South African traders who are considering binary options trading or are trading already need to keep several important aspects in mind.
One, naturally, is what to do and how to boost their chances of making a profit.
On the other hand, sometimes it is equally as important to know what not to do.
In this guide, we will shift our focus on which key mistakes to avoid as a trader in binary options trading.
Why Trade Binary Options?
But, why trade binary options in the first place?
Naturally, South Africans looking into binary options trading are doing so because of the numerous benefits this way of trading presents.
High and quick profits, numerous underlying assets, trade options and trading features and tools.
Of course, there is also a large number of binary brokers, more than 500 according to the latest info, which provides traders in South Africa with plenty of choices.
The fact that this is an online trading venture and that binary trading can be done via mobile phone makes this even handier and attractive.
Yet, mistakes happen and sometimes those cannot be avoided. Even expert traders make mistakes and experience loss.
However, some key mistakes can be avoided and by following this simple list of advice, South African traders could experience profitable binary options trading.
Selecting Wrong Binary Broker
This is one of the first key mistakes to avoid as a trader in binary options.
The remedy is simple – doing proper research. There is no need to rush into trading binaries and picking up the first broker without sufficient research.
Just like any other sphere, there are scam brokers in binary options. South African traders who dedicate enough time to do proper research and read broker review provided on sites like Binarytrading.co.za can minimise the risk of ending up with a scam broker significantly.
There are plenty of established and popular binary brokers which have been present on the South African market for a long time like IQ Option, 24option or AnyOption.
We also advise selecting regulated binary brokers rather than those who have not obtained a regulation.
Ignoring Educational Materials
The first key mistake in binaries we highlighted is closely linked to the second – ignoring educational materials and learning in general.
Yes, binary options trading is much easier than Forex or some other forms of trading but it does not mean that South African traders can or should simply start trading.
Successful binary options trading is a skill more than anything else. To learn and perfect that skill, South Africans have to invest more than just their minimum deposit and hope for the best.
There is so much useful data available online and on broker platforms. In fact, most brokers dedicate entire tabs on their trading platforms to it.
The aforementioned 24option and IQ Option have fantastic educational sections but so do brokers like Daweda Exchange and BDSwiss. Ignoring to utilise them can result in poor trading performance and loss of funds.
Knowledge is the basis for good decisions.
When traders make an effort to learn as much as they can about underlying assets, trading strategies and trade options predicting the price movement and securing profitable trades becomes much easier.
On the other hand, this manner of trading binaries might not be ideal for all traders.
If South Africans simply have no time or inclination to learn but still wish to make the most of the binary options other means are available.
With the advanced technology, the trading software was created and increasing number of binary traders is turning to trading solutions like Binary Options Robot or Trader’s Buddy.
Lofty Trading Expectations
We are all guilty of fantasising about winning the lotto or making thousands on a single trade.
And while this may happen to some, most need a different approach to secure the profits they want.
Which brings us to another key mistake binary traders often commit – lofty trading expectations which are not so easily achievable in reality.
While this may not seem like a huge mistake to make in binary options the consequences of such unreasonable expectations might be very harmful.
High expectations which are not backed up by knowledge, proper information and skill can lead to bad trading decisions like over-trading or emotional trading.
Gambling Approach to Binaries
Another common mistake, especially among newbie binary traders, is to approach binary trading like gambling.
Luck and chance feature heavily in gambling, while binary options trading demands learning, planning, preparation and execution.
Those South Africans who pit the sign of = between gambling and trading are making a mistake which could cost them dearly. Financial investments and trading demand careful planning and execution not blindly charging in and hoping for the best.
Trading Binaries Without Money Management Plan
Finally, another common key mistake to avoid as a trader in binary options is trading without a plan.
Many traders in South Africa and around the world as well approach binary options trading without proper money management plan. Often, without any plan at all.
This often results in monetary loss and disappointment.
Binary options trading, as evidenced by everything we said in this guide, needs a measure of dedication and constant financial market monitoring. It also needs certain knowledge which traders can slowly gather over time.
All that will enable them to come up with a trading plan. The plan needs to include which underlying assets trader wishes to trade, trade options and expiry times. Also, how many trades per day should be executed and what is the budget available for trading.
South Africans should never invest more than they can stand to lose and, according to experts, it is not wise to invest more than 10% on a single trade.
It is also wise to diversify trades and always keep records of profits made and lost. This will enable binary traders to learn and adjust their plan.
Having and sticking to a trading plan has another benefit – traders can avoid impulsive trading.
In applying these simple pieces of advice, South Africans can avoid some of the key mistakes and have a more profitable binary options trading experience.