It is quite easy to succeed at trade in digital options. So while having a gut instinct for trade may be agreeable to intuitive types, this lack of method may, in the end, lead to overall losses. To ensure profits, a trader will ideally develop a method that increases chances of success.
Typical mistakes when trading with digital options:
Lack of purpose:
Many traders start taking trades due to emotions or even boredom. Alternatively, some new traders let frustration over losses cause them to quit early on. Every trade must have a defined purpose or goal logically guiding it.
Taking large trades:
It is important to remember even seasoned traders have losses. One trade should not be large enough to affect your finances in such a way that you will not be able to take on future opportunities. No single trade should be larger than 5% of your account balance.
Refusing to learn from past mistakes:
Every mistake or lesson learned should actively influence all future trades.
Avoiding these pitfalls is critical to profitable trading. To consistently get success, you will ideally have a planned method to guide your trading decisions.
Top 5 Starting Methods
Below are the top 5 digital options starting methods to creating a winning formula in South Africa:
1. Choose the right broker
This step is more important than most traders realise. Working with a reputable broker who has a variety of great assets to trade will help you make the right trading decisions. Further, working with a duly licensed and registered broker will decrease the chances of you getting conned. IQ Option has developed a streamlined interface to assist even newbies in digital options trade. Using our demo account will let you build up skills and experience.
2. Learn the technical indicators
This involves using pricing charts as a means of predicting the future performance of an asset. The most well-known indicators are MACD, Bollinger bands, and the relative strength index. Finding an indicator that works well with your trading style may take a little trial and error, but will give you the competitive edge required to make profitable trades.
3. Track performance
It is important to keep track of how each option you trade in performs. This will help you discover which asset type you work better with, whether stocks, commodities or currency pairs.
4. Learn stock trading
Getting involved in stock trading before dipping your toe in digital options can be an excellent way of learning the market. However, stick to securities valued below USD$5 – or 60 Rand – during this period to minimise your losses.
5. Purchase the winning opting time period
Determining what this right length depends on your particular trading style. Some work better with shorter trading periods than longer ones, and vice versa.
* Amount to be credited to account for a successful trade.