We have all heard these ‘binary option millionaires stories’: someone started trading binary options a week ago, and now they are a millionaire. But are these stories true? And if so, can you repeat them? Let’s take a close look at what you can expect when you start trading binary options.
In this article, you will learn:
- Why The ‘Get Rich Quick’ And ‘Millionaire’ Stories Are A Myth,
- Why Binaries Remain A Sound Investment Vehicle
- How To Achieve Long Term Success.
With this knowledge, you will be able to start trading binary options with realistic expectations and achieve long-term success.
Millionaire Myths: Get Rich Over Night
Stories of people who got rich with binary options are generally intended to mislead, and stories of those who got rich overnight are of little help to new traders. We recommend ignoring them because they all fall into two categories: lies and luck. Let’s look at both types a little closer.
Type 1: Lies
As with any advertising statement, some get-rich-quick stories are just lies. Untrustworthy brokers made them up to attract gullible traders. Likewise, marketers will create these millionaires to encourage them to join the immoral brokers.
Brokers that use such tactics are not to be trusted. If they lie about the success of their customers, they probably lie about other aspects of their business, too, including such essential aspects as payouts and available assets.
Of course, it is difficult to tell for newcomers to the binary options world whether you can trust a broker’s stories. Our pages on how to avoid scams highlights the tactics used. There are enough genuine, honest brokers around, so that traders can walk away from a firm should they have any doubts whatsoever.
Type 2: Luck
Some great success stories are the result of sheer coincidence. Simply put, when enough people do a thing, all outcomes will happen – including great luck.
Assume a coin flip tournament with 1,000 starters. After the first flip, there will be 500 players left, after the second flip 250, after the third flip 125, and so on. Soon, there will be only one person left.
Now, if this person has bet all their money on every flip, they will be incredibly rich. The coin flip provider will use them as a poster child to market the quick and easy money you can make by flipping coins. Their success, however, is neither a result of a great investment tool nor their genius nor of a great strategy.
Millionaire Success Stories
Their success is merely a consequence of the odds: when enough people do something, someone will have incredible luck. Some people have survived 13 plane crashes or a fall from a skyscraper. But does that mean that you should try to repeat their actions? Hardly.
If you tried the same strategy, you would fail. There is a fifty-fifty chance that betting all your money on every single coin flip would ruin you with your first trade. If you get lucky and win the flip, you would face the same odds again. Even if you are a lucky enough to win ten flips in a row, the 11th flip would likely ruin you.
The same applies to binary options. People who make a lot of money in a short period used an unsustainable strategy and got incredibly lucky.
Broker Tactics
There is a rumour that some brokers use this knowledge to their advantage. They give many of their employees £10 to start trading and require them to invest everything on every trade. Most of their traders will lose this money, which means that the broker gets it back. Sooner or later, however, one employee will be lucky enough to win enough trades in a row to become a millionaire.
The broker can use them as the poster child for their next advertising campaign. On the other hand, brokers do not really need to use such questionable methods. Once they have enough customers, one of them is bound to create such a story.
The point is: people who got rich overnight with binary options failed to use a strategy that could generate long-term success. While they got incredibly lucky, you would be foolish to bet your money on the same one-in-a-million chance.
Luckily, there is a better option available.
Using Binaries Long Term
Let’s be honest: if there were an investment tool that would turn out millionaires overnight, everyone would use it. As we have explained, these millionaire traders are generally nothing more than a marketing scam.
That, however, does not mean that binary options are a bad way of investing. Just like stocks will not make you rich in the blink of an eye, nor will binaries. But a solid long-term strategy can nonetheless create great profits.
The main ingredient of long-term trading success is a trading strategy. With the right strategy, you can successfully trade many types of assets. The great advantage of binary options is that they offer more profitable investment tools than any other type of asset.
If you want to get rich with binary options, you can. But it will not happen overnight. What you need is a solid strategy, long-term commitment, and the right knowledge. Let’s look at all three of these aspects.
Binary options success factor #1: A solid strategy
To successfully trade financial investments, you need a good strategy. Random investments will quickly ruin you. A strategy defines when you invest, how you invest, and how much you invest. It also contains a plan to monitor your success and keep improving.
One of the most important points of a successful strategy is that you invest a small percentage of your overall account balance in every trade. When you invest between two and five percent in every trade, you survive losing streaks and gradually grow your capital.
Traders who became rich quickly lacked a good strategy because they necessarily invested more than a few percent of their money in every trade. When you invest half of your money in every trade, you have a small chance to get rich quickly, but the infinitely more likely outcome is a failure.
Even the best binary options traders only win around 70 percent of their trades. That is easily enough to make money – just like winning 70 percent of all coin flips would be enough. However, when you are unable to guarantee that you will win every single trade – and nobody can guarantee that with any kind of financial investment – you have to plan for losses. Sometimes, you will lose three or five trades in a row; sometimes, you might lose ten trades with only a few winning trades in between.
If you bet too much on a single trade, you will soon end up bankrupt. This is why a get-rich-quick scheme is a bad strategy, and why you should invest for the long-term.
This website provides a wealth of information about trading strategies and the right approach to the market. Use it, and you will enjoy long-term success instead of quick failure.
Binary options success factor #2: Long-term commitment
Learning a new skill takes time. Trading binary options is the same. There is a lot you have to learn about the different binary options types, your own personality, and the market itself. In a world where financial advice is freely given but rarely well-thought-out, you have to learn how to separate trustworthy sources from those that only want your money.
All of this takes time, effort, and commitment. Nobody learned to speak overnight, and learning to trade takes just as long.
Of course, talent is an issue, too. On the other hand, binary options offer so many different trading styles – from mathematical to pattern recognition, from very safe to highly risk – that almost all traders should find a style that matches their talent. Once again, this site and our strategy guides can help you with this job.
The rest is up to you. Invest the time and the effort, and there is a good chance that you will see great results. Because most traders offer demo accounts that allow you to trade completely risk-free, you have nothing to lose.
Keeping a trading diary can help you with this job. Write down why you made a trade, which tools you used, and which environment you were in. Monitor your success over time and find the things that work well for you. Eliminate everything else.
Binary options success factor #3: The right knowledge
Maybe the most important aspect of binary options success is the right knowledge. We have mentioned this point a few times, but we can’t stress it enough. Find a trustworthy source of knowledge and never stop learning.
With this site, you have made the most important step along the way. Come back, read our articles, and try the strategies we recommend. You will soon find the trading style that is right for you.
Conclusion
Like any type of work, becoming a successful binary options trader requires hard work. While it is possible to get rich overnight, good strategies focus on long-term success. Get-rich-quick schemes work for one in a thousand traders; the rest will end up broke. Ignore these stories and focus on the one thing that can bring you success: hard work.
Here’s what you do:
- Learn from the right sources.
- Apply your knowledge with a risk-free demo account.
- Once you know how to make money, switch to real-money trading.
- Keep improving.
Follow this approach, and you will be better off than chasing impossible promises.