually made by beginners.

In this case, knowing how to avoid making rookie mistakes in binary options trading can only lead to more profitable trades, which is the ultimate goal.

Bearing that in mind, this article is intended for all those South African traders which are at the start of their binary options trading journey but who have the foresight when it comes to preparing themselves properly.

Learning how to avoid making rookie mistakes is one of crucial steps.

Going in binary options trading blindly and hoping for the best will not accomplish much, therefore developing a strategy is a necessity which will help in selecting the right expiration dates which will be used in binary options trading later on.

Lack of focus is a common rookie mistake, which sees traders studying 4-hour charts and then going off and trading in expiration dates which are short, or trading in longer expiration dates while consulting a 1-minute chart.

Hence, the first thing to do is to line up the time period used for market analysis along with the expiration date.

By analogy, if South African traders are looking to trade on 4-hour charts then longer expiration dates are needed, e.g. End of Week or End of Month.

Trading patterns are another focal point interested South African traders need to take into account as those can be quite useful. Flat trading pattern or a zigzag one can be a great source of valuable information to traders when they are choosing an expiration date.

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Choosing the Right Expiration Date

At the beginning, trading binary options might seem like a tricky business as South African traders will face having to select expiration dates on their own.

Naturally, there are times when traders feel angry or unhappy with the choices they have made.

E.g. the price was “in the money” basically during the whole time in the trading process only to change direction unexpectedly which ends in lost profits.

Fact of the matter is – the expiration date wasn’t chosen properly, a common enough rookie mistake and it’s one which may not be completely avoidable in binary options trading, especially when the market had been steadily moving in the predicted direction only to change at the very end.

Rookie Money Management Tips

However, there is a remedy which South African binary traders can use – money management techniques. Those include coming up with a trading plan which will hold.

Traders might opt to section investment funds they plan to use into several identical parts and then, further divide it into even smaller amounts.

Great thing about binary options trading is that traders can prevent a complete loss of funds since a percentage is offered.

Additionally, switching regularly from shorter to longer expiration dates allows them to place trades hourly but also use much longer expiry dates such as End of Day or longer, depending on the broker they selected for trading.

Using Timeframe to Choose Expiry Time for an Option

Another fairly usual rookie mistake many binary options traders make is to deviate from the plan without a solid reason. If a plan has been formed and traders invested their time into forming it then not following through makes little sense.

Changing expiration dates which traders already decided upon should only happen if a decision is being made on the latest analysis of time frames.

Let us imagine this situation:

Trading technique used by a trader is founded on RSI (Relative Strength Index) of overselling or overbuying levels which are joined with price deviation.

If traders are using this setup on the 1-hour chart frame then trading expiration date which are shorter than End of Day makes little sense.

Also, just because a trader has selected End of Day expiration date does not mean he/she has to wait the entire day in order for their option to close “in the money”.

Especially, if the option was taken in the second part of the day which means the expiration date will only take several hours. The same principle can be used for options which are being traded in second part of the month or second part of the week.

Devising and then following money management and technical analysis can be a great way to avoid another one of rookie mistakes – over-trading and trading short term expiry dates since those appear as a shortcut toward the desired goal.

Short-term Expiry Rates – Yes or No?

Change in the market direction happens and that is the undeniable reality of any financial trading business, regardless of the expiry times used.

However, there are those traders no like neither short nor long expiry times but to find just the right middle ground South Africans interested in binary options trading will need knowledge of market analysis and self-discipline.

Besides, avoiding rookie mistakes in binary options also includes using fundamental analysis too, not just the technical one.

Regardless, the best way to continue is to develop a careful approach and try to have a full overview since both long-term and medium expiration dates are standard.

How to Avoid Rookie Mistakes?

In order to perform binary trading process in a profitable way, traders in South Africa should choose a strategy which suits them the most. Expiry times differs from strategy to strategy and traders are able to select if they want to trade binary options on short or long run.

In this strategy guide, we will provide you with more detailed information regarding how to avoid rookie mistakes, if you are an interested trader in binary options.

Choose Preferred Expiry Date

As mentioned above in our introduction paragraph, expiry times can range from short term ones, such as 60 seconds up to longer period of times, even 150 days.

So for example, if South African traders want to trade for longer period, it makes no point to place trade with expiration time of 60 seconds. Same is applied for traders who want to trade on short term trades but they look on longer period of time.

Therefore, traders should be aware how they need to adapt their time of expiry to the time frame which will be used for market analysis of financial market. Since binary options trading is based on accurate determination of when to buy or sell an option, strategy is something needed and valuable for all interested traders who want to profit from binary trading.

Have a Money Management Plan for Rookie Traders

To avoid beginners’ mistakes and start trading with a positive note, it is advised for traders to apply money management trading techniques when placing a trade. In case traders made their trading plan over weekend, they often question what should be their next step.

The first step is to divide a specific amount of money and allocate it according to different trade options, depending how many of them are planned. Diversification is always a good thing in binary options trading and is used to minimize risks when trading on numerous underlying assets. Then, South Africans are able to choose a preferred expiry time. This can be end few minutes, end of day, week or more.

The whole idea behind this strategy article on how to avoid rookie mistakes is to have a trading plan, which will assist new traders to have a better understanding of how to trade binary options. Connection between expiry times should rely on time frames when an analysis is made.

To make it more understandable, for example, trading with expiry of end of day does not mean that traders need to wait entire day for an option to expiry in the money as an option will take place in the second part of a day. South African traders are advised to use technical analysis and have a money management plan in order to avoid overtrading, as the most common rookie mistake.

Trading on Short-Term Expiration Times

Some traders prefer trading with short-term expiration times rather than longer term. These types of traders are mostly those who prefer riskier trades. Probably the biggest advantage is to balance between short-term and long-term trad options and find a right place.

Trading discipline can be challenging, especially for inexperienced South African traders who are about to start their binary trading journey. The most popular short-term expiry time is 60 seconds, which is present with most binary options brokers, such as leading broker Banc de Binary.

Binary Options Strategies

BinaryTrading.co.za South Africa strives to become one of the best sources for traders in South Africa regarding trading strategies.

For traders to become more experienced and well-trained having on disposal a selection of different strategies is very important and efficient.

In this Strategy section, South African traders can learn more about strategies for beginners and also professional traders.

There are basic strategies, which are mostly used by inexperienced traders who recently joined binary options industry. On the other hand, traders can also read articles about intermediate and advanced strategies, which are used by pro traders to increase profits.

Binary Options Strategy Types and Rules

5 Minutes Trading Strategy

Binary Auto Signals Strategy

How to Avoid Rookie Mistakes?

What is a Trend?

How to Avoid Over-Trading in Binary Options?

Why it is Important to Have a Binary Options Strategy?

Having a trading plan is important segment of binary trading process since it can lead traders in South Africa to a profit gain if they have a clear vision of what to do next and how to trade binary options.

While some traders rely only on luck, it is far more wiser to have a strategy plan in order to know in which assets to invest in and what expiry time to choose.

Under Binary Strategies, we will provide our readers with different strategies, from those intended for beginners to those strategies, which will satisfy pro traders.

Such articles can be very useful to interested South African traders who want to benefit from binary options and are determined to achieve success by getting the most from binary strategies.

By choosing the right strategy, traders can experience great success when trading binary options.

This depends mostly about what type of a trader are you, do you prefer riskier trading or less riskier etc. All these elements are significant and therefore, we recommend our South African readers to check our Strategies tab in order to ge the latest info and useful articles to maximize profit.

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

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