You must have already understood that Binary options trading are one of the simplest financial products for the investors. Over the recent years, this trade has grown multiple folds regarding popularity across the globe. This increased popularity may be attributed to the ease of understanding and carrying out the business. This form of trade is appealing to many traders because of its high payouts. Moreover, the traders are not required to wait for a long time for earning the profit. With most of the reputed online binary options trading platforms, investors get high payouts between 70 and 90 percent. It specifically depends on the type of asset they are trading for. A majority of investors prefer shorter expiry period for the positions they open on the binary options platform. It increases possibility for the traders to profit from their open trades minutes. The prime idea behind trading binary options is not the hold-and-buy-an-investment. Traders acquire a certain percentage of their invested amounts as profit, if their prediction comes out to be right at the time of expiry of their open positions.
Become a Millionaire with Binary Options
Traders currently investing in the binary market and aspiring to trade in binary options are often motivated because of the earning potential presented by this trade. A majority of the professional binary traders believe in making a fortune expecting constant profits while trading on various widely available online binary options trading platforms. Many traders in binary options trading industry plan to multiply their existing wealth and retire early. On the contrary, it is quite possible to make millions through binary options trading. The principal reason is the presence of numerous online binary options forums and websites providing tips that includes discussions on how to make millions. They understand that it is a treat that is difficult to refuse. While many traders dream of building millions through various online binary options trading platforms, one must be still wondering the probability of such odds and the techniques to achieve it. To ascertain the reality of such a target in the binary options trading world, the trader first needs to properly apprehend the actual working of binary trading.
According to numerous research studies over the past eighty-five years, it is almost impossible to find a return of over 20% in a long-term investment in the stock market. Therefore, to place them in a better position to earn a million, it is more than necessary to judge the odds of such an outcome while trading binary options.
Is it Possible to Become a Binary Options Millionaire?
The question on whether a trader can become a millionaire by trading binary options is one of the controversial questions that dominate marketplace discussions on online forums and review sites. When you consider the fact that people like George Soros and Warren Buffett made their fortunes almost entirely from trading financial instruments, then the answer to this question is theoretically “Yes”. I say theoretically because while it is possible on paper to become a binary options millionaire, the practicality of it is something that many traders will find hard to achieve. Building wealth from binary options trading, or indeed, any form of trading for that matter is not a day’s job. It takes patience, time and a well-structured plan over a number of years to achieve this.
Binary Millionaire – 5 Year Investment Plan (taken from binaryoptionsmalaysia.com)
|Starting Balance||Return per Month (%)||Month||Account Balance||Monthly Profit|
|Year 1||12th Month||$5,350.25||$697.86|
|Year 2||24th Month||$28,625.18||$3,733.72|
|Year 3||36th Month||$153,151.85||$19,976.33|
|Year 4||48th Month||$819,400.71||$106,878.35|
|Year 5||60th Month||$4,383,998.75||$571,825.92|
These figures are truly amazing, from a profit in the first month of $150 to a profit of over $100,000 per week after 5 years, this plan highlights the massive benefits of compounding returns. You will be able to modify the initial investment amount and also your proposed rate of return to see how long it will take you to meet or exceed your financial goals. You might want to be more aggressive with your returns or more conservative or increase or decrease your initial investment amount.
This plan requires a lot of patience and a huge amount of discipline, but as you can see the rewards are simply outstanding if you get it right. So why aren’t more traders millionaires? Well, most do not have either the patience or discipline. If they have a good and profitable month they want to withdraw their profits and take an overseas holiday, buy an expensive car, a nice watch or a boat – they want instant fulfilment. If they have a bad run of losses they then either chase their losses looking for bigger returns or stop trading altogether. Don’t fall for these traps that catch most traders. Stick to your plan.
Things you must focus on to Become a Binary Options Millionaire
Expand Your Profit Potentials
Unless Binary traders do something outside of day trading–such as investing some of the proceeds (fewer market ceilings with investing) or starting a business–they are unlikely to make the millions a year they are dreaming of. For most day traders making $500 to $3,000 is a good day….that seems to be the ceiling for most traders I know. Some days are higher and some days are lower. Factor in some losing days too and making $50,000 to $200,000 per year day trading is a more reasonable expectation..if you’re good. Save some of that and eventually having more than a million dollars in assets is a possibility.
To come up with different ways of making profits constantly while trading in binary options, it is very essential to understand the concept of mathematical compounding applied in this form of trade. Any trading strategy in the binary options market may apply compounding. However, the concept is not as difficult as it may sound to the newcomers. The principal purpose is to build gradually on the trader’s returns while trading binary options. In addition to subsequent returns, the traders are required to use their original stake that they initially placed, while opening the subsequent trade. For example, an investor having an account balance of $2000 uses five percent of the account balance to open a position, which is $100. The payout is 70 percent on the binary options trading platform he is using. Assuming that the prediction of the investor on this trade is precise, the trader would get $170 after the deal. In this situation, $100 is the initial stake, and $70 is the profit he made from the trade. According to the concept of compounding returns, it requires the trader to wager this entire amount for the next trade. Therefore, the next amount of investment will be $170. If he wins the subsequent deal, he will earn $289. One can see the simplicity in gradually making money provided a series of right predictions is made in the market. This approach to trading is also called as creating a ‘snowball effect’ because as the snowball rolls down the hill, it gets bigger. The principle of financial compounding is quite popular in the market owing to the accelerated rate at which traders can earn returns while trading binary options. When compared to the other available betting strategies applied in the binary options trading world, the strategy of compounding returns is found to be highly appealing to the bulk of traders. The reason behind such an ideology is that the only overall risk is the initial wager and then subsequent profits. The trader is just risking the initial amount placed on a stake, which is $100 in the above-mentioned instance. This concept of the world of binary options trading allows investors to magnify their profits, limiting their risk to their initial stake value. Traders do not comprehend the power of compounding returns which when applied to longer time frames, can make the total return grow exponentially.
The Random Factor
Earning a profit worth million dollars while trading in binary options is quite possible in theory, but traders need strategies much better and more than the compounding returns concept. This concept will help the traders multiply their profits significantly, but at the same time, it is also important to judge the probability of winning in interim positions that they are opening. The trader needs to understand that the prices in the market move quite randomly over time. Mathematically, there is 50:50 probability of winning any trade opened in the binary options market. Traders in this industry have equal chances of making the correct prediction about the direction of the price of any asset within a certain period. They should consider the assumption that the strategy and statistical analysis does not alter the probability.
Before investing, the traders should know the purpose and the approximate time in the future after which they may need the funds. If the need lies within a few years, considering another investment is a better idea. The stock market provides no certainty of availability of the required fund in such a short span. Tolerance to risk is a psychological trait that is genetically controlled but influenced by education, wealth, income, and age. The extent of tolerance can be judged by the degree of anxiety one experiences in risky situations. In binary options trading, the question is whether one would risk $100 to win $1,000 or $1,000 to win $1,000. The idea of one’s perception of risk is important too, especially in investing. During periods of financial uncertainty, a cool-headed investor can follow an analytical decision processing more efficiently irrespective of future outcomes. Spending restless nights and pushing against situations would lessen the odds of winning in the long run. It has to be made sure that the traders understand the definitions of metrics involved in trading, such as compound annual growth rate (CAGR), return on equity (ROE), the P/E ratio and earnings per share (EPS). Their calculation and assessment of different companies based on these metrics are critical. Understanding and differentiating “fundamental” and “technical” analyses are important. A popular way of minimizing risk is by diversification. Successful investors own stocks of different companies in a wide range of industries and often in different countries. The expectation of a single losing event does not affect their overall holdings, therefore, decreasing the odds of greater loss. To survive in the long race, taking leverages must be avoided in the initial phase. It might work well once you gain experience. Day trading can be beneficial, but risky practice with successful traders often make millions of dollars a year. It involves buying and selling of stocks while closing and opening all positions within a single day. Day traders work to take advantage of price fluctuations throughout a trading session by buying stocks at lower prices and selling them at relatively higher prices. It is entirely speculative, less based on fundamental analysis.
10 Personality Traits you must have:
1. Follow the money as far as it goes!
2. Don’t show off —always show up!
3. Save to invest, don’t save to save.
4. Avoid debt that doesn’t pay you.
5. Treat money like a jealous lover.
6. Money doesn’t sleep, so you should be awake as long as possible.
7. Poor makes no sense, become rich!
8. Get a millionaire mentor for you
9. Get your money to do the heavy lifting jobs for you!
10. Shoot for $10 million, not $1 million.
The Bottom line
Making a profit worth a million dollars is not easy. There is a need for changes in perception and expectations on the part of the binary options traders. Rather than focussing on your goal of betting your way to a million dollar profit, it is advisable to come up with a well-structured trading agenda through learning and keen formulations. Additionally, make use of tips and ideas shared by experts of the industry to apply an efficient and effective money management strategy. The planning involves a lot of patience and a great amount of discipline, but the rewards are simply outstanding if the trader gets it right. Most of the traders do not have either the patience or the fine discipline to carry out a successful business. If they have had a profitable month, they would prefer to withdraw their profits and buy an expensive car or a nice watch. Instant fulfilment drives them off their goals. If they had a bad run of losses, they will either keep on chasing their losses in search of bigger returns or stop trading altogether. The traders should to their plan and should not fall in these traps that catch most of the investors out there.