Binary Options - Info you need to know

Binary Options - What you need to know to be successful is not really a secret or something, but it is often overlooked because trading binary options is really easily accessible to most people because of the low entry minimum deposits and a rather simple concept of deciding whether a currency is going to go up or down in a specified amount of time.

Sounds so easy, doesn't it?

However, I can honestly tell you that trading binary options profitably is not easy. Seriously.

The maths is stacked up against you to start with and to be successful you will need to have a consistent winning percentage of 58% or better to make decent money. That is basically winning almost 6 out of every 10 trades forever.

Now it can be done, as I explain below, but as a newbie trader you are probably not going to be winning 6 out of every 10 trades to start with. Even experienced traders battle to keep up that consistency. Honestly.

I would suggest that if you want to make trading your career that you rather spend the time and effort of learning to trade spot forex and other assets from proven professional traders and educators or proven systems.. Please visit this page to read more about that.

However, that is not to say that trading binary options can not be profitable.

What you need to know is the little secret to trading binary options profitably and successfully that nobody seems to mention.

Well it is not so much a secret as it is in understanding the maths behind it all.

Once you have a solid  understanding of the maths involved and then follow on through with implementing the maths and strategy that I will lay out for you, then trading binary options profitably is within anybody's reach. Seriously.

So, the Secret to Binary Options Success is..................the following formula:


Profit = Trades x $ Amount  x { ( Success x Payback) - (1 - Success ) }

Where:

Profit  is exactly as it says, the profit you make. We will take it as profit after 1 month of trading.

Trades is the number of trades taken for that month.

$ Amount  is the amount in dollars/Euros or GBPs invested per trade. We will use $20 per trade in our example.

Success is how many trades we won as a percentage of all trades taken.

Payback is the amount the broker paid back for a winning trade as a percentage. We will use 80% as that is the average payback with the brokers that I recommend.

Example:

Let us say that you are an average Joe, trading binary options  and you have deposited $400 into your trading account and are going to be taking $20 trades and you average 10 trades a day.

So, 20 trading days a month x 10 trades a day = 200 trades a month.

So, in a month there were 200 trades taken, with a winning success rate or In The Money (ITM) of 60%.

The broker payback is 80% and you have used $20 trades.

Therefore, going back to our formula:

Profit = Trades x $ Amount  x { ( Success x Payback) - (1 - Success ) }

Profit  = 200 x $20 x {(60% x 80%) - (100% - 60%)}
Profit  = 200 x $20 x {(0,60 x 0,80) - (1,00 - 0,60)}   work it out in decimals
Profit  = 4000 x { ( 0.48) - (0.4) }
Profit  = 4000 x 0.08

Profit  = $ 320

So after one month of trading 10 trades a day and assuming that you got a success rate of 60% ITM with a broker paying out 80%, you will have made $320 profit on your $400 investment.

Now that is actually a spectacular return. Your Return On Investment (ROI) is 80%

So, what is the problem?

Well, the calculation assumes that you are getting 60% In The Money (ITM) over 200 trades.

Now, there is a fine line between success and failure with regards to your ITM percentage.

With a broker that pays out  80% on a trade, you will need a constant and continual ITM winning percentage of a minimum of 56% ITM winning trades to just not be losing and making a slight profit and 58% and better to start making good money.

Let us take a look at our calculation again, but this time with 56% ITM and 55% ITM.

With 56% and the same amounts as our first calculation.

Profit = Trades x $ Amount  x { ( Success x Payback) - (1 - Success ) }

Profit  = 200 x $20 x {(56% x 80%) - (100% - 56%)}
Profit  = 200 x $20 x {(0,56 x 0,80) - (1,00 - 0,56)}   work it out in decimals
Profit  = 4000 x { ( 0.448) - (0.44) }
Profit  = 4000 x 0.008

Profit  = $ 32

Now with 55% and the same amounts as our first calculation.

Profit = Trades x $ Amount  x { ( Success x Payback) - (1 - Success ) }

Profit  = 200 x $20 x {(55% x 80%) - (100% - 55%)}
Profit  = 200 x $20 x {(0,55 x 0,80) - (1,00 - 0,55)}   work it out in decimals
Profit  = 4000 x { ( 0.44) - (0.45) }
Profit  = 4000 x -0.01

Profit  = - $40 yes, that is minus $40

So, as you can see with a 56% ITM and 200 trades at $20 per trade, you made a grand total of $32.

With a 55% ITM and 200 trades at $20 per trade, you actually lost $40.

Now, I know for a fact that most traders who contact me are in the 45- 57% ITM range on average. Yes, many have some weeks when they are killing it and doing really high ITM results but over the long haul most end up with the 45-57% ITM average and that is how they end up blowing out their accounts or not really making any money to talk about. 

Even if they are getting good ITM results, usually  they are not getting in enough trades over the course of the month to make it really worthwhile or they are trading to small an amount.

The  good traders are doing around 58-61% ITM and the really good traders are doing from 62% ITM to around 66%. Really those are the numbers. You might see a month when they getting around 70% but it is not the norm to be honest.

So, how do you come out ahead?

Well you need to have a consistent ITM of about 58% and throw as many trades at it as you can or you need to use some clever Money Management as I explain here.

Think like how the big casinos make their money. They in general only have an advantage of 1- 2% over table games but make millions and  even billions per year. 

They do it by playing thousands and thousands of hands 24/7 and over the long haul the statistics play out.

This is what we want to be doing as much as possible and within reason of course.

Let us say that you had 58% ITM and 1000 (one thousand trades) for the month and still $20 per trade:

Profit = Trades x $ Amount  x { ( Success x Payback) - (1 - Success ) }

Profit  = 1000 x $20 x {(58% x 80%) - (100% - 58%)}
Profit  = 100 x $20 x {(0,58 x 0,80) - (1,00 - 0,58)}   work it out in decimals
Profit  = 20 000 x { ( 0.464) - (0.42) }
Profit  = 20 000 x 0.044

Profit  = $ 880

Well, ok that is looking better.

How about we start doing $25 trades?

Profit = Trades x $ Amount  x { ( Success x Payback) - (1 - Success ) }

Profit  = 1000 x $25 x {(58% x 80%) - (100% - 58%)}
Profit  = 100 x $25 x {(0,58 x 0,80) - (1,00 - 0,58)}   work it out in decimals
Profit  = 25 000 x { ( 0.464) - (0.42) }
Profit  = 25 000 x 0.044

Profit  = $ 1 100

Just a $5 increase in stakes and our profit went up by $220 for the month.

So that is all great, but I certainly don't have the time nor the skill for 58% ITM and 1000 trades a month, so how do we do it you may ask?

Well, the secret to success is to first get my  Indicators and practice with them and when you start getting an ITM winning percentage of around the 60% mark go live and then throw as many trades at it as you can and while you are doing that get somebody else doing some extra trades for you to up the numbers.

There is one sure-fire way to do this:

== >> Use my binary options trade copying service