Learning to trade binary options will be a whole lot easier if you have access to a fully functioning demo account. Unfortunately due to the fact that most binary options brokers are fairly small, you’ll find binary options demo accounts are hard to come by. And since a typical binary options trade is going to cost you around $25 it could prove to be a very expensive learning curve.
There is one broker however that’s bitten the bullet and started offering a full binary options demo account which comes complete with a virtual $500.
This is ideal since that’s the amount I recommend most users start trading with. Click here to find out more about Canuck Method is one of the brokers that offers a fully functioning demo platform that isn’t time limited. There are couple more of them, but the majority of them give available demo account for two weeks, which isn’t really long enough for a full evaluation.
It would be tempting to just recklessly blow your money on a few trades just to see how they perform; it’s not your money after all. But this would be a waste of time and you’ll likely end up being disappointed. It’s a much better idea to start as you mean to go on, so let’s start by implementing a few money management rules.
First of all don’t risk more than 5% of your available capital, which means you shouldn’t trade more than $25 at a time. That is until you get to $600 in which case you can increase your stake to $30, oh and the same applies if you drop to $400, your maximum trade should be no more than $20. Got it? Good.
Now you’ve got some basic money management in place you can start to trade, but whatever you do please don’t start guessing. The best money management in the world is not going to save you if you put your financial future in the hands of the Gods.
What you need is a strategy, take a look at this strategy. This is a very simple strategy and it won’t make you rich, but it will give you a thorough understanding of how the markets work. Don’t expect this or any other strategy to make you rich overnight, the goal of all strategies is to make a profit in the long term.
This is a simple question to answer, when you can consistently make a profit from your demo account. This could take anywhere from one month to a year depending on your results and trading experience and even then you’re not home and dry.
A mistake I see time and again with beginners is them thinking that trading with real money will all of a sudden make an unprofitable strategy profitable. Unfortunately the opposite is true. You can have a sound strategy that made handsome profits while trading in demo, but when transferred to a live account those profits fail to materialize.
Why would that be? Well it’s because trading with real money adds an element of stress that no demo account can replicate. Overcoming those trading demons is the last hurdle you have to cross on your path to financial freedom. Some people never overcome them but with time and a little practice you can learn to master them.Then you can consider yourself a trading God, until then you have a lot of work to do