Is it possible to trade Binary Options for a living

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Is it possible to trade binary options for a living?

So while all the strategy posts, and articles on money management, trading psychology, brokers, trading software options, indicators, and so forth might provide the foundation to getting yourself personally set up in the trading business, the main question that everybody should be applying to themselves is, can I actually trade binary options for a living? Can I log on to my computer every weekday morning, pull up my charts, my trusted broker, and do this as my form of work for years on end without having to return to my day job ever again and retire comfortably?

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It’s not an easy question to answer, as everybody’s situation is different. For one, yes, it is mathematically possible to do this for a living if you are good at it. In the binaryoptions.net forum, I posted a probability spreadsheet that you might find useful as a way of estimating how much money you can make over a given period of time given your start-up capital, in-the-money percentage, trades taken daily, percentage invested, and things of that nature.

One thing I must say is that in order to actually trade profitably to the point where you do this as your living, you’re more often than not going to need a lot of start-up capital. You can theoretically turn smaller amounts of money into larger sums, but in order to do that successfully you’re going to need to be able to a) have a very, very high ITM percentage and b) consistently take trades in higher volume.

I’ve mentioned in the past that trading in high volume is not something I can recommend, as it contributes to overtrading – i.e., taking lower quality set-ups. You can turn very small sums into large sums by trading lower volume, but this would entail very risky money management practices, basically where your trade size is equal to (or nearly equal to) the sum from your previous winning trade. For example, you deposit $200, trade that $200 with your first trade, which you win and now have an account balance of $360. You would then take that $360 and trade that with your second trade. Upon winning, you would now have $648 and trade that with your third trade, and so forth. This would allow you to continue trading in lower volume and only take the best set-ups. But the main issue with this form of money management is that once you lose – which is inevitable because everybody loses trades – you would wipe out your account completely. But I, of course, don’t recommend this strategy at all. I am a big proponent of fixed-investment money management, where a single amount of money is invested into each trade. This amount remains fixed until your profit returns and trading skill dictate that you can increase your trade size.

The truth of the matter is that trading is very difficult even if you do have a lot of start-up capital to begin with. Even if you have $50,000 in saved up capital to dedicate to trading (which isn’t all that uncommon among forex traders) and you are absolutely sure you can trade this money profitably, it’s not going to be easy getting a 100% return on an annual basis, giving you a yearly salary of $50,000.

The scary thing about the trading profession is that no salary is ever guaranteed to you. Your profit is dictated entirely and directly by your trading results. This can be pretty unnerving when your entire financial future is contingent on getting profitable trading results. And this is a huge reason why many traders will start panicking when they aren’t getting the results they want/need and end up making irrational trading and money management situations and end up wiping out altogether. It can be a very, very precarious profession for those reasons.

Here is my opinion. I believe all traders should look at trading as a means of supplementing their incomes, rather than replacing their current stream of income altogether. Nobody should make the “newbie” mistake of viewing trading as a get-rich-quick scheme that will allow them to quit their day jobs because it really isn’t that easy.

Making A Living From Binary Options

It is quite possible to live off binary options; however, it requires a lot of input to make it work. Binary options provide numerous ways of making money by simply learning how to trade and when to trade. Binary options usually promise quick and high returns on your investment, with some offering up to 75% return on the principal. However, it is very important to know the rules that you are required to operate within as well as develop a nose for business opportunities.

Over the years, binary option trading has become popular, providing one more avenue through which investors can be able to make a living. To make a living from trading in binary options, you will require discipline, focus and a lot of ingenuity. In addition, you will be required to gather as much information as possible so as to know your options and when to use them.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Top Binary Options Broker 2020!
    Best Choice For Beginners and Middle-Leveled Traders!
    Free Demo Account!
    Free Trading Education!
    Big Sign-Up Bonus!

  • Binomo
    Binomo

    Trustful Broker. Recommended Only For Experienced Traders!

Points to consider

Like in any other market, the trader in binary options trading is normally advised to diversify their portfolio so as to spread the risk over a wider pool of choices. Diversifying your portfolio also allows you to earn profits from different areas. In this way you can absorb any losses much better without losing a large part of your investment.

However, it is important to note that a massive principal may be required to earn enough returns to be able to live off the trade comfortably.

Proper money management skills are also required if you are to live off binary options trading. Since you will be required to invest a large amount of money, it is only fair to yourself that you develop the best money management skills you can get. This allows you to not only track your money, but also notice the opportunities that may be beneficial. Money management also allows you to pay your bills in time while ensuring that you are liquid enough to trade in binary options whenever the need arises.
The availability of constant and continuous cash flows is not to be put down in the case. The flow of money is normally good for business since money that is in the system has a higher ability to make more money than that which is stored. Like a forex market, you will be required to know when to cash out of an investment and when to bring in new capital and take advantage of a new opportunity. As such, it is important that you have a source of cash that you can easily access. This is also the reason that most brokers offer bonuses to their clients; it increases their liquidity and activity in the market. A proper schedule for withdrawals and deposits as well as bill payments may help in ensuring that you are well taken care of.

To make a living from trading binary options, it is advisable to choose a broker with a proper trading platform. A good trading platform makes it much easier to make money from the trade of binary options thereby making it much easier to make a living from it. In conclusion, it is possible to make a living from binary trading; however, you must be ready to accommodate the risk factors that come with such a choice.

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IQ Option is one of the most reliable and secure brokers and a safe haven for all traders. This broker is regulated by CySEC and offers options for as low as $1, plenty of stock options and a great trading platform!

Can A Beginner Make Money With Binary Options?

But wait! First we have to see if binary option trading is legal in your country.

Binary Options Trading in your Country

Depending on your country, here are the brokers available to you in April, 2020:

Country Binary Options Available? Broker Info Best Broker
NO Trade stocks, indices, currencies. eToro (visit site)
YES Regulated US Binary Broker Nadex (visit site)
YES Regulated AU Binary Broker HighLow (visit site)
NO Trade stocks, indices, currencies. n/a
Mostly YES Binary Broker for non-EU/US/AU/CA traders IQ Option (visit site)

*Other countries: Binary options is still available to most non-EU/US/AU/CA traders however there may be some exceptions.

  • EU Traders are banned from binary options trading. The best alternative is eToro.
  • US Traders should go to our US Welcome Brokers page.
  • Australian Traders have a great choice available: Highlow.
  • All other traders (if you are not from the US, EU and AU) can sign up with IQ Option.

Beginners think that all a trader needs to do is go on one hot streak!

New traders often say to themselves: “just ten wins in a row and all of a sudden I will be a new trading mogul”. People looking for quick money think, that they can quit while they are ahead on a hot streak and go home richer than they could possibly imagine.

The truth is that you need a strategy and discipline to make successful trades on the long term. You should start by picking a legit broker first.

If you are just starting out with trading, then this is the perfect guide for you to start making money with binary options trading.

Here is our #1 Rated Broker

IQ Option – Best Trading Platform

IQ Option is a trading platfrom that is regulated by CYSEC. It is the best trading binary options broker on our website. It’s a perfect pick for new traders.

  • Trusted CYSEC Regulated Broker
  • Minimum Deposit: $10 (Lowest In The Industry)
  • Free Demo Account

How To Get Started With Binary Options Trading

Unfortunately binary options trading was banned in most countries but there are many more assets that you can trade: stocks, commodities, bitcoin, indices and more. There are many safe and regulated brokers.

You can start with a trading signals provider, especially if you are a beginner. FX Atom Pro looks really promissing.

  1. Step1: Sign up with 24Option
  2. Step2: Make a first deposit
  3. Step3: Start trading using trading signals

Alternatively you can choose a reliable broker like IQ Option that offers free demo accounts.
IQ Option is the most trusted trading platform at the moment. They are regulated by CYSEC and they have a stellar reputation in the industry. The minimum deposit is only $10 which is perfect for beginners.

Forex Trading – The Best Alternative To Binary Trading

Binary options trading may be too risky for you. Or maybe you heard too many horror stories about binary trading? We recommend you to try out Forex trading instead.

Forex brokers offer CFD and even Cryptocurrency trading. Most Forex brokers are regulated and have been around for many years. Here is the best Forex brokers:

Rank Broker Min. Deposit Regulated Features Review
$100 YES + CRYPTO TRADING TRADE NOW
$200 YES + ASIC LICENSE TRADE NOW
$200 YES + COPY TRADING TRADE NOW

Common Mistakes of Beginners- And How To Fix Them

When a beginner goes in unprepared trading binary options, the broker will feast on them. New traders often make mistakes such as taking way to big a position for one trade, taking a bad loss, and then staying way to small the next 5 times.

They may even experience winning easily on small trades, but they never make back the big loss. New traders take way too many trades, let emotions control their trading, and don’t have the self control to stay out of low percentage trades that they know have small chance of making them money.

After knowing all the pitfalls, why would a new trader ever decide to open a binary options account and become a trader? Well, they do it because they have the power to win systematically if they have some intelligence and a plan on their side.

A new trader needs to understand the most common pitfalls, otherwise they may not even know that they are making a mistake while they do it! With that in mind, here are the most common mistakes new traders make, with what they should do instead.

  1. Not taking every trade with a purpose. Beginners often find themselves taking trades based on a feeling, or out of boredom. This is a surefire way to make a broker rich. Never enter into a trade without a defined thesis as to why you are doing it. Think the trade over rationally before entering. Is your thesis really valid? Is it strong? What do you estimate the probability of winning given your experience? Are you hoping for the best outcome or considering the most likely outcome? Make every trade count.
  2. Letting emotion influence – when a trade is entered into, or how big the size of the trade becomes. Never let emotion influence your trading. Good or bad it will never help you. Trading is for cool rational thought, striving to systematically take profits.
  3. Taking way too big sized trades: Understand that you are going to have losses along the way. Even the best professionals do. Never let one trade significantly affect your account balance in a way that would affect your future trading. A good rule of thumb is never to take on a trade bigger than 1/15 of your total account value. With binary options I would recommend 1/20.
  4. Not learning from mistakes and repeating them over and over: Keep a trading journal as we have recommended before. Jot down a quick sentence or two whenever you learn something new. Do whatever you need to do to prevent yourself from repeating mistakes.
  5. Becoming frustrated and quitting right before you get good: The difference between making a lot of money systematically and losing money can be very narrow. Don’t let frustration keep you from realizing your ultimate goal. Understand that there will be lumps along the way, but there will also be victories, and the lumps make the victories feel so much sweeter.

How Beginners Can Make Money

Even with so many ways to mess up, beginners to binary option trading can make money if they work hard and follow a system. The key to binary options trading is to control risk. As a result, a trader can never lose too much money on any particular trade. Hypothetically, a trader has a 50% chance of being correct on any trade whether they buy a call or a put option. To make money, a trader only needs to be correct on about 60% of trades of the trades that they take. This means that of the trades that a beginner with absolutely no edge (an edge is something giving a trader a better than random chance to make money) would take, they need to figure out how to turn about 20% of them into winning trades.

Binary Options – How Much Can You Make?: This is not a simple question. There are certainly traders who make a living with binary options. You could make thousands of dollars every month. However the best is if you start with lower expectations. Making hundreds of dollars steadily is a good way to start.

Here are possible ways that any beginner can easily do this:

  1. Use a signalling service. While most are not are not going to give a trader a significantly better than random chance of making money, they still should tilt the odds into the trader’s favor. This is all any trader can ask for. There are paid services out there such as elite trader, but even a free service from a site like barchart can give you the edge you need.
  2. Learn to use technical indicators. Technical trading involves using strictly price action (price charts) to predict future movements. There are a lot of indicators out there, but some of the most common ones involve using moving averages. Examples of popular indicators are MACD, relative strength index, and bollinger bands. If you can find an indicator that works well for the security you are trading you can gain the edge you need in order to turn some of your would be losing trades into winners.
  3. Trade stocks before trading binary options. Stock trading is less volatile for a trader’s account than binary option trading as long as the trader does not use leverage and sticks to securities priced over $5. If you can figure out how to be correct on more than 50% of your stock trades, you can take what you learn and apply it to binary options to multiply your earnings power.
  4. Track your performance in each binary option security. Most people will be better at trading some stocks or commodities or currency pair than they are at others. The simplified reason for this is that each particular symbol will move differently than the others because each one has its own characteristics and traders involved in moving the price. If you find a handful of option trades that you are consistently profitable in, stick with what works and increase your size. You don’t need to waste your time and money on unprofitable trading.
  5. Buy the right option length for your trading style. Some trading styles will work better over very short term trades, and some will work better over trades held for a long time. Know your style and the appropriate length option you should buy. A value investor for instance would not be sensitive to price changes over a 1 minute option, but may be correct on a super high percentage of trades over a 6 month period.

Binary Option Trading Is Not Easy For Beginners

The problem with this dream is, how often does this really happen? Let’s just say a lot of brokers would never be in business if it happened very often that beginners made money.

Above all, beginners have dreams of being smarter, better, and luckier than everyone else who has every done something, but the harsh reality is that trading in any form is not easy.

Especially when it comes to making money from trading, it takes hard work, dedication, and a commitment to learning. And when I say learning I don’t mean just reading a couple articles, I mean actually learning from your wins, from your losses, from hard earned experience. As a result never take a trade and learn nothing from it, especially as a new trader.

What Our Readers Asked

The short answer is yes, you can make a lot of money trading binary options. However it will be very hard to do so if your initial deposit is low. Always keep in mind that binary options is risky and you could also lose money.

A binary options broker makes money when you lose your trade. This is the main reason why there are not fees when trading.

Yes, many traders have success with binary options trading. You can even follow some of these traders. In order to do so, pick a broker that offers social trading. This way you can pick your favorite trader and copy their actions.

Do We Recommend New Traders Even Try Binary Options?

Of course! Every successful trader was new at some point. Just because a lot of traders go into trading without educating themselves or having realistic expectations doesn’t mean you will as a new trader. In fact, since you are reading this article you almost decidedly will not. At How We Trade our job is to prepare new traders for success. So move forward knowing you have a strong ally in us!

Interested in opening an account? Check out our homepage for the best trading platforms, along with our top rated binary options brokers.

IQ Option – Best Trading Platform

IQ Option is a trading platfrom that is regulated by CYSEC. It is the best trading binary options broker on our website. It’s a perfect pick for new traders.

  • Trusted CYSEC Regulated Broker
  • Minimum Deposit: $10 (Lowest In The Industry)
  • Free Demo Account
Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Top Binary Options Broker 2020!
    Best Choice For Beginners and Middle-Leveled Traders!
    Free Demo Account!
    Free Trading Education!
    Big Sign-Up Bonus!

  • Binomo
    Binomo

    Trustful Broker. Recommended Only For Experienced Traders!

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Binary Options: How To Start Trading
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