Although those of us who are binary options traders tend to think we’re having a lot more fun than everyone else, that doesn’t mean there aren’t things we can’t take from other types of investments. Traditional traders – those who buy and sell shares in companies – are a great example of investors who could teach us a lot. The following are five great lessons for binary options traders that come from traditional trading.
You Need to Consider the Long Term
One reason we recommend that binary options traders start with traditional trading first is because it’s a slower game. Things can get very hectic with trading binary options in the blink of an eye. This makes it really easy for binary options traders of every level to commit a very taxing mistake: thinking short term. They only see the next opportunity to profit because, generally, the option only lasts an hour or maybe even less.
Here’s the thing, though: you need a long-term approach to make it in trading binary options. This means focusing on a certain underlying asset and even finding a niche within it so you can make trade after trade after trade because you understand where it’s going in the next 30 days, not the next 30 seconds.
You Must Be Patient
Along the same lines, it’s important you practice patience when trading binary options. Again, it’s very easy not to because you’re constantly looking at opportunities. This is a great way to deplete your budget in a matter of seconds, though.
Instead, adopt or design a sound strategy and then be patient and wait for the right opportunities. This is how you get your win rate well above 60% and start making serious money.
The Market Can Be Fickle
Trading binary options means we’re lucky enough to have the opportunity to make money no matter which way the market is moving – even if it’s almost not moving at all. This can make binary options traders complacent, though, because they begin to feel that the market is almost a non-factor in their profits.
Never adopt this attitude. Investors who trade shares know that the market is a complicated animal that can turn at any moment. Just because you specialize in one area doesn’t mean you can risk turning a blind eye to what the rest of the market is doing.
Timing the Market Is Nearly Impossible
This is also why accomplished stock investors don’t rely too heavily on trying to time the market. Sure, it’s important to pay attention, but those who wait for the exact right opportunity to pull the trigger usually end up missing out on opportunities again and again.
The best you can hope for is to be close every single time. This will mean you have plenty of moments where you wish you had held off another minute or moved earlier, but overall, you’ll make far more money this way than constantly waiting for things to be just right.
There Is No Such Thing as a Sure Thing
People who invest in stocks have long known that there is absolutely no perfect system or method for making consistent profits without any losses. Yet, in our industry, you still see advertisements for this kind of thing constantly. Potential customers are promised 100% win rates or hundreds of dollars in free money.
Traditional traders know that these kinds of things don’t actually exist. They’re either scams or there is plenty of red tape. We as binary options traders need to adopt this same realistic attitude.
There you have it. Embrace these five lessons for binary options traders from the other side and you’ll soon be enjoying better profits on this side of the fence.