shutterstock_10224433There is a definite crossover between investing and gambling, especially these days with online trading becoming such a booming industry. Binary options trading in particular tends to draw the gambling crowd for several reasons. It is easy to invest in binary options, even with a small bankroll, which appeals to a huge number of people. You can learn to trade in minutes, and you can win a trade or lose in as little as 30 seconds. It is easy to see how this could appeal to a gambler. Waiting 30 seconds for a trade to unfold is not so different from the experience of waiting for the roulette wheel to settle on red or black.

Whether you win or lose a binary options trade doesn’t have to be as arbitrary as a spin of the roulette wheel, though. Roulette is a game of pure chance. There is nothing whatsoever you can do to control the spin of the wheel or the way it lands. In that way, it is very different from a game like poker where you have a chance to lend your skill to the action and come out on top regularly and reliably—if you are good at what you do. Trading binary options can be like poker instead of roulette, but only if you are good at what you do, and you do everything you can to mitigate chaos and unpredictability.

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If you want to lose at binary options, treat it like roulette instead of poker. Here’s how you do that. Make any of the mistakes below, and you are guaranteed to wash out of this game before long!

1. Never use trade tools like early close.

Binary options brokers usually provide their traders with some tools that they can use to control aspects of their trades. Do you ignore tools like early close, double up, and rollover? What about trade types like Option Builder, where you can choose your own expiry time? Tools like these allow you to choose when the roulette wheel stops spinning. And if you have developed your eyes to read the market signals clearly, you may be able to choose whether the wheel stops on red or black!

Of course, you cannot do that with real-life roulette. That is why choosing to ignore these valuable tools is the equivalent of casting your fate on the spin of the wheel—a wheel you cannot control. There are professional poker players, but no such thing as professional roulette players. There is a reason for that. There are not a whole lot of pro binary options traders either. As one binary options broker once told me, “We provide these tools to traders, and 95% of them never use them. The 5% that do are the winners.”

2. Trade without a strategy.

Poker players who do well always have a strategy. They have studied their game and practiced and honed their techniques. Roulette players can make no such thing. You cannot strategically play roulette, beyond trying to calculate the odds. If you want to treat your trading the same way, try trading without a method or system. Doing so will ensure that your wins and losses are just as random and unpredictable as they would be while playing roulette. If on the other hand you want to win, trade with a strategy, and play binary options like the poker player!

3. Never practice.

As mentioned before, poker players practice. It can take years to develop into a great player. Roulette players do not practice for the simple reason that practicing would accomplish nothing in a game that relies wholly on arbitrary chance. If you want to treat your binary options trading like roulette, then refuse to practice. Say no to demo account offers, and never do an hour of backtesting.

If you decide not to practice, you will be paving the path to failure and lining it with the money you use to fund your binary options account. If on the other hand, you do backtest, and then take full advantage of the demo account you are offered before you trade using real money, you will be paving the path to success. Like the poker player who plays numerous home games without real money before buying in at the table at the casino, you will have given yourself a chance to learn without losing money along the way.

4. Never take your trading seriously.

A serious roulette player is more or less unheard of—except in the case of gamblers with serious problems who have no idea they are playing a game of chance. That does happen. As a binary options trader, you have the choice to take your trading seriously or not. Poker players, unlike roulette players, have this choice as well. Those who take their game seriously, at least on some level, are much more likely to win with regularity. They will also make smart bankroll management decisions. You can follow the example of the roulette player or the poker player. If you choose the way of the roulette player though, and treat your binary options trading like it is only a game, you will lose over the long run.

5. Never analyze what you are doing to make improvements.

This is something else a roulette player can never do, because there is simply nothing to analyze. There would be no point in a roulette player keeping a journal. A poker player on the other hand could benefit immensely from logging wins and losses as well as descriptions of what happened during the course of each game.

As a binary options trader, you could be like the roulette player and never take the time to self reflect … or you could instead choose to log your wins and losses, and analyze each of them to figure out why you won or lost. You could routinely look over your trading methods and figure out what you could improve. You could test and practice, and hone your strengths until you become truly successful.

Binary options trading has a lot in common with gambling, and in some sense, every trade is a gamble. You are putting your real, hard-earned cash on the line with every trade you make, and to some degree, chance will always play a role in whether you win or lose. There are no perfect systems that can guarantee that you win 100% of the time. There are good systems, however, which can help you to maximize your wins.

If you choose to take advantage of the tools offered you to control your trades, choose a strategy which is effective, and practice before going live, you will be playing like the poker player and not the roulette player. If you do that over the long term, you have a good chance to win a lot of money trading binary options, and maybe even go pro.