5 Reasons Your Binary Trading Is Failing

Binary options trading can either be an entertaining hobby or a profitable income generator, depending on your approach. Either way, there are things you can do to improve your chances of success. There are also mistakes that can cost you money. Not sure why you keep losing? Here are 5 common mistakes which beginning binary options traders make. These mistakes will almost always cost you money.

1. Trading without a method

This is actually a guarantee of losses over time, even if you get lucky in the beginning. A trading method or system is a set of rules which help you figure out when to enter into trades, how to set expiry times (if applicable), and when to close positions early or roll over. If you make these decisions purely based on intuition, you aren’t going to take the edge off your risk. Trading always involves luck, but a trading method helps bring order to chaos and reduce randomness. Trading without a method is like setting sail without a compass.

2. Trading without money management rules

How much do you invest on each of your trades? Do you always invest the same amount, or do you sometimes invest extra if you think a trade looks really great? Do you invest 5%? 10%? 20% or more? You might think that you need to learn how to risk it big on the trades that look the best in order to succeed, but nothing could be further from the truth. Successful traders are those who know how to trade consistent amounts of money, and keep their trade percentages small. 2.5% of your total trading bankroll on every trade is a good rule to use.

3. Trading emotionally

You will never be able to remove emotion 100% from trading, but you do want to minimize the effect it has on your decisions. Trading based on fear, anger, or even excitement can cause you to lose money by making decisions which are not based on logic and discipline. If your emotions cause you to break your trading rules, then you need to find a way to regulate your emotions when you trade.

4. Ignoring context

This is such a common error that even advanced traders can make it. Are you taking only the very best trade set ups, or are you compromising on some of the details? Are you taking trades which aren’t positioned well in terms of support or resistance, or trades during choppy market conditions? What about trading during news events or over weekends when your trading method tells you to avoid those times and days?

5. No discipline or accountability

Self-discipline is probably the number one most important quality a binary options trader can possess. Discipline keeps you honest, and it helps you make the right decisions even when you feel like violating your rules. It enables you to set a schedule and maintain balance in your trading life. Accountability can help with discipline, but many people aren’t accountable to anyone—not even to themselves. If you don’t answer to someone for your mistakes, how can you expect to improve? If you can’t do this on your own, it’s a great idea to get someone else to be your accountability partner.


By correcting these five problems, you should find yourself in a far better position for success. Any one of these mistakes can destroy your trading. A combination is even worse. Start with developing self discipline, and then work on improving the other aspects of your trading. Go back to demo testing or even backtesting if you have to. There’s nothing wrong with taking a break if it makes you more successful in the long run!

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