The 3 Most Important Things You’ll Ever Learn About Binary Options Trading

I cannot begin to tell you how many times I have seen articles, videos, and advertisements with titles similar to this article. You see a banner that says, “The single most important thing you will ever learn about investment!” and find yourself watching a video about how to invest in binary options and turn $100 into a million dollars overnight. Then, on the other hand, you see an article that says, “You absolutely must read this before investing in binary options,” and the author tells you that binary options trading is a scam and to run away fast.

There are so many myths and misconceptions surrounding binary options trading that it can be hard to sort out the truth. These misconceptions are driven by aggressive marketers and affiliates who desperately want you to invest your money as well as those who are opposed to online trading for one reason or another (perhaps they lost money themselves, or know someone who did, or maybe they run an investment firm and would rather you went through them). In the interest of correcting misconceptions from both sides, I want to tell you the 3 most important things you ever will learn about binary options trading.

1. It is possible to make a living trading binary options.
2. It is incredibly rare to make a living trading at all.
3. Whether you will succeed or not comes down to a combination of starting capital and persistence.

Let’s start with the good news, and then talk through the sobering realities that go with it.

1. It is possible to make a living trading binary options.

Those folks who tell you that you cannot make a living trading often have ulterior motives or bad personal experiences. You will encounter far more people who fail than succeed, so it makes sense that a lot of the assessments you run into will be negative. They are however incorrect. They were unable to make a living trading for one reason or another. Maybe they took an approach that that relied on intuition or luck, or perhaps they burned themselves out of the market through over-commitment. Or maybe they lacked the discipline to stay the course.

Regardless of why they failed, you can succeed. Now and again, you will run across a professional trader who is for real, and makes a living from the market. Those individuals are solid proof that it is possible to make a living trading. Interview them about their experiences, and the honest ones will not tell you that it was easy, or that they were successful overnight turning $100 into a million dollars. They will tell you that it took years for them to get from where you are at the beginning to where they are, and that you need to steer clear of the lies that come from both sides. You cannot give up based on the bad experiences of other traders, but you also cannot allow yourself to be taken in by impossible promises from affiliates.

2. It is incredibly rare to make a living trading at all.

I have heard many different estimates as to the percentage of traders (in binary options or any online trading field) who actually succeed. One broker I spoke to estimated that 80% of traders fail. Most of the estimates I have heard in the Forex world are closer to 90%. In reality, I believe from experience that the fail rate is probably even higher than that. And the success rate at making a living? That is even lower than the general success rate. A lot of traders who “succeed” make enough money to buy some extra luxuries or set aside some savings, but not enough to quit their day job and depend solely on their trading income for a living.

If I were to place a guess, I would estimate that maybe 95% of traders ultimate fail—many of whom may have succeeded at one point or another on their way to failure. Out of the 5% who make it, ironically most of them have also failed once or repeatedly, but ultimately they were able to get back in there and stay profitable over the long term.

As a binary options trader, you will court failure sooner or later; that is a guarantee. You will lose trades. You may be forced to take time off and you will probably routinely find yourself going back to the drawing board. If you are very cautious, however, you never need to blow an account. Your demo account is always there for you, and it is much wiser to take time off of live trading with real money when you have to in order to correct mistakes than it is to try and hang in there and end up blowing an account.

If you are willing to do that, you should end up ultimately building success on small failures, instead of failure on small successes! It does not matter if you win big on luck in the beginning only to lose it all later and ultimately quit—those early victories will not amount to much. What matters is if you are there in the end, and years down the road, you are trading profitably. Slow, steady, repeatable gains and well-managed risk will get you there.

3. Whether you will succeed or not comes down to a combination of starting capital and persistence.

It would be nice to say that venture capital does not matter, but that would be misleading and wrong. You can start trading binary options with just a couple hundred dollars, but realistically, you want to start with at least $500 in your account, more if possible. Also important is that you have some kind of a consistent income outside of trading. That way you can focus on growing your account and not on continuously withdrawing from it to finance your living expenses.

Most importantly though, you need to have persistence—along with an abundance of other personal qualities like courage, patience, honesty, and a sense of purpose and balance. All of these qualities will be tested time and again, but your persistence will be tested most of all. If you are not committed to your goal of becoming a professional trader, there is no way you will make it into that tiny percent that succeed. If however you are dedicated enough to weather the challenges of trading and the many bumps along the road to success, you have a really good shot at making it.