Things that you should know as an options trader

Binary options trading is very popular in today’s world. Many retail traders often consider binary options trading over traditional Forex trading. Being a new trader becoming successful in the options trading industry will be a little hard for you. But many new traders in the United Kingdom are making tons of money just by trading the options market. Traditional currency trading and binary options trading are pretty much similar only with exceptions. In binary options trading, you will have to deal with your trade timing which makes it much more difficult. But once you learn the true art of trading everything will be extremely easy for you. Most the traders don’t even know the basic stuff to trade options market. In today’s article, we will give you some amazing advice which will help you to become a profitable trader within a short period of time.

Importance of trading session

Choosing the right trading session is very crucial for your trading success. Many retail traders often trade the market without having proper knowledge the trading session. For instance, you will see many Asian traders trading the EUR/USD pair during the Asian trading session. But during that time you will not find  decent market volatility to make a profit. In order to trade the EUR/USD pair, you should choose the London or New York trading session to maximize your profit potential. However, as an options trader, you can trade with a narrow price level during the Asian trading session. But during the volatile trading session you have to predict bigger price movement or else you will be losing money. Things might seem little bit complex during the first stage but if you demo trade the market for few months everything will be crystal clear to you.

Simple rule of money management

Trading is not about making a profit. Rather it’s about how well you manage your losing trades. If you want to know how to trade binary options then you need to learn more about advance money management. Instead of risking 2 % of your account capital you need to bring some variations to your risk management factors. For instance, if the payout is extremely good then it's better to increase the risk to 3%. However, if you are completely new to this industry then it’s better to stick to the simple 2% rule. But over the period of time, you will have to learn complex lot size calculation since you will have to compound your profit to make a bigger trading account. No matter what happens, never take more than 5% risk in any single trade. Always focus on your investment and then think about making money.

High impact news data

Being an options trader you should never place any trade during a high impact news release. Chances are very high that you will lose a big amount of money. Most importantly you might experience large slippage during news trading as a currency trader. However, some retail traders often trade the news and make decent profit but they have extensive experience in the world of finance. They know very well how to manage their trade with high risk. But at times they even lose money but due to their high-risk-reward trade setup, they are able to stay on the positive side at the end of the month.

Be confident

Confidence is the key to success in the options market. If you are not sure what you are doing then you are not going to make any real progress. You might have four losing trades in a row but this doesn’t mean that you will have to quit trading or invest money in your trading account. Just stick to the simple 2% rule of money management and you will be completely fine. Always focus on the longer time frame data and trade with strict discipline. At times take a break from your trading to refresh your mind.

Views: 77


You need to be a member of Small Business Bonfire to add comments!

Join Small Business Bonfire

About the Small Business Bonfire

The Small Business Bonfire is a social, educational and collaborative community founded in 2011 for entrepreneurs that provides actionable tips and tools through a small business blog, a weekly newsletter and a free online community.

Subscribe to Our Newsletter


© 2019   Created by Alyssa Gregory.   Powered by

Badges  |  Report an Issue  |  Terms of Service