Many agree that the huge boom in the growth of the online retail binary options industry is largely attributed to how easy and accessible they are as an investment vehicle for literally anyone. It is a fact that it takes little more than a few minutes to open an account with a broker and start placing binary options trades. Catchy advertisements, effective marketing campaigns and the temptation of various bonuses and deals offered by brokers, lure many novice traders to begin placing trades, but often leave them feeling bewildered and lead them to making losses.
Consequently, this highlights the significance of the choice of broker for any new binary options trader. You should never take this decision casually and light-heartedly and you choose your preferred broker carefully. As a general rule, you are better off signing up with regulated brokers after verifying that their registration with a reputable regulator in a respected jurisdiction is indeed valid. To this end, it is safer to check that the broker is registered via the regulator’s website and not through any other source. Moreover, look for and prefer brokers that operate with openness and transparency and dedicate enough time to find out about the available peer reviews and trader feedback to better shape your opinion of a broker. Finally, go for brokers that offer social trading.
Social trading is one of the newer trends in the online trading industry but it has quickly become very popular since it is very useful for inexperienced traders who get the chance to replicate the moves of other successful traders and meet with the same success, while it is also good for those being copied, because besides giving them the chance to share their knowledge and expertise, it could, on certain social trading platforms and venues, also earn them an extra income rewarding them for the numbers of traders who choose to copy them.
Copying the trades of other traders could be potentially very beneficial and lucrative, especially for a new trader and it could also be a didactic, valuable, learning experience. However, if you want to stand a chance to really become successful binary options traders, just copying from the best or even learning from them is not enough and it will not always do the trick.
Just as in the case of signals services and in many other instances, so in the case of the traders you copy, you should always bear in mind that past performance is not an indication of future results, nor should you just copy someone because they have the most copiers.
If you want to become an effective trader, then it is imperative that you invest in yourself and your own financial education, which is definitely an investment that will pay off. Once you educate yourself, you will be able to perform your own research in terms of brokers, assets and instrument types and choose the most suitable for you. Moreover, you will be in a position to decide the best way to have a diversified investment portfolio and place your stop losses according to your own risk and loss tolerance levels and – what is most important- you will be in a position to devise your own personal trading strategy and plan.
Having a plan though is useless, unless you decide to stick to it. Emotions while trading may be overwhelming and overpowering and lack of control over them may lead to dismal failures, especially if one freaks out and deviates from the plan. Patience is also a very good virtue for traders and a quality that you should cultivate, while you should resist the temptation of becoming greedy or expect to make huge returns overnight.
In short, and although getting help from peers or reaping all the benefits of social and copy trading is completely possible and plausible, the road to becoming an effective and successful binary options trader presupposes that you can place everything in context and can grasp at least the basic of what is going on and that you remain cool and disciplined at all times.
George Milios is the founder of onlineforextrading.net, the binary options and forex news portal which is dedicated to providing you with all the information you need to successfully trade.