see clearly the direction you are going
Binary options trading is an exciting world, one which you will probably want to dive right into when you discover it! But if you are new, it is a good idea to take a moment to think things through. A lot of newbies wash themselves out by making a ton of mistakes from the get-go. If you have already made some of these, do not feel too bad. Everyone screws up. Just don’t do it again!

Putting more in your account than you can afford.

A lot of traders dump thousands of dollars into their first trading account without even considering that they might lose it. You are almost certainly going to mess up while trading when you first start out. So try starting out with 50% of what you planned on using, maybe even less. You can boost it up to a full account when you have good performance stats and have found a trustworthy broker.

Skipping testing.

Another really common newbie mistake, and the biggest one you could make, is skipping out on testing. Many traders just grab a system and go, thinking they can learn as they go along. Do you really want to jump off a cliff to learn how to fly? This is money we are talking about. You have to run tests to figure out if a system is right for you, and to learn how to use it. Do backtests and demo tests before you ever go live. Don’t have a broker that offers demo testing? Find one that does.

Overtrading.

If you are a binary options trader, your job is to trade, right? Well, yes and no. Your job is to trade well, and to restrain yourself the rest of the time when there are no good setups available. That “rest of the time” makes up the vast majority. You are not wasting time by skipping out on trades that do not fit your criteria. You are trading exactly the way you are supposed to, even if it feels like you are doing nothing.

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Not trading with a system.

onetwotrade-icon-35Who needs a trading system, when you have an IQ of 180 and a preternatural grasp of the markets? No, your gut is not the ultimate trading system. You will learn this the hard, expensive way if you insist on trying it. Yeah, admitting you need a trading method may feel like a blow to your ego, but it is the beginning of real growth. You must have a system with concrete rules for entering and exiting trades. No one’s gut is that accurate, and trading isn’t just about being smart. It is also about being focused and disciplined. That has nothing to do with your IQ points. It had to do with emotional control.

Trading with too many systems, or system-hopping.

Conversely, some newbie traders make the opposite mistake, which is pursuing too many trading systems. They think the fastest path to riches is to give themselves as many roads to travel by as possible. This may make intuitive sense to you, but if so, you are forgetting something. No system works in the hands of someone who has not learned how to use it. And it is pretty tough to learn something when your attention is divided a dozen different directions.

Think about giving someone who knows nothing about guns a sniper rifle and expecting them to just miraculously know how to shoot a target. If you want someone to shoot well, first you have to teach them all about the weapon and how it works. Then they need to take it out to the practice range day after day. Next they have to learn how to shoot well in a slew of different conditions, and so on. A trading system is just like that.

Another big mistake is jumping from system to system. The problem here is really the same. Since you are not really focused on any one system, you never get a chance to master it.

Reading instead of doing.

There is an impressive amount of completely free information about trading available online, which is awesome! And you should read a lot of it, but you need to eventually make the leap from reading to doing. This may be tricky for you if you are a cautious type, but you do not need to hold yourself up forever! Get a free demo account and try it.

Obsessing over the news.

Unless you are actually trying to become a fundamental analysis trader, there is no reason to be hyper-fixated on the news every day. All you will do is confuse yourself. Basically, unless your system itself makes use of the news, all you will be doing is throwing another factor into the mix that you do not have any established rules for. This will tempt you into making discretionary choices with no basis. Do not overinflate the importance of the news or assume you can interpret it without training. Unless you are an expert, you may do better to ignore it.

Conceit.

Nothing will kill a trading account faster than conceit. If you have great natural abilities, then be happy you do. Be proud of them, but put them to good use. Even someone who is a “natural” at trading is going to have to do a lot of hard work to hone that natural ability into expert skill. So be willing to make that effort, and never assume you can outthink the market!

Learning how to trade is challenge, but it can also be a lot of fun. Most of the mistakes beginners make come down to trying to shortcut through the learning and testing phase. Be willing to put some serious work into coming up with one great trading method, and at some point, make the leap to go live. Be ready for some hurdles and missteps along the way, but keep on learning and training and you will be great.