How much money you can earn from binary options trading will depend on your trading skills and partly luck. Ever wondered how a typical binary options trader salary looks like? Unfortunately most traders don’t like to talk about how much money they make, however there are a few exceptions. We have posted a similar article here: Trading binary options for a living.
If you browse through various binary options trading forums, you’ll see a few posts about earnings. Successful traders make well above $10.000/month, so this is not uncommon. I asked one of the managers I collaborate with on one of the brokers we recommend on our homepage (unfortunately I am not allowed to name the company) – he told me that they have users who trade $100.000 per day. Even if the profit is only, lets say 20%, then $20.000/day is a lot of money. Multiply that with 25 (number of working days in a month), that is $20.000 * 25 = $500.000, of course if the manager told the truth. But it can be more than $500k if the profit of the trader is higher than 20%. Of course not everybody will make this kind of money. I’d say only 0,001% will, but that’s just a rough estimate.
It is possible to turn binary options trading into a full time job but it will requires a lot of training and experience. Most beginner traders think that binary options trading is as easy as predicting a yes or no on the asset’s price, and most of the time this is true. Becoming successful in binary options trading is not something that can happen in a short period of time so you should not quit your day job first.
Doing Research and Learning about Binary Options
The most common mistake that newbie traders make is that they treat binary options as a form of gambling and never care to do research on the market prior to placing a trade. To become successful, you must have the attitude to never stop learning. The best way to learn about binary options is to read educational materials which is available for free at many sites.
Here are the best binary options brokers (list updated regularly)
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You also need to learn how to study charts/graphs and analyze the financial news headlines. All traders know about the standard up/down binary options but there are also other types of options that you need to learn. There are also other types of options such as touch/no touch, range and short term options that you should get familiar about.
Don’t Be Overcome by Your Emotions
Besides, newbie traders are easier to succumb to their emotions and make the wrong decision out of fear. You should never place a trade because of how you feel no matter good or bad. Fear and greed are the two emotions that you must pay attention when you are trading. Don’t let stress press you down in yourself but just relax yourself and take everything easy.
Use a Trading Signal System
As a newbie trader, you can rely on a trading signal system to get direction on how to place the right trade. It is up to you to make improvement to the trading signal based on your analysis. It is recommended that you get familiar with both the fundamental and technical analysis. You should learn how to read candlestick chart and identify the breakouts and pivot points.
Learn How to Manage Your Money
You need to learn how to manage your money and control the amount of money you invest in the trade. Many newbie traders are convinced that they have to invest all their savings into binary trading, which is a very dangerous thing to do. Prior to placing a trade, you must set a budget and set a goal of how much you want to earn from the binary trading. Firstly, you have to find out how much money you have in your savings account. You must have enough money to cover for at least 6 months of expenses in case of any emergency. You have to determine the portion of your salary that you can use for the trading activities. Most brokers require a minimum deposit so make sure you have enough money to place the initial deposit and open a trading account.
Don’t Invest More than You Can Afford
You must keep in mind that there are a lot of risks involved in trading binary options so your capital will quickly become used up if you lose consistently. Trading experts recommended that you only invest 5% of their capitals in a trade but newbies are advised to just invest 1% of their capitals. Most importantly, you must remember never to trade with money that are not yours or money that you can afford to lose.
Taking into Account All Fees the Broker Charges
Your broker might charge fees such as deposit/withdrawal fees and other fees which you must deduct from your earnings. You will want to check with the broker to find out what fees they charge as well as the minimum withdrawal prior to signing up for an account.
Stick with a Licensed Broker
Keep in mind that there are hundreds of binary options brokers but not all are good brokers. So, you need to do an extensive research on each of the brokers by visiting binary options review sites and forums to uncover customers who are complaining about them such as withdrawal issues, fees and customer support. You want to make sure that the broker you choose offers a smooth withdrawal process and don’t charge expensive fees.
In conclusion, binary options is safer because your profits and risks are capped and you know how much you will earn or lose from the trades. Another reason why binary options is safer is because many brokers offer early exit option that allows you to exit the trade early. The early exit option allows you to close the trade early and reduce the losses if all circumstances is pointing that you won’t win the trade.