We have all heard great binary options success stories. Some traders have made millions within weeks. You should ignore them all. While these stories are mostly true, they are of little value to you, and following the concepts laid out in them will probably cost you money.
In this article, Binary options success stories, you will learn:
- Why binary options success stories are of little help to your trading success,
- Why you should not expect to repeat magic success stories, and
- How you can become successful without falling for unrealistic promises.
With this knowledge, you will be able to define a realistic path to trading success.
Why you should ignore binary options success stories
Some binary options traders make it look easy. They make money from the start and become rich within weeks. When other traders want to become successful, they turn to these traders and hope for them to unveil some magic story that makes their success story repeatable.
This hope is ill-fated for three reasons:
1. Most of these traders got incredibly lucky
All of the big brokers have millions of customers. By the sheer force of the odds, some of them will win their 50 trades in a row and become rich overnight. This success has nothing to do with what these traders did – they just got lucky.
Of course, these traders will seize the moment and write a book or start a blog. Unaware that their success was a product of sheer luck, they will promise other traders that they can repeat their magic success if they only subscribe to the same idea they subscribed to.
If you apply these concepts in your trading, they will probably fail you. Since your odds of getting as lucky as these traders are astronomically small, you will probably invest in a flawed strategy and lose money.
Don’t make this mistake. Ignore the success story.
2. These traders might be incredibly good
Michael Jordan had some unique elements in his game that made him the best basketballer of his time. Millions of people tried to copy these elements and failed – because they were not Michael Jordan.
Great successes that are not entirely based on luck are based on unique talent. Only one person in a million comes even close to this unique talent. For everyone else, trying to copy the way Michael Jordan dunked from the foul line will result in a miss and a broken ankle.
The same applies to trading. If a trader with unique mental abilities has found a way to get rich overnight with a strategy that seems intuitive to him, the rest of us will probably be unable to copy it. We are better sticking with what we can do and ignore the success story.
3. Trying to repeat a magic success only distracts you from good trading
When new traders fall for the unrealistic promises of a magic success story, they neglect the one power binary options provides them with – the power to develop a working strategy and turn a profit each week.
If you manage to make a few percent each week, the force of compound interest will accumulate you a lot of money within a year. Where other investment types limit you to a profit of 10 percent each year, if you manage to earn 10 percent a month with binary options, you will have made a profit of 314 percent within a year – that is a lot.
If you fall for the promise of making thousands of dollars within a few days, however, you will invest too risky and probably lose all your money.
How to find a realistic way to success
To become successful, we recommend that you start with a demo account, trading play money instead of real money. In this risk-free environment, you can test different strategies and find the one that works best for you.
Once you have developed a way of turning a profit by the end of the month, you can switch to real money trading – but not earlier. This approach might not be as sexy as the promise of becoming rich overnight, but at least it is realistic and completely risk-free. Even if you should find that you have the talent to make a fortune within a week, you will still be able to switch to real money trading.
To find a good demo account, take a look at our top list of the best binary options demos available, where you can find free demos with respectable binary options brokers.