Can A Beginner Make Money With Binary Options?

binary options make money
Binary options trading is often done by beginners, but can a beginner really make money doing it? The easy answer that many want to hear, of course, is that sure they can.

But wait! First we have to see if binary option trading is legal in your country.

Binary options trading is not available in all countries. Check the table below for alternatives.

Binary Options Trading in your Country

Depending on your country, here are the brokers available to you in December, 2020:

Country
Binary Options Available?
Broker Info Best Broker
YES
Regulated US Binary Broker
Nadex (visit site)
YES
For Most African/Asian traders
IQ Option (visit site)
YES
Regulated AU Binary Broker
HighLow (visit site)
NO
Alternative: trade stocks, indices, currencies.
eToro (visit site)

eToro Disclaimer: 75% of retail CFD accounts lose money.

 

NO
Alternative: Trade Forex and more.
Forex.com (visit site)

*Other countries: Binary options is still available to most non-EU/US/AU/CA traders however there may be some exceptions.

  • EU Traders are banned from binary options trading. The best alternative is eToro.
  • US Traders should go to our US Welcome Brokers page.
  • Australian Traders have a great choice available: Highlow.
  • All other traders (if you are not from the US, EU and AU) can sign up with IQ Option.

Beginners think that all a trader needs to do is go on one hot streak!

New traders often say to themselves: “just ten wins in a row and all of a sudden I will be a new trading mogul”. People looking for quick money think, that they can quit while they are ahead on a hot streak and go home richer than they could possibly imagine.

The truth is that you need a strategy and discipline to make successful trades on the long term. You should start by picking a legit broker first.

If you are just starting out with trading, then this is the perfect guide for you to start making money with binary options trading.

Here is our #1 Rated Broker

IQ Option – Best Trading Platform

IQ Option is a trading platfrom that is regulated by CYSEC. It is the best trading binary options broker on our website. It’s a perfect pick for new traders.

  • Trusted CYSEC Regulated Broker
  • Minimum Deposit: $10 (Lowest In The Industry)
  • Free Demo Account

OPEN DEMO ACCOUNT

How To Get Started With Binary Options Trading

Unfortunately binary options trading was banned in most countries but there are many more assets that you can trade: stocks, commodities, bitcoin, indices and more. There are many safe and regulated brokers.

You can start with a trading signals provider, especially if you are a beginner. FX Atom Pro looks really promissing.

  1. Step1: Sign up with 24Option
  2. Step2: Make a first deposit
  3. Step3: Start trading using trading signals

Alternatively you can choose a reliable broker like IQ Option that offers free demo accounts.
IQ Option is the most trusted trading platform at the moment. They are regulated by CYSEC and they have a stellar reputation in the industry. The minimum deposit is only $10 which is perfect for beginners.

Forex Trading – The Best Alternative To Binary Trading

Binary options trading may be too risky for you. Or maybe you heard too many horror stories about binary trading? We recommend you to try out Forex trading instead.

Forex brokers offer CFD and even Cryptocurrency trading. Most Forex brokers are regulated and have been around for many years. Here is the best Forex brokers:

Rank Broker Min. Deposit Regulated Features Review
1
review $100 YES + CRYPTO TRADING
TRADE NOW
2
review $200 YES + ASIC LICENSE
TRADE NOW
3
review $200 YES + COPY TRADING
TRADE NOW

eToro Disclaimer: 75% of retail CFD accounts lose money.

 

Common Mistakes of Beginners- And How To Fix Them

When a beginner goes in unprepared trading binary options, the broker will feast on them. New traders often make mistakes such as taking way to big a position for one trade, taking a bad loss, and then staying way to small the next 5 times.

They may even experience winning easily on small trades, but they never make back the big loss. New traders take way too many trades, let emotions control their trading, and don’t have the self control to stay out of low percentage trades that they know have small chance of making them money.

make money binary options

After knowing all the pitfalls, why would a new trader ever decide to open a binary options account and become a trader? Well, they do it because they have the power to win systematically if they have some intelligence and a plan on their side.

A new trader needs to understand the most common pitfalls, otherwise they may not even know that they are making a mistake while they do it! With that in mind, here are the most common mistakes new traders make, with what they should do instead.

  1. Not taking every trade with a purpose. Beginners often find themselves taking trades based on a feeling, or out of boredom. This is a surefire way to make a broker rich. Never enter into a trade without a defined thesis as to why you are doing it. Think the trade over rationally before entering. Is your thesis really valid? Is it strong? What do you estimate the probability of winning given your experience? Are you hoping for the best outcome or considering the most likely outcome? Make every trade count.
  2. Letting emotion influence – when a trade is entered into, or how big the size of the trade becomes. Never let emotion influence your trading. Good or bad it will never help you. Trading is for cool rational thought, striving to systematically take profits.
  3. Taking way too big sized trades: Understand that you are going to have losses along the way. Even the best professionals do. Never let one trade significantly affect your account balance in a way that would affect your future trading. A good rule of thumb is never to take on a trade bigger than 1/15 of your total account value. With binary options I would recommend 1/20.
  4. Not learning from mistakes and repeating them over and over: Keep a trading journal as we have recommended before. Jot down a quick sentence or two whenever you learn something new. Do whatever you need to do to prevent yourself from repeating mistakes.
  5. Becoming frustrated and quitting right before you get good: The difference between making a lot of money systematically and losing money can be very narrow. Don’t let frustration keep you from realizing your ultimate goal. Understand that there will be lumps along the way, but there will also be victories, and the lumps make the victories feel so much sweeter.

How Beginners Can Make Money

Even with so many ways to mess up, beginners to binary option trading can make money if they work hard and follow a system. The key to binary options trading is to control risk. As a result, a trader can never lose too much money on any particular trade. Hypothetically, a trader has a 50% chance of being correct on any trade whether they buy a call or a put option. To make money, a trader only needs to be correct on about 60% of trades of the trades that they take. This means that of the trades that a beginner with absolutely no edge (an edge is something giving a trader a better than random chance to make money) would take, they need to figure out how to turn about 20% of them into winning trades.

Binary Options – How Much Can You Make?: This is not a simple question. There are certainly traders who make a living with binary options. You could make thousands of dollars every month. However the best is if you start with lower expectations. Making hundreds of dollars steadily is a good way to start.

Here are possible ways that any beginner can easily do this:

  1. Use a signalling service. While most are not are not going to give a trader a significantly better than random chance of making money, they still should tilt the odds into the trader’s favor. This is all any trader can ask for. There are paid services out there such as elite trader, but even a free service from a site like barchart can give you the edge you need.
  2. Learn to use technical indicators. Technical trading involves using strictly price action (price charts) to predict future movements. There are a lot of indicators out there, but some of the most common ones involve using moving averages. Examples of popular indicators are MACD, relative strength index, and bollinger bands. If you can find an indicator that works well for the security you are trading you can gain the edge you need in order to turn some of your would be losing trades into winners.
  3. Trade stocks before trading binary options. Stock trading is less volatile for a trader’s account than binary option trading as long as the trader does not use leverage and sticks to securities priced over $5. If you can figure out how to be correct on more than 50% of your stock trades, you can take what you learn and apply it to binary options to multiply your earnings power.
  4. Track your performance in each binary option security. Most people will be better at trading some stocks or commodities or currency pair than they are at others. The simplified reason for this is that each particular symbol will move differently than the others because each one has its own characteristics and traders involved in moving the price. If you find a handful of option trades that you are consistently profitable in, stick with what works and increase your size. You don’t need to waste your time and money on unprofitable trading.
  5. Buy the right option length for your trading style. Some trading styles will work better over very short term trades, and some will work better over trades held for a long time. Know your style and the appropriate length option you should buy. A value investor for instance would not be sensitive to price changes over a 1 minute option, but may be correct on a super high percentage of trades over a 6 month period.

Binary Option Trading Is Not Easy For Beginners

The problem with this dream is, how often does this really happen? Let’s just say a lot of brokers would never be in business if it happened very often that beginners made money.

Above all, beginners have dreams of being smarter, better, and luckier than everyone else who has every done something, but the harsh reality is that trading in any form is not easy.

Especially when it comes to making money from trading, it takes hard work, dedication, and a commitment to learning. And when I say learning I don’t mean just reading a couple articles, I mean actually learning from your wins, from your losses, from hard earned experience. As a result never take a trade and learn nothing from it, especially as a new trader.


What Our Readers Asked

The short answer is yes, you can make a lot of money trading binary options. However it will be very hard to do so if your initial deposit is low. Always keep in mind that binary options is risky and you could also lose money.

A binary options broker makes money when you lose your trade. This is the main reason why there are not fees when trading.

Yes, many traders have success with binary options trading. You can even follow some of these traders. In order to do so, pick a broker that offers social trading. This way you can pick your favorite trader and copy their actions.


Do We Recommend New Traders Even Try Binary Options?

Of course! Every successful trader was new at some point. Just because a lot of traders go into trading without educating themselves or having realistic expectations doesn’t mean you will as a new trader. In fact, since you are reading this article you almost decidedly will not. At How We Trade our job is to prepare new traders for success. So move forward knowing you have a strong ally in us!

Interested in opening an account? Check out our homepage for the best trading platforms, along with our top rated binary options brokers.

IQ Option – Best Trading Platform

IQ Option is a trading platfrom that is regulated by CYSEC. It is the best trading binary options broker on our website. It’s a perfect pick for new traders.

  • Trusted CYSEC Regulated Broker
  • Minimum Deposit: $10 (Lowest In The Industry)
  • Free Demo Account

OPEN DEMO ACCOUNT

Daniel Major

B.S. Degree in Economics and Finance. Professional day trader. Live and work in Manhattan, NY, NY.

Page Updated: November 2, 2020

100 thoughts on “Can A Beginner Make Money With Binary Options?

  1. Iam also a beginner and I a bit scared to trade big because the only trade platform Iam using now is the high-low system and its nerve-racking, have more loss than any gains. Been reading articles, checking charts but its tough

  2. Inspiring article. Been trading for a while now, lost quite a bit of money, but always looking for ways to improve my trading as I am sure I can eventualy make it work.

    1. Sorry for your lose Serban. I am a newbie also and I don’t want to lose s lot of money. I need someone to show me how to make some.

  3. Hey Nondumiso, welcome to howwetrade.com. Please tell us more info about your trades. Did you follow any specific trading strategy? What did you trade on?

    1. Hi, I have signed up with 3 brokers for binary options account. I have tried trading but most of the time I lost. May I know what is the best strategy or indicators to use.

      1. I am not a binary option trader but I buy real stocks and sell them within a week or a month, I have made 35% gain so far this year with my investment on stocks. My advice is to understand the fundamentals of the stocks you are trading and use the same techniques to buy options, the only difference, option is cheaper to buy but you only trade options on the money that will not affect your life if you have lost it. My general rule is, a company has the least debt within its sector will sail through the economic downturn and re-gain its winning momentum quickly. Companies with aggressive acquisitions are loaded with debts and easy to crash to the bottom with bad news. Start with $200 and take 7 years to gain experience and you start making money, lots of money.

        1. iT SEEMS TO BE A COMMON THREAD ANYMORE. Why is it you read someones recommendations only to go to this website, then that website to see where this is a scam, that is a scam. Its no wonder individuals can invest at all without losing their hard earned dollars. For cry out loud, where is it that you CAN go, set up an account and have said broker, WORK for YOU for a change instead of ripping off their customers. You get a sense of, you cant invest anywhere because someone or some company just blackmailed another on a website report, yet here is the kicker, why would THEY advertise for you to go to THEIR recommended site. You stated that you have been into stocks for a while. You know, I just read an article very recently that states Forex trading is illegal in the USA, so WHY are these companies allowed to do this? Im tired of reading said articles and I dont have a $5000 or even $10 k to put into an account. I just want to be able to get my measly $250 or even $500 to start off with and make a nice quick cash profit because I need it. Im reading people putting $50 down or $100 and getting back, $2500 to up as high as $100,000. Insane to hear these reports but Ive been told most of these stock programs use an algorithm to indicate what stocks to pick that will win, in which case most of the news publications have their day traders speak about yet when you have questions, the publications tells you that you are not allowed to speak to these people, but their disclaimer says their customer service people are NOT investors or strategist, If I have a publication paper with then the why cant I have my questions answered either by them or their editors. Ive been told to consult a licensed broker, UNFLIPPEN REAL… What can you add to this? Who can you trust, yet someone is making a killing in the markets. Im seeing it everyday. Also, when you do sign up with a broker, why do they require you to put in a minimum amount in your accnt of $1000, $2500. What is that used for? Is it for the Broker only, or is that what they can work with. I seen a lot of free accounts to open, is that a red flag because Im concerned about fees and other unknown charges.

        2. HI Thomas

          well I have to say your post promoted some thoughts in my head and seems we are on the same page. I am just about to start a blog post and an online community on this appalling rip off culture that seems to be racing unchecked worldwide and relieving people of there hard earned cash in the process. I have lost tens of thousands via what can only be described as legalised scams. I say legalised because no one is interested in doing anything about it!!!
          Would love to share my journey with you , it sounds like you are in the same frustrating position as I am.

          regards Murray

    2. hi i am a old man trying to learn binary trading and i dont know where to get help to learn this, i have lost thousands trying and most platforms see me comming and just take me some have even kicked me out when i did win and did not even pay me my profits. when i went to school in the 70s a computer was a calculator i just need some one to help me learn how to trade and not rob me i have account now with 24options and would greatly welcome some one to help me learn

      1. if there is anyone that could help me i would gladly share my profits and i promise to listen to advice surely there are still some good people out there that have heart and like to help others.

        1. You’ve been ripped off and you’re likely to get ripped off again. Instead of putting your trust in people out to rip you off again, save your money. Or use a robot to do the guesswork for you. IQoptions.com is a good start. But if you don’t get it, don’t risk any more of your money

        2. Hello, I have been reading in this thread and yes there are ways to capitalize on binary options. I really know nothing about binary options trading but I do know individuals who,are very good at making profits so,I became involved with them.

  4. Hi I deposited money for trading at binary, now I think I lost I cannot see any improvement, and worse I don’t get assistance from experts there, I already confused about trading

    1. My 2 cents….making money at trading means losing…maybe big…learning from your trades…especially your big losers…..building a strategy…trading it…revising it….trading it again…a lot of research….its a war…you have to become an expert in any field to make money in it…..survival trading…..if its a hobby or part time….dont trade….you will lose…always improving….become technically gifted….you are good at what you do…but there are real experts out there….look for any edge….you know the greeks…you know there angles…they are there with there short nets gathering theta….use time against them…trade more….risk less…be a robot..and have fun…nothing can prepare you for the joy of option trading…..happy hunting and good luck

        1. I don’t have much time to trade actively so are there brokers that could help with binary options trades and do some of it for me. I tried option robot and made money at first but lost it all eventually
          I am a USA citizen and there is only one broker available and they are no help at all

      1. Anything is a gamble if you do not know what you are doing. I always say “Do what you do best and delegate the rest” Binary options fall into this category.

Leave a Reply

Your email address will not be published. Required fields are marked *