9 Common Mistakes we all make as Beginners!
It is not a secret that we all are human beings and we all make mistakes. There is a beautiful lesson every time we make mistakes and personally I love making as many mistakes as possible in order to become wiser. Now, when those mistakes involve losing money, none of us is happy, right? Well, in Binary Options there are thousands of mistakes that can be made even by experts in the field. This article is mainly directed to Binary Options or Forex beginners, although you should take a minute to read it even if you are an expert or have years of experience in trading. Let's take a look at those 9 common mistakes we all make as beginners:
1. Over trading
First and most damaging mistake we do when we start trading (and even experts make this mistake too) is overtrading. If you don't know what overtrading is, basically means trading more than what you are supposed to. I always recommend from four to ten trades a day at the most because if you keep trading you become emotional and start losing money afterwards. Now, What happens if I lose money before getting to ten trades? Then stop. I recommend stopping after two or even one OTM. That way you will not blow your account in a couple of days. (If you don't know what OTM means, Click here)
2. Investing more than 10% of your balance on each trade
Binary Options and Forex are a High Risk type of investment. You can get to lose up to 100% of your investment in seconds. Therefore, no matter how much you are able to have as your first deposit, either $100 or $10,000, you should never trade more than 5-10% of your balance on your trades. Don't put all eggs in the same basket. It is really tempting to place a $1,000 trade and in 15 minutes being able to receive $700 profit, but it is the same probability you have to make that profit as that you lose it all in 15 minutes. Therefore, investing 10% of your balance or less is the recommended tip for all beginners, regardless of the strategy you are using.
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3. Double amount on next trade to recover
This is a very common mistake when we start trading, even with Demo. Whenever we lose a trade and we feel like we should have waited for a better price to enter, we double the amount of our next trade to "recover". Although it does finish ITM sometimes and you recover part of the previous loss, there is also a big chance that the second and double trade ends OTM. There, we will have lost probably 30% of our original balance. If you notice, it is almost 50% of all of our investment money. So next time you lose a trade, just continue with the same amount of investment in the next one. Binary Options is a long road, not a fas-way to get rich.
4. Not withdraw constantly
We all understand that brokers are companies ran by regular people like us. It is not a secret that when we are trading, we are competing against them as to who will keep the money that is on your balance. Now, when it comes to withdrawal processes, regardless of what broker you are using, it will always be easier to withdraw a lower amount of money. Why? Let me put it this way: Nobody likes to pay money! Brokers handle millions of dollars, that is a fact. So paying you $10,000 should be not be so difficult. However, paying you $50,000 plus another 100 traders asking for $50,000 too will make it difficult for them, don't you think? It is a 5 Million dollar withdraws!!!!! So, play it smart and safe. Withdraw weekly significant amounts of earnings. It is more convenient to withdraw $5,000 for ten weeks and have your $50,000 than having to deal with all the troubles you will encounter trying to withdraw $50,000 at one time. These are just random figures as I have seen people withdrawing $300,000 at once and they get their money so regardless of the amount you want to withdraw, do it on a weekly or bi-weekly basis to avoid facing these very frustrating situations.
5. Following too many admins
In the Binary Living Way Facebook group we have 4 different traders. Do we have to follow them all in order to be successful? Absolutely no! Each trader is over 70%-75% ITM, so it means that if I follow just one, I will end up with a profit at the end of the week. The mistake we make all as beginners is trying to follow several people providing the signals. That way, we end up following over 20 signals a day, overtrading and sometimes, losing money EVERYDAY! It is not that simple to follow signals accurately. So if you are a beginner, choose one trader, the one that fits your schedule or the one you feel comfortable with and follow him (JUST HIM) for a week or two and your results will be different.
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6. Being in several groups
I am always asked why people should choose Binary Living Way and I send them to this video to answer their question. After they watch it, they ask me, why should they choose only Binary Living Way if they can be here and in many other signal groups. Well, same reason of the mistake number five on this list. Following too many admins. In Binary Living Way we provide so many tips for education that work for us. In some other groups they provide may be the opposite tip and it works for them. After some time facing this confusion in 2 groups, the only affected trader will be you, causing you to lose money and blame either one of the groups. What you have to do is commit to one group and learn as much as you can from it. It it does not give you a good result, then try another, but never try different groups at once. The groups will continue to be successful and you will end up losing money.
7. No control on emotions
There is nothing more beautiful than looking at that 5th ITM IN A ROW, right? It gives us this type of power inside and makes us believe that we will, for sure this time, become rich in one week! Just as all of the advertisements you see on different scams. But here comes the problem; the same power we feel after seeing our balance increase so much, is the one that's blind us to realize that we need to stop. After you make such good profit as a 20% increase on your balance, there is no reason to continue. Even if it is a 1% increase, it's profit. Why risk it? Take your profit and sleep well. Emotions will tell us to keep trading because we can get 40% increase instead of 20%, but it takes us to mistake number one on this list.
8. Trusting account managers
In the Binary Options world, Account Managers are scammers. The story behind them is usually a fake profile of a person that traded with his/her own money and lost everything, therefore, they are desperate to find someone that gives them money so that they can recover what they lost, but that eventually, lose everything again. Unless it is an account manager from a broker, who I would still keep away from my money. I would use him as support to answer some questions in regards to my account and the broker but only that. Bottom line, manage your own money and be responsible with it. It does not take much time of your day to trade as long as you put a lot of effort on learning how to. Trust me.
9. Not educating
Last but not least: Self-educate yourself. The best way to avoid mistakes is to be knowledgeable on what you are doing! In Binary Living Way we have our Facebook Group, a YouTube Channel and this website with several articles that you can use for free for your own education. And even if we don't fulfill your expectations, you can find a massive amount of information online about this industry, Never stop learning.
I really hope that you take these tips seriously and wish you a great journey trading with Binary Living Way or whatever the wind takes you.
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