Binary options trading gets a ton of flak online, and some even go as far as calling it a scam. But this hate only comes from people who tried making a quick buck and lost all their savings in the process. This hate is unjustified. Binary options trading is comparable to gambling only if you don’t conduct a thorough study of the financial markets before striking a deal and blindly making bets.
In most instances, people don’t do due diligence, which is why binary options get a bad reputation on the internet. Making money from binary options trading is very much possible if you study the basics from binaryoptions.com. People do make a lot of money trading binary options. But one should enter binary options with the correct mindset and set their expectations at a modest level. Expecting to turn your $600 into $6,000 is unrealistic and is setting themselves up for disappointment.
To embark on your journey to success trading binary options, it’s essential to get some insight into the minds of some of the most successful traders in the industry through their stories. In this guide, we will explore how binary options trading works, if success is possible, and some exciting success stories of other traders.
Is Success Possible?
Most people compare the odds of success of binary options to a coin flip, i.e., 50%. You can earn up to 90% profit on your investment, but you stand to lose 100% of your investment if you make the wrong prediction. This means that if you strike a deal for $500, you can make a profit of $450, but you stand to lose $500 if you’re wrong. But if you understand the markets well, the odds will no longer be fifty-fifty but, in turn, would come in your favor.
What you need to understand is that binary options won’t make you a millionaire in a short time. We won’t feed you a fake and made-up success story of a guy who made thousands overnight, quit his day job, and was able to live off of the income he was making from trading binary options his entire life. But we can tell you a success story of a person who was an average guy with an average job, making an average salary, who decided to get into binary options trading. We’ll call him Steve.
Instead of jumping into the market blindly, Steve spends months learning how the financial markets operate. He comes up with a viable trading strategy that he thinks will make him a profit regularly and tests it by backtesting it on past deals. He registers with a broker and starts demo-testing his newfound strategy. Steve notices he needs to make more than he thought, so he changes his approach once more. This time, however, Steve manages to make a good enough profit.
Satisfied with the result, he finally enters the market, but he doesn’t go all in with his capital. He invests small portions of his investment at a time. Once he’s built up his confidence in the market, he increases the amount of money he’s investing in a single deal. After five years, he achieves success where he can quit his day job and live off of his binary options trading success.
What Do We Learn From This?
This success story is different from what the advertisements show you. We learn a few key lessons from this story. The most important takeaways from this story are:
- To improve your odds of making winning predictions, you should spend some time understanding the market. An in-depth study of the intricacies of the market is essential before striking a deal.
- A good strategy is crucial if you want to lower your losses. You should come up with a viable strategy before entering the market. You can use any of the strategies we have discussed above depending on the situation or come up with one of your own.
- You should test your strategies on a demo account. You can make a demo account with any broker that you like and test out your strategies before applying them in real time.
- Invest consistently over a long period and not all at once. You need to fight against your instincts and invest your money reasonably. No matter how well your predictions have been going, one wrong step is all it will take to set you back to square one.
Binary options trading is viable only if you set the right expectations and put in efforts to first learn how the markets operate instead of just blindly betting on markets. No matter what anyone tells you, success in binary options is only possible through patience and a good strategy.