OK, so in the past few articles we’ve explained what Binary Options are and the pros and cons. The pros obviously being that you can make a lot of money, and the cons being that you can also lose quite a bit if you’re not careful and don’t do your homework.
Now, we can all agree that the single most important aspect of trading binary options is choosing the right binary options broker. However, after that, it’s all up to you as to whether you gain profits or suffer losses.
However, there are two options for newcomers to have what we call a “soft landing” into binary options, minimizing the risk to suffer losses while still learning what needs to be done in order to be a successful trader.
The first of course is do get a binary options demo account and do some paper trading. While this nullifies your risk of losing money, it has its limitations as to what you can actually learn from this process, as you don’t have anyone guiding you on how to trade and what to do.
Another option is to subscribe to a binary options signals provider.
These providers are usually very experienced full-time traders who offer the service of giving their subscribers entry and exit points to very specific trades.
Think of it as if a professional trader is holding your hand and telling you exactly what binary options to buy, at what strike price, and for how long.
The obvious benefit of this is that you get to learn how a professional trades and to benefit from his picks. Very often they will also explain the logic behind these picks, and this will help you eventually also develop your own binary options strategy without losing money making rookie mistakes.
In the near future, we will also be performing a number of reviews on signals providers, with the hopes of finding some reasonable ones that we can recommend to you.
So what should we look for in a binary options signals provider?
Consistent winning average – No one has a 100% winning record. Anyone who says he does is flat out lying. Even the best stock market traders are not embarrassed to admit when they lose money. It’s all part of the game. However, the trick is to have a record where your profits are significantly higher than your losses. This is an average game and should not be judged on a mere 1 or 2 trades.
Trial period – Any good Binary Options signals provider that it confident with his product, will offer a trial period, as he is confident that the value he provides will justify continuing the subscription once the trial is over. While the trial may not be free, it will be significantly cheaper than the real product. Make use of this trial to assess the winning average without actually investing any money. This is key, as you don’t want to invest money on signals before you verify that the provider has a good winning record.
Feedback – A good signals provider is one that listens to his subscribers. If you shoot him an email and get a coherent, friendly response, that’s a clear sign of someone who cares. It also creates a bit of a personal relationship and will be one of the key factors that will help you learn and build your own binary options trading strategy.
Price - While this is a factor, it may not necessarily be as important as it seems. Because we are talking about Binary Options, which can be highly profitable, the extent of the subscription cost depends on how much you are investing into the actual trades and what kind of return on investment (ROI) you can get. Remember that if you subscribe to a cheap $10 signals provider who gives you bum signals, you’ll end up losing much more than those $10 on the actual trades. Investing $100 a month on a good provider who will end up making you thousands a month, may not be such a bad idea, provided that they really do provide good signals.