New binary options traders will usually face a steep learning curve. For many, their bankrolls do not support the learning curve and they end up losing most or all of their trading capital. There are a few things you can do to combat this, however.
First, being prepared is necessary. If you have never traded before, binary options are a great place to start because of their ease of use, but this doesn’t mean that it is easy to profit. In fact, without a good deal of practice, you will probably lose money trading binary options at first. So instead of jumping right in, just observe the markets for a while first. This will help you to familiarize yourself with things, but it will also help you to spot when prices are more likely to go up or down. This is the core of binary options trading.
The next step is to solidify your trading strategy. You cannot be successful based upon luck alone. In the markets, the deck is severely stacked against luck. So you need some sort of cohesive strategy to compensate for this. There are plenty of successful strategies out there, you just need to find one that meshes with your particular goals and trading style. Going against your natural trading style will be uncomfortable. You never want to trade outside of your comfort zone—this ultimately leads to going broke.
The simplest way to begin devising a strategy is to look at which assets are most likely to finish in the money. You want to go with the underlying assets that are most likely to move in the direction that favors you. Depending upon the length of time before the expiration time on your binary option, either technical or fundamental analysis methods will work here. For the short lived binary options, having an up to date chart is essential. The longer the life of the binary option, the more likely you will be to use fundamental analysis methods. This is because of the fact that fundamentals have a smaller influence over the trivial ups and downs that assets experience on a daily basis.
Of course, there are exceptions to these rules, so knowing the underlying asset that you will be trading is key. The more you know, the better your chances of success become. Simplicity does not guarantee that you will be profitable. You need to have a clear outlook on exactly where you think the asset in question is headed, and the only way to do this is by being good at interpreting data. Binary options are deceiving. Because they are so easy to trade, people think that they don’t need to do their homework. While the homework might not be as intense as it is for traditional trading, it still needs to be done in order for you to succeed.
Find a strategy that you can use successfully. No strategy should ever go without evolving, so remain open to new market data and always strive to make your strategy better and better.