Top 10 mistakes when trading Binary Options Infographic
Trading binary options can be risky for your capital so here are the most common mistakes traders can do, so try to avoid them:
- Excessive investments – You only get high returns if you bet high and the risk of losing always exists. So please always use the Trading Chart of the simple method for the amount of the investments.
- Do not trade with non-EU-regulated brokers – Brokers that are not EU-regulated can do whatever they want with your money. You wouldn’t trust someone with your money who only has a paper sign on the door that says ‘bank’ either.
- Use the bonuses with attention – some brokers offer very cheeky terms on their bonuses so please be warned to read the small lines.
- Wild asset-hopping – Stocks or currency pairs are assets, for example. Concentrate on a few options types and don’t jump back and forth to whatever seems the most lucrative or secure to you.
- Watch yourself – Is your mood dependent on the outcome of your trades? Do you keep investing even though you always lose? Careful! With most certainty you’re developing a gambling addiction!
- Compensate for losses – This is typical gambler thinking: I have lost big time so I have to continue gambling to compensate for these losses. If you have had to take big losses, then you didn’t trade right but gambled – so stop it!
- Emotions – your worst enemy – If you trade emotionally, then you’re going to lose everything – stop it if you can’t turn off your emotions when trading! You have to be as cold as possible, 100% reasoning decisions and 0% gut decisions. It’s very important because especially losses can evoke strong emotions and fears. Fear has always been the worst teacher. You either stay cold with a loss and continue trading with a goal and calculate losses beforehand or you don’t trade at all.
- One more trade… – If a trade is running out, so let it be. Go away from it and don’t think ‘Oh it’s going up now, I’m going to put a Call-Trade’. Most of the times, that goes horribly wrong and doubles the loss. Put your bet specifically and do something else until it runs out.
- No Silence when trading – Do not trade if there is fuss around you. You need full focus to trade well.
- ‘Self-developed strategies’ – You quickly get the impression in trading that you have developed a ‘winning strategy’. Usually that is NOT the case. The psychology of trading plays a big role here. If you feel as a winner while trading, you will win a lot more often (experience).