When embarking on the path towards becoming a binary options trader, you need to fully understand the world of binary options and know what it really means to be a trader. If you believe every binary options internet advertisement or every claim made by online options brokers, you would think that all binary option traders become millionaires after a couple of months of trading. And while it is possible to be extremely successful trading binary options, you need to understand that being a binary options trader is hard work, and involves a significant amount of risk.
At first, it may seem that becoming a successful binary options trader is incredibly easy because there are only two options, win or lose. Many new traders have the misconception that if they make a wrong prediction they lose their money, and if they make a correct prediction they double their money. This makes it look to newbies that all they have to do is make a minimum of effort and be right more than half the time in order to make lots of money as a binary options trader.
However, when it comes to binary options, things are not equal and a losing trade does not cancel out a winning out. When you make a correct trade you will not get double your money, but a percentage of it, ranging from around 70-85%. Likewise, your binary options trading service or broker may offer a rebate on losing trades, so you can get back 10-15% of your money, even if the trade is unsuccessful. Luckily, these percentages are not secrets, you know exactly why you can earn, and exactly how much you can lose before you make the trade.
Once you understand exactly how much money you can make from trades, and that it might not be as much as you initially thought, you also have to understand that there is the very real possibility of losing money. Like any other investment product, binary options are risky, and you can lose money trading them. The best binary options traders know this, but instead of allowing the fear of loss to control their decisions, they are able to calculate that risk into their trading strategies and know that short-term losses are not a problem if they are showing long-term gains.
Most people will not be able to make a career out of trading binary options right away; they might only lead to a little extra income the first few months or years. However, there is no reason why a beginning trader can’t make a profit from the very first day, and be the very best binary option trader he or she can be. There are amazing treasure troves of strategies, analyses, charts, and courses available on the internet, often for free, that can give the new binary options trader valuable insights into these options, and how to make enough successful trades to turn a profit.
Only when new binary options traders have inflated expectations, false assessments of risk, or incomplete knowledge of the products they are trading do they lose money. Having the right mindset from the beginning is the best way to become a profitable binary options trader and start making money from the very first day.