Your first, official step into the world of binary options trading can be quite daunting.
It is easy to feel ill-equipped and unsure of your decisions. You also have to contend with a surge of adrenaline and other distracting feelings as well. This is perfectly normal and to be expected. However, if you do want to get control of the situation, there are some things you need to consider before you first binary options trade. It will help you to make a more informed decision and hopefully, a more successful trade.
The Trade Type
Ideally, you want to be as cautious as possible with your first trade. After all, you are testing the waters and don’t have a lot of experience to draw from. The trade type with the least amount of risk is the Call/Put or High/Low option. This is because it simply a matter of determining if the price will be rising or decreasing with a set period of time.
While it does offer simplicity, more adventurous traders feel that it doesn’t offer much incentive as the payout rates tend to be lower. Of course, the other trade types may provide higher payout percentages but you also have to deal with an increased amount of risk. In the end, you will need to decide whether security or profit is more important to you.
The Trade Time
The other point that you will have to contemplate is what expiry time you are going to decide upon. Again, first time traders tend to either opt for the fastest trade possible so that they can get it over with or choose a longer trade time to hedge their bets. Choosing an expiry time that is quite short increases the chance that you will be wrong.
Also, the more time that passes, the more difficult it can be to decide the direction of the price movement. To negate both of these disadvantages, it is a good idea to choose a trade that will last several minutes or about an hour. It will also help to provide you with some idea of how much patience you have with trades.
The Market Situation
The market situation can often change with very little notice. Therefore, even if you do have your finger on the pulse, you may be surprised to all of the movements that have taken place since you last took stock. Usually, unless there has been news of a major event or decision, you shouldn’t expect there to be too much upheaval.
Still, it will be worth it consider any and all factors that may affect the asset you are placing a trade with. This is particularly important if you are dealing with commodities as they tend to experience the greatest amount of volatility. This bit of recon will really help to increase the odds about you being right about the direction of the price movement of your asset.
Don’t Place All Your Hopes on Your First Trade
There is a good chance that your first trade ends up out of the money and that you lose your investment. This is something that you will need to prepare for from the very beginning. However, you shouldn’t despair over this outcome. It is a process to become a good trader and you should consider your first trade as an important learning experience. It will help you to determine what to do or what not to do the next time around.
Also, think of your first trade as a way to get your jitters out of the way. Then, you will be able to focus on the numbers and the statistics.
This is what you need to consider before you first binary options trade. Most vital of all, is to enjoy the experience!