Avoid these 4 mistakes and trade binary options profitable!

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7 Binary Options

Although a considerable number of people today are interested in trading binary options, not all of them will succeed in this trade. As a matter of fact, only a few people manage to make profit continually while trading in binary options. The main reason why an increasing number of traders today are not profiting from this trade is that they have just invested with the wrong broker or are making one of the following mistakes. All the people who take part in trading binary options are here to make a profit out of their investments. This being the case, you should avoid the following mistakes in order to profit from this trade.

Poor Money Management

This is among the leading causes of failure among binary options traders today, regardless of the binary options platform they are using. A good number of traders today spend much of their trading time analyzing various assets, looking out for the new trade indicators and trying out various binary options trading strategies. As such, very few traders take their time to scrutinize their money management strategies while trading in binary options. In order to come up with a sound money management strategy, you need to make use of logic and apply a more balanced system that allows you to lower the risk associated with the positions you are opening. Failure to have such a strategy in place is more likely to lead to failure, rather than success in binary options trading.

Unrealistic Expectations

Another mistake that many traders in this market make is having unrealistic expectations, regarding the returns they can get on their investments in binary options. For instance, hopping to get 100 percent profit on your investments is highly unrealistic. Although the binary options industry offers a platform for traders to get good returns on their investments, traders should define their trading objectives and wok towards them. Expecting too much from the trade can turn out to be a huge setback for the trader in that it may lead to unguided investment.

Operating On a Small Investment

Although there are minimum investment amounts imposed by binary options brokers, this should not be a limit to the much you can invest in this trade. In most cases, underfunding your account can actually limit your chances of profiting from this trade. For you to execute a more balanced money management strategy, it is advisable that you fund your trading account with more funds than just the minimum deposit amount required by the broker.

Executing Too Many Trades

In the binary options industry, the more trades you carry out do not necessarily translate to more profit. On the contrary, carrying out too many trades within a short span of time may turn out to be harmful to your investment strategy. Overtrading in this market may come by as a result of two main things:

  • Success- in this case, the trader executes too many trades because of the ego of ‘beating the market’.
  • Failure – continued failure in the positions opened by the trader can encourage him or her to overtrade as the trader tries to reclaim the lost money.

In any case, overtrading in binary options is not a healthy practice. This is mainly because this type of behavior will most likely lead to failure rather than success while trading in binary options.

Gambling Rather Than Trading

Basically, trading in binary options is very similar to gambling. However, it is important that traders in binary options distinguish between binary options trading and gambling, if they are to profit from the trade. Unlike gambling, trading in binary options requires a more business approach. Additionally, it is important that traders make use of the various trading strategies while trading in binary options, rather than just guess the options and hope that it will turn out in your favor.

Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Top Broker!
    Best Choice For Beginners!
    Free Trading Education!
    Free Demo Account!
    Big Sign-up Bonus!

  • BINOMO
    BINOMO

    Perfect For Experienced Traders!

Basically, trading in binary options is a comparatively profitable way of making money online today. However, you need a more business oriented approach to the market, in addition to discipline and proper application of trading strategies in order to succeed. Avoiding the above mentioned mistakes will improve your chances of continually profiting from the trade.

Start trading now with Binary Option Robot

Start trading now with our recommended Brokers.

Best Binary Options Signals Review: Is it Scam?

Best Binary Options Signals Review: Is it Scam?

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Last Updated: Sep 1, 2020 @ 11:44 am

Well, when folks bump into this binary options service hosted on this domain, Best-binary-options-signals.com, the first question which they ask is whether it’s a legitimate signal provider or not.

We will answer that question in this review as we analyze the various aspects of this service. But first, it’s important to know that this signal provider is offering free signals and at the same time offering a premium plan which is to be paid for at the end of every 30 days.

Their free signal service is basically meant to lure in traders to subscribe to their paid signal service which the website says has more value than the free service.

So, is Best Binary Options Signals worth signing up for? Can you increase your efficiency in trading Binary options by simply following and implementing their signals.?

Best Binary Options Signals Review

Now that it is quite obvious that Best Binary Options Signals is a signal provider, we should go into details right away to let you know how it is like to use their signal service.

Let’s start with the free signal service. It’s meant for people who want to try out their service for free. But you generally have to wait longer in order for signals to show up. Besides, the website claims that free signals are not as accurate as paid ones.

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So, is there a possibility that the free signals are randomly generated while paid ones are carefully selected by expert market analysts? We are being tempted to think that Best Binary Options Signals is basically displaying random signals on their site, and it works in mysterious ways. Here’s how it often goes:

A traders comes to the website and tries to follow at least 5 signals. If the signals win most trades by chance, this trader will be prompted to sign up for the premium signals plan which costs £55 per month.

When they sign up for the premium signals service, they will be getting into a contract that is renewed on a monthly basis. If the trader forgets or fails to cancel their membership (in the event that they want to opt out), a month’s fee will be charged for that particular month anyway.

Generally, the free plan is a time waster because it keeps you waiting for a long time before new signals can show up. We believe that this can be a hectic way of trading Binary Options especially if you’re used to automated trading robots that save you from unnecessary screen time.

What is the average win rate and is it consistent?

The website is very open with their average win rate. They say that their win rate is 63.04%. In November 9th 2020 for instance, they said that they sent out 138 forecasts and that out of these, 81 signals made money while the rest, 51 lost money.

This win rate is not the best you can have in the industry right now. With cutting edge trading robots on sale today, there is no way you should find this service desirable because that win rate is just above the break even mark.

If it was consistent, it would take you a long time to make a significant amount of money. In addition to this, you cannot put what you cannot afford to lose at stake. If you did this, you’d be raising your risk profile for huge, quick profits. That would backfire on your account because we are talking of signals that hit the green, 63% of the time.

Generally, we would not advice readers to sign up with Best Binary Options Signals because of the low win rate.

How many signals can you receive per day?

Their free signals service is a little bit restrictive. There are only 5 trade-able assets to work with. But on the other hand, their paid service issues signals across a broad spectrum of assets. This can be up to 15 different trading assets.

This should not be a problem for you if you’re not into fast paced trading which often leads to over-trading and ultimately account blow.

But if you’re the kind of person who is always looking to jump into the next trade, you might find the free plan quite restrictive because one has to wait for a count down timer for a signal to come along. To remove this count down timer, Best Binary Options Signals is asking traders to upgrade to their premium plan which will then unlock over 100 plus signals per day.

What we think about Best Binary Options Signals website in general

When you go through this website, the first thing you will see are signals waiting to show up or signals that have already been traded.

In other words, this website also shows us history of their signals. However, there is no performance record to show how their past signals performed.

We are not sure if Best Binary Options Signals is trading these signals or just sending them to users after analyzing the market. We do believe that professional market analysts are traders themselves. This means that before they can even think of sending the signals, they should be thinking of entering a trade based on a specific entry point which have figured out on the chart.

One might think that we are asking too much when we say that Best Binary Options Signals does not have trade history.

We are not. If these people are real expert traders, they should keep a clean record of whatever they have been doing for the past one month or so.

Nevertheless, we can also see that this question is being camouflaged by the fact that they are offering free signals for your testing. That means you should test their free service on a demo account and if you’re pleased, you can upgrade. The question is, what is so difficult about providing daily trade records that can be verified? Isn’t this the ultimate test of transparency that every signal provider should embrace in order to convince traders that their signals work?

Before we forget, Best Binary Options Signals is also offering a trial plan for £15. This expires after 2 days and is non-refundable in case you fail to take advantage of the signals.

Best Binary Options Signals states in their fine print that if you subscribe on a weekend for the trial plan, this will not be counted, and yet money shall be deducted with no refund later on. We feel that this is a little bit unprofessional.

Best Binary Options Signals confesses that their signals are meant for illustrative purposes only

If you read the fine print at the footer of the site, you will see a notice saying that information on this site is meant for education purposes only. Again, this service needs you to have some knowledge on how to trade Binary options. If you have never traded before or are not proficient in analyzing charts, it is not for you.

In other words, Best Binary Options Signals is just looking to provide clues on how entry and exits which will cost you £55.

Our best advice for you

If you already know how to trade, we don’t see the need to sign up because you know where to enter and exit your trades when the right patterns form. If you don’t know how to trade, then we suggest that you pick a trading software/signal service here.

Five Mistakes to Avoid When Trading Options

(Especially since after reading this, you’ll have no excuse for
making them)

We’re all creatures of habit — but some habits are worth breaking. Option traders of every level tend to make the same mistakes over and over again. And the sad part is, most of these mistakes could have been easily avoided.

In addition to all the other pitfalls mentioned in this site, here are five more common mistakes you need to avoid. After all, trading options isn’t easy. So why make it harder than it needs to be?

MISTAKE 1: Not having a defined exit plan

You’ve probably heard this one a million times before. When trading options, just as when you’re trading stocks, it’s critical to control your emotions. That doesn’t necessarily mean you need to have ice flowing through your veins, or that you need to swallow your every fear in a superhuman way.

It’s much simpler than that: Always have a plan to work, and always work your plan. And no matter what your emotions are telling you to do, don’t deviate from it.

How you can trade smarter

Planning your exit isn’t just about minimizing loss on the downside if things go wrong. You should have an exit plan, period – even when a trade is going your way. You need to choose your upside exit point and downside exit point in advance.

But it’s important to keep in mind, with options you need more than upside and downside price targets. You also need to plan the time frame for each exit.

Remember: Options are a decaying asset. And that rate of decay accelerates as your expiration date approaches. So if you’re long a call or put and the move you predicted doesn’t happen within the time period expected, get out and move on to the next trade.

Time decay doesn’t always have to hurt you, of course. When you sell options without owning them, you’re putting time decay to work for you. In other words, you’re successful if time decay erodes the option’s price, and you get to keep the premium received for the sale. But keep in mind this premium is your maximum profit if you’re short a call or put. The flipside is that you are exposed to potentially substantial risk if the trade goes awry.

The bottom line is: You must have a plan to get out of any trade no matter what kind of strategy you’re running, or whether it’s a winner or a loser. Don’t wait around on profitable trades because you’re greedy, or stay way too long in losers because you’re hoping the trade will move back in your favor.

What if you get out too early and leave some upside on the table?

This is the classic trader’s worry, and it’s often used as a rationale for not sticking with an original plan. Here’s the best counterargument we can think of: What if you profit more consistently, reduce your incidence of losses, and sleep better at night?

Trading with a plan helps you establish more successful patterns of trading and keeps your worries more in check. Sure, trading can be exciting, but it’s not about one-hit wonders. And it shouldn’t be about getting ulcers from worry, either. So make your plan in advance, and then stick to it like super glue.

MISTAKE 2: Trying to make up for past losses by “doubling up”

Traders always have their ironclad rules: “I’d never buy really out-of-the-money options,” or “I’d never sell in-the-money options.” But it’s funny how these absolutes seem obvious — until you find yourself in a trade that’s moved against you.

We’ve all been there. Facing a scenario where a trade does precisely the opposite of what you expect, you’re often tempted to break all kinds of personal rules and simply keep on trading the same option you started with. In such cases, traders are often thinking, “Wouldn’t it be nice if the entire market was wrong, not me?”

As a stock trader, you’ve probably heard a justification for “doubling up to catch up”: if you liked the stock at 80 when you first bought it, you’ve got to love it at 50. So it can be tempting to buy more shares and lower the net cost basis on the trade. Be wary, though: What can sometimes make sense for stocks oftentimes does not fly in the options world.

How you can trade smarter

“Doubling up” on an options strategy almost never works. Options are derivatives, which means their prices don’t move the same way or even have the same properties as the underlying stock.

Although doubling up can lower your per-contract cost basis for the entire position, it usually just compounds your risk. So when a trade goes south and you’re contemplating the previously unthinkable, just step back and ask yourself: “If I didn’t already have a position in place, is this a trade I would make?” If the answer is no, then don’t do it.

Close the trade, cut your losses, and find a different opportunity that makes sense now. Options offer great possibilities for leverage using relatively low capital, but they can blow up quickly if you keep digging yourself deeper. It’s a much wiser move to accept a loss now instead of setting yourself up for a bigger catastrophe later.

MISTAKE 3: Trading illiquid options

When you get a quote for any option in the marketplace, you’ll notice a difference between the bid price (how much someone is willing to pay for an option) and the ask price (how much someone is willing to sell an option for).

Oftentimes, the bid price and the ask price do not reflect what the option is really worth. The “real” value of the option will actually be somewhere near the middle of the bid and ask. And just how far the bid and ask prices deviate from the real value of the option depends on the option’s liquidity.

“Liquidity” in the market means there are active buyers and sellers at all times, with heavy competition to fill transactions. This activity drives the bid and ask prices of stocks and options closer together.

The market for stocks is generally more liquid than their related options markets. That’s because stock traders are all trading just one stock, whereas people trading options on a given stock have a plethora of contracts to choose from, with different strike prices and different expiration dates.

At-the-money and near-the-money options with near-term expiration are usually the most liquid. So the spread between the bid and ask prices should be narrower than other options traded on the same stock. As your strike price gets further away from the at-the-money strike and / or the expiration date gets further into the future, options will usually be less and less liquid. Consequently, the spread between the bid and ask prices will usually be wider.

Illiquidity in the options market becomes an even more serious issue when you’re dealing with illiquid stocks. After all, if the stock is inactive, the options will probably be even more inactive, and the bid-ask spread will be even wider.

Imagine you’re about to trade an illiquid option that has a bid price of $2.00 and an ask price of $2.25. That 25-cent difference might not seem like a lot of money to you. In fact, you might not even bend over to pick up a quarter if you saw one in the street. But for a $2.00 option position, 25 cents is a full 12.5% of the price!

Imagine sacrificing 12.5% of any other investment right off the bat. Not too appealing, is it?

How you can trade smarter

First of all, it makes sense to trade options on stocks with high liquidity in the market. A stock that trades fewer than 1,000,000 shares a day is usually considered illiquid. So options traded on that stock will most likely be illiquid too.

When you’re trading, you might want to start by looking at options with open interest of at least 50 times the number of contacts you want to trade. For example, if you’re trading 10 contracts, your minimum acceptable liquidity should be 10 x 50, or an open interest of at least 500 contracts.

Obviously, the greater the volume on an option contract, the closer the bid-ask spread is likely to be. Remember to do the math and make sure the width of the spread isn’t eating up too much of your initial investment. Because while the numbers may seem insignificant at first, in the long run they can really add up.

Instead of trading illiquid options on companies like Joe’s Tree Cutting Service, you might as well trade the stock instead. There are plenty of liquid stocks out there with opportunities to trade options on them.

MISTAKE 4: Waiting too long to buy back short strategies

We can boil this mistake down to one piece of advice: Always be ready and willing to buy back short strategies early. When a trade is going your way, it can be easy to rest on your laurels and assume it will continue to do so. But remember, this will not always be the case. A trade that’s working in your favor can just as easily turn south.

There are a million excuses traders give themselves for waiting too long to buy back options they’ve sold: “I’m betting the contract will expire worthless.” “I don’t want to pay the commission to get out of the position.” “I’m hoping to eke just a little more profit out of the trade”… the list goes on and on.

How you can trade smarter

If your short option gets way out-of-the-money and you can buy it back to take the risk off the table profitably, then do it. Don’t be cheap.

Here’s a good rule-of-thumb: if you can keep 80% or more of your initial gain from the sale of an option, consider buying it back immediately. Otherwise, one of these days a short option will come back and bite you when you’ve waited too long to close your position.

For example, if you sold a short strategy for $1.00 and you can buy it back for 20 cents a week before expiration, you should jump on the opportunity. Very rarely will it be worth an extra week of risk just to hang onto a measly 20 cents.

This is also the case with higher-dollar trades, but the rule can be harder to stick to. If you sold a strategy for $5.00 and it would cost $1.00 to close, it can be even more tempting to stay in your position. But think about the risk / reward. Option trades can go south in a hurry. So by spending the 20% to close out trades and manage your risk, you can save yourself many painful slaps to the forehead.

MISTAKE 5: Legging into spread trades

“Legging in” is when you enter the different legs of a multi-leg trade one at a time. If you’re trading a long call spread, for example, you might be tempted to buy the long call first and then try to time the sale of the short call with an uptick in the stock price to squeeze another nickel or two out of the second leg.

However, oftentimes the market will downtick instead, and you won’t be able to pull off your spread at all. Now you’re stuck with a long call with no way to hedge your risk.

How you can trade smarter

Every trader has legged into spreads before — but don’t learn your lesson the hard way. Always enter a spread as a single trade. It’s just foolish to take on extra market risk needlessly.

When you use Ally Invest’s spread trading screen, you can be sure all legs of your trade are sent to market simultaneously, and we won’t execute your spread unless we can achieve the net debit or credit you’re looking for. It’s simply a smarter way to execute your strategy and avoid any extra risk.

(Just keep in mind that multi-leg strategies are subject to additional risks and multiple commissions and may be subject to particular tax consequences. Please consult with your tax advisor prior to engaging in these strategies.)

Best Binary Options Brokers 2020:
  • BINARIUM
    BINARIUM

    Top Broker!
    Best Choice For Beginners!
    Free Trading Education!
    Free Demo Account!
    Big Sign-up Bonus!

  • BINOMO
    BINOMO

    Perfect For Experienced Traders!

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