Pretty much every single new trader will lose money at first. That’s just how the market works, there is a big learning curve and it takes time to acquire the skill necessary to make money. This is not the problem. The issue is that beginning something new can be very exciting and it is easy to want to commit yourself fully to it right away. It’s wonderful to approach trading like this, but in the case of binary options trading, the results can be disastrous if you’re not careful. Trading too much too soon will only have negative consequences. The bigger implication here is that in something that involves a lot of money like trading, the negative consequences translates into a lot of lost money.
Because of this fact, all traders need to have a lot of patience, and the sooner you acquire it and apply it, the more money you will save. Have you ever gone to a casino and lost a little bit of money playing? What’s your natural reaction to this? If you’re like most other people, your first thought is: it’s okay, I will win it back soon. But what if you don’t? What’s your next thought? Panic, for many. And this is where things quickly disintegrate. When emotions, especially negative emotions, step in, your trading strategy becomes affected. When you deviate from that, you make poor decisions, and because the odds are numerically in the brokerage’s favor, you will end up losing money.
How do you avoid this? The first step, and really the most important one, is to find a trading strategy that you unwaveringly believe in and always stick to it. But if you’re a new trader, this is tough; you simply haven’t been trading long enough to have built up the confidence that you need to do this.
The only way to avoid this scenario is to gain experience before you use real money. You can do this on your own through paper trading, a demo account, or astute observation and market study. Or you can purchase a trading system, either through an automatic trading program or a signals service of some sort. Any of these things is acceptable, and any of them can cause you great success. But experience is still necessary. No one strategy is perfect, and your strategy can always be improved upon–even if it’s a purchased strategy. The more you know, the more you can customize things and make them your own. You want something that works for you, not someone else. It’s your money, after all, so you want to use it in the best way possible.
In short, you need to practice a lot more than you actually trade before you get serious. Actually, this is good advice for all traders. Trading too much is never a good thing. In most cases, you will earn a lot less when you’re right then you will lose when you’re wrong. In other words, losing once is worse than winning once. You lose 100 percent of your investment when you’re wrong, but only gain 80 percent or so when you’re right. Inevitably this will catch up to you and if you do it for too long you will go broke. So take your time, learn the marketplace, and practice–a lot. It doesn’t matter how you practice, just practice until you have sufficient knowledge to make money. Instant success happens, but 99 times out of 100, it is dumb luck. Dumb luck always runs out in the trading marketplace. Just make sure that you don’t fall into this category. You’ll always lose once in a while; it is unavoidable, unfortunately. But with increased knowledge of the assets you will be trading and the behavior patterns of the market, you can minimize your losses before they become unmanageable.