Binary Options trading is fast becoming a global means of investing in the financial markets. Its simplicity and low entry requirements make it a favorite among small-scale retail traders and investors.
Granted that, it doesn’t warrant any novice trader getting involved in live trades without knowing their way around the industry. Aside from falling in the hands of dubious brokerages, not knowing how to trade binary options will lead to losses that, in most cases, are avoidable. Checking out websites such as https://www.binaryoptions.com/broker/olymp-trade/legal-in-india-olymp-trade/ will provide helpful information about binary trading.
Every binary options trader who hopes to build a profitable trading career should ensure all the boxes for a successful trading career are checked. While that’s not easy, it’s worth the stress when you get it right.
Binary Options Checklist for Beginner Traders
Here are some checklists beginner traders should consider:
- Identify a Trusted Brokerage in your Country
First, you have to make sure you’re dealing with a licensed binary options broker operating in your country. If you haven’t figured out by now, jurisdictions tie the operations of brokerages; a brokerage legally offering services to a particular country may not be permitted to operate in another country.
For example, Olymp Trade may be operating in India; simultaneously, it may be illegal for them to work with South African traders.
You should further confirm if your choice brokerage is legally authorized to operate in your country. While others are at it, Binary Options Traders in India can check out an in-depth review of Olymp Trade. A positive review implies that the brokerage may be genuine.
- Evaluate Your Finances and Commit to what you can Afford to Lose
Binary options trading involves a high-risk investment; here’s not where you want to bit more than you can chew. Since your capital is at risk when trading, you need to make a solid financial plan before getting involved.
Ideally, it would help if you created a money management plan for trading even after depositing something that doesn’t put a hole in your pocket. Although trading is very different from gambling, you may need to look at your funds and think of having some plan similar to a gambling bankroll.
- Develop a Trading Strategy
Next, you want to get a trading strategy that you will use to navigate your way in the market. While there are many binary options trading strategies to choose from, it’s always advised to have a hand full in your repertoire and implement a few for any trade setup.
Some professionals even recommend knowing only a few (at most five) because trading may become daunting if you try combining multiple strategies at a given time.
- Test Your Strategy and Make Sure it’s Profitable
So you’re able to learn a strategy that seems quite simple to implement, now it’s time to go a step further. Away from the learning resource, the strategy is to work with a demo account to check if it’s something that you can replicate without assistance.
While that’s the case, it’s also important to emphasize that being able to make two or three executions doesn’t mean you have a profitable strategy. Having extensive back-testing and forward-testing sessions is key to determining the true profitability of a strategy. Most professional traders will recommend back-tests and forward-tests that span at least 100 or across two quarters.
- Setup a Winning Mindset
Veteran and professional traders often claim that trading deals more with psychology than the analysis strategy you implement in trade executions. You need to clear up your mind and develop a winning mentality before going live.
Accept that losses may come, and you shouldn’t be afraid of them; you’ve got a well-tested strategy after all. While results from extensive back-tests will boost your confidence as you advance in your trading journey, it remains your duty to maintain a sound mind while in the markets.
- Setup your Trade Station
While many traders think getting a trade station is inessential, it is a requirement for anybody who aspires to be a pro in the industry. All professional traders have a setup or trade station where they feel comfortable handling their trading activities.
Although you don’t need to start with anything sophisticated or expensive, you do at least somewhere that’s comfortable that you can treat as a workspace. Yes, you can trade on mobile but having a comfortable position in the house to do your business helps improve your concentration.
- Follow Like-minded Individuals and Grow With Them
The road to a successful trading career is lonely; it’s a journey every individual trader will take alone; you’re directly responsible for your success and failures. However, being on a lonely journey doesn’t mean it should be hard.
You can make it much easier when you build connections with others thriving in the industry. Linking up with individuals in your field is a great way to develop a high-performance mentality.
The financial markets are consistently changing; many investment opportunities are now accessible to the retail community. However, it doesn’t translate to profitability for everyone. As we’ve seen with financial institutions in the past, some people will have to pay the price and hold an empty bang.
You have the edge over other industry participants to escape the inevitable liquidations. You can do this by ticking the right boxes to make sure you’re prepared for anything. We’ve highlighted things you need to start a successful Binary Options Trading journey; it’s left for you to put them to good practice.