Just the other week I posted an article on 7 features that all binary sites should include, one of which is useful training resources. Most binary options websites provide a glossary, FAQ, and some basic how-to resources. Many go beyond that and provide trading articles and video tutorials. Some even provide one-on-one training with qualified experts and ongoing training in the form of advanced webinars—but they usually make you pay extra for that in the form of a larger initial deposit.
I stated that all binary options brokers should ideally offer these resources, but how important are they really? The other day, I was checking out a new binary options broker, and I noticed that they had placed their training resources in a section titled “For Beginners.” The resources were pretty sparse, just a glossary, a basic how-to page, and a brief educational video. They certainly were beginner resources, but the different tone provided by this site made me rethink the matter of broker training resources.
Resources Provide Trust
The biggest argument I can provide for the importance of training materials actually comes down to trust. When binary options brokers give traders learning materials, they are encouraging them to actually learn how to trade before they start investing their money, and that is a big deal. It demonstrates good faith, a desire to build lasting relationships with long-term clients. But the reality is, even the most comprehensive resources I have ever seen on a binary options website just scratch the surface.
… But How Much Trust?
While I approve of binary options brokers providing resources to traders, I do not approve of the way those resources are often presented. Brokers who provide educational materials so often present them as if they can teach traders everything they need to know about investing in binary options. They refer to their education section as a “Trading Academy” or something similarly prestigious sounding. They should present this section the way the aforementioned website does, “for beginners.” It is important for newbie traders to understand that they will not be ready to trade after they go through the materials their broker provide them with. The materials are usually the equivalent of preschool, not an academy!
What Can Your Broker Teach You?
Assuming that your binary options broker does not provide in-depth, ongoing training with professional traders, here is what you can expect to learn from your broker’s education center:
- What binary options are and what types of trades you can place. A lot of the “trading articles” I have seen on broker websites literally are just an overview of the basics of binary options. If you do not already know that, you probably should not be shopping around for a broker to begin with. These articles are essentially useless unless you stumbled across a binary options website by coincidence while looking for something else.
- How to register on the trading website and read the terms and conditions page.
- How to use the website to place a trade. Yes, a lot of “how to” articles on binary options sites have nothing to do with learning how to make smart investing decisions. They literally teach you how to click through the prompts on the trading platform and execute a trade—any trade, smart or stupid. You do not know how to trade binary options simply because you have learned how to click a mouse and hit “buy” or “sell,” but many of these sites would have you believe that you do.
- What money management is. Many trading sites will introduce you to the basic principles of money management, but most still will not tell you realistically how little you should invest on each trade (close to 3%). They will simply imply that you should trade conservatively.
- The definitions of basic market indicators, and how to use an economic calendar to identify when reports will be published. You may learn some basics about liquidity and volatility.
- Basic trading psychology. You will get some general advice on being disciplined and committed to your trading and not trading emotionally.
- What a trading strategy is and why you need one. A lot of brokers do not even get this far—they stop at teaching you how to execute a trade. Some brokers may introduce you to some really basic strategies; you might learn what technical analysis, fundamental analysis, and price action are. You may even learn a couple of simple systems. But that is about the limit as far as your technical education is concerned. From that point on, you are on your own.
Again, some binary options brokers do offer ongoing training, and the opportunity to learn trading methods from experienced traders. They may even work with you one-on-one to develop a trading strategy that fits with your schedule and personality. If so, that is truly excellent, and definitely a good reason to trade with a broker. But if all you see is an education center, it is really important to understand its limitations.
All too often, when you go through these basic resources (which will generally take no longer than an afternoon), you complete the course and the website tells you, “Congratulations! You are now a binary options guru and ready to trade!” What the site should tell you is, “Congratulations! You are now familiar with the basics of binary options trading and are ready to begin your in-depth education.”
Continuing Your Trading Education
How can you conduct your in-depth education? Here are some suggestions for where to go from here:
- If your broker does offer additional ongoing training, take full advantage of it. Attend weekly webinars if they are available. Show up for regular one-on-one training sessions, and work with your broker’s educators to develop a trading strategy that works for you. Do your homework! Do not expect your trainer to make you into a winner. Only you can do that.
- Consider signing up for a trading coaching program. A trading mentor can provide you with an abundance of extra resources, one-on-one training, and expert guidance. This is a great alternative if your binary options broker does not provide this kind of support.
- Register on trading forums and start looking around. You will find more free materials than you know what to do with! Thousands of traders around the world share their strategies for free. Some of these techniques are amazing, others are not. But they will not cost you a dime to investigate or test. You can learn a lot from your fellow traders! And someday, you will be able to teach them a lot in return. Read trading blogs as well. Follow along with other traders on their journeys and learn from their triumphs and mistakes.
- Check out books from the library about trading. Good old-fashioned physical resources are actually a good start before you press on to eBooks. Why? For every great trading eBook out there, there are several dozen scammy eBooks that will only waste your money. Starting with physical resources can help you learn how to evaluate trading books before you start purchasing them in earnest online. This will save you money and get you started on the right track.
Do Not Forget To Test What You Learn!
Education is an interactive voyage, not a passive experience. You could read hundreds of books, blogs, articles, and threads on trading and still be a novice if you have never put that knowledge into play. Does that mean you should jump straight into live trading? Certainly not. Imagine for a moment that you are a chemistry student in university. After you get out of your lecture on chemistry theory, do you go straight to work as a chemist? Of course not. You also take lab classes where you can experiment in a safe, controlled environment and put those theories into practice. This helps you to build knowledge you could never hope to develop with your nose buried in a textbook—without dangerously explosive results!
Like that chemistry student, you don’t want to blow up your account by jumping straight from theory into professional practice. You want to experiment in a controlled environment first, and that is what binary options testing is all about. First you run backtests using MetaTrader or another charting platform on historical data. This tells you whether a given trading system might be viable. Then you test that system in real-time on your demo account. This gives you a chance to try out what you have learned on your broker’s trading live trading platform without risking real money.
Click here to practice with a trust-worthy broker.
A huge part of the learning process happens when you are in demo. And that process never actually ends. Even after you finally do make your first deposit and start trading with real money, you will continue to learn. You will make mistakes, you will lose money, and you will have to test changes to your strategies so you can improve your results. You will keep reading articles, watching tutorials, and attending webinars. You will probably do this on a weekly basis, maybe even on a daily basis. This is true in any profession. That chemistry student from my earlier example may go back to school after beginning work as a professional chemist to enhance his knowledge and continue to grow in his career.
Becoming a binary options guru is not something you can do in an afternoon. Your broker’s training materials are important, but they are only the start—a platform of basic information you can use as a foundation to start building the real knowledge.