3 reasons why you lose money with binary options

why you lose money binary options

If you are one of the new traders who can’t seem to make a profit using binary options, or you have few years of experience in this domain but are still not able to be profitable with this type of trading, it means that you aren’t using binary options correctly. If you recognise yourself in these few lines, it’s probably the reason why you are closer to failure than to success with binary options. Let’s see what you should do to avoid catastrophe.

You don’t take your education on binary options seriously

Are you a beginner in binary options trading ? You think that binary options are just a matter of “high” and “low” and that it is really simple to deduce where this trend is going ? Or that it’s all about luck ? Then let us tell you that you are totally wrong ! Binary options have been created on a simple base, to make speculation on financial markets accessible to everybody, but it’s not simple to analyze the direction of a financial market.

Thinking that binary options are easy, traders generally skip the trading lessons step and don’t attend the training in binary options provided by binary options brokers to their customers. Therefore, being over confident and ignoring the fundamental basics of binary options trading, traders fail and lose a lot of money. Don’t underestimate binary options, spend a few hours studying the materials provided free of charge by brokers. Binary options classes and lessons will allow you to avoid the most common mistakes but also to realize logical graphical analysis that will generally lead to profitable trades.

You think that all brokers are the same

It’s true that binary options scams have become much more common over the last few years, however it doesn’t mean that you are going to be scammed if you make a deposit to a binary options broker. Just because you have heard about scams or have been scammed before doesn’t mean that the nightmare will happen.

Please know that thankfully there are some binary options brokers who are regulated and possess official authorisations from financial regulators, allowing them to legally offer binary options trading to investors and individual speculators. These brokers who own licences from financial authorities are fully trustworthy, they are transparent about their activity and are controlled by financial authorities.

24Option is a good example of a regulated binary options broker, with whom you won’t face any bad surprises. This broker is regulated by the main european financial authorities, such as the regulator in France (AMF), Germany (BaFin, Spain (CNMV), Italy (CONSOB) and the UK (FCA). 24Option is authorised to provide its services to traders and posses licences from local financial regulators. Opening a 24Option account as a european trader will protect you against scams that exist in that industry.

You are expecting unrealistic benefits

A lot of binary options traders, in particular the beginners, think that binary options are a guaranteed way to earn money on the internet. Add a zest of benefits and promises made by a website or a broker, and you get the perfect cocktail that will lead you to bankruptcy. Most of the binary options traders invest the minimum amount when they open an account at a broker. At 24Option, the minimum amount is $250. Once this deposit is made, some beginners think that they are going to earn €100 daily or €20,000 after 2 or 3 months of activity.

Keep in mind that the higher the initial investment, the higher the possible profits will be. However, we are not saying that you should empty your bank account to practice binary options trading… Invest what you can afford to lose. You want to start trading with $250 ? No problem, but don’t expect to make an unrealistic target profit, respect the risk management and keep a cool head. Aim for $5 or $10 per trading session first, then once you have doubled your capital ($500), double the risk and aim for $20 for example.

To summarize, choose a trustworthy binary options broker and be patient. Learn the basics of binary options trading and train yourself until you find a profitable trading strategy that makes sense for you, even if it takes weeks or months. It’s the only way to earn money using binary options. Don’t precipitate your beginning and act like a responsible and mature trader.

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