In order to be successful trading binary options, you need to be able to do more than just choose the correct trades more than half the time. In addition to predicting trades accurately, in order to make money trading options you must also closely watch your returns and success rate and make sure that you maximize every single trade you make. Once you can do that, you can really start making money with binary options.
Let’s say that a trader has learned the ropes of trading, and has a pretty decent 60% success rate with their binary options trades. If the return on each successful trade is 75%, then for every 10 $100 trades, the trader will net a cool $50 profit. Considering that you can make dozens of trades every single day, that money can quickly add. At that rate, for every 1,000 trades made, the trader earns $5,000.
But what if the trader was able to get 15% back on his incorrect trades, as well? In that case, instead of making just the $50 on his successful trades, he would also get a return of $60 on the losing trades. Suddenly his profit is $110 for every 10 trades, and $11,000 for every 1,000 trades! Taking advantage of broker rebates is one of the best ways to end up making money with binary options.
However, traders need to constantly be evaluating their profit returns, their broker rebates, and their success rates because not every situation is right for every trader. Let’s take an experienced trader who successfully predicts a trade 80% of the time. With the above conditions, 75% return and 15% rebate, you would think that the trader would be extremely profitable making money trading options. Bit with a success rate that high, the rebate is less important.
A trader who is right 80% of the time and who receives 75% profit and a 15% rebate on lost trades will earn a net profit of $630 for every 10 trades. But if that trades uses a broker that does not offer a rebate on losing trades, but offers an 80% profit on wins, that trader will end up making $640 for each 10 trades. If the trader makes 10 trades a day, that equals an extra $200 a month. And these are some of the lowest trades, when you make $300 trades instead of $100, then the profit starts to skyrocket!
The best way to make money with binary options is to constantly analyse your success rate and the rate of return you are getting to make sure that you make the most out of your trading. While the temptation might be to take the biggest percentage returns you can find, you might find that affects your success rate. Finding the right balance will ensure that you continue making money trading options each and every month.