When you start to enter keywords such as cryptocurrency, trading or FX in Google or YouTube, it doesn’t take long to hit an article, an advertisement or a video that promises to make you rich with digital options. But can you make money with binary options? One might say that if it was so easy, everybody would do it.
This simple reasoning completely makes sense. Trading is a zero-sum game: for someone to win, someone else has to lose. But in the case of binary options, it can be even worse as most of the time you simply trade against the broker books. Which means that the more you lose, the more he wins. This conflict of interest leads to the emergence of many binary options scam brokers. When one is shut down, another one appears. And even if he is honest, if most of the traders win more than they lose they just go bankrupt. It must be at least a zero-sum games (the broker is paid through trading fees), with winners and losers. So those selling the “get rich quick” digital option scheme are clearly lying. This said, can you make money with binary options? What about binary options demo? If we follow the above reasoning, the answer is yes, although it’s not as easy as some people claim.
How can you make money with binary options?
There is no secret, not trick. How can you make money with binary options? By knowing what you are doing. How do you achieve that? Again, this is not rocket science:
- You have to get a proper trading education
- You must accumulate experience
- You must be able to control your emotions
Now let’s delve more specifically into those 3 issues:
1. Binary options trading education
It would be foolish to start trading binary options without having at least some basics, such as candlesticks theory, Bollinger bands theory, trading strategies, macroeconomy basics, Fibonacci retracements, etc. You see, binary options trading relies mostly on technical analysis. Yes, news will impact the prices (you will avoid placing a trade when big news is about to be released, such as US unemployment, or surf on the trend after the news is out). Acquiring those skills are crucial.
2. Trading experience
If you have some experience as FX trader or day trader, you should be equipped to start binary trading and accumulate XP. Once you have started your digital options courses, you WILL have to practice to gain experience. The theory is great and indispensable, but nothing replace on the ground experience. This, however, should not be a money burning process. You have 2 choices:
- Trade with a demo account (Spectre offers you an unlimited trial account that is really free, you don’t need to give your credit Number or anything)
- Trade small sums with a live account. Bets can start as low as one dollar, which means that even if you lose a lot of trades your educational process won’t cost you much
Once you start to have a track record of wins, you can start wagering substantial amounts, whether you want to trade for fun, as a semipro or to become a professional trader.
3. Can you make money with binary trading despite your emotions?
One factor that people who want to learn binary options overlook too often is the impact of their emotions on their trading behavior. This is particularly true when you trade on short expiry such as 5 minutes. When you lose, you might be compelled to try to recoup as quickly as possible what you lost. Your emotions take over and you start to place trades while your judgment is altered by things such as anger, impatience, etc. It is easy to be said, but it is extremely hard to manage. Every trader is one day or another victim of his or her emotions, irrespective of his or her experience. Trading success is not linear. You can have a very good day, a very good week or even a good month then a reversal. This turn of luck has to be psychologically managed.
If some techniques such as meditation might help, there is no magic trick to control emotions. It’s something every trader will have to fight constantly at a certain degree. Being aware of those emotions is the first step on the path of taming them.
Can you make money with binary options? Yes, otherwise there would not be people making a living out of digital options. But it’s not something you will achieve in a week, let’s be realistic. And even if you are good, you must be able to withdraw your profits. Many people have been victim of a fraud in digital options.
Making serious money might even not be your aim. Digital options are highly addictive. Even if they relate to markets, there are closer to betting games such as sports betting, casino games. The good news is that by knowing technical analysis, you can increase your chances of winning. If you play roulette, you can only rely on luck.