How to Make Money Trading Binary Options

Binary options trading can either be the most lucrative undertaking of our life of the quickest way to throw money down the drain.  With so many options for securities to trade and different time frames, how is a new trader supposed to profit on binary options?  Below are the surefire steps we take at How We Trade to turn profits time after time.

Step 1: Watch 3 Stocks At Once

A human can not pay attention to 15 stocks at once and expect to stay on top of every one of them constantly.  We recommend that you pick only 3 stocks that you will watch for a trading session.  You don’t need 10 winning trades every time you trade.  Remember you only need 1 good trade to make a huge return.  Watch 3 stocks extremely closely and you give yourself a chance to spot the best entries.  Look for stocks near significant levels with a chance to break through, or that are in the news.

 Step 2: Only Take High Probability Trades

Take only trades that are close to a “sure bet”.  But how are you supposed to know what a sure bet is?

Remember when you are trading binary options you only have to be in the money by 1 penny!  Look for things like news that will move a stock fast.  Jump in before the stock finishes the move in a short 1 minute or 5 minute option, and a high percentage of the time you will be in the money fast and stay there.

Bank of America blasting through a significant round number.  This happens consistently with all stocks.
Bank of America blasting through a significant round number. This happens consistently with all stocks.

Other trades we love are when stocks go through a round number, or significant number.  Look at a chart of Bank of America (BAC) on the day it broke $10.   You can see this pattern again and again through significant digits with stocks, and often through any whole dollar level.

The best ways to get news before its too late?  If you don’t want to fork over the money for expensive news sites, then you can monitor social media, especially Stocktwits.  Users of Stocktwits who pay for expensive news services often will start posting immediately, so you can stay on top of what is happening at nearly the same speed as the pros, for free!  They will also alert you of significant numbers based on technical indicators, and it is a great source of information for new traders.

For a more in depth view of our scalping strategy for binary options, read about our strategy here.

 Step 3: Stay Away From Trading Lulls

During the course of a trading day, most of the day (90% +) nothing significant is happening.  There are a bunch of computer programs trading against each other based purely on other computer’s order flow.  If you don’t know what that means don’t worry you don’t have to.  Just don’t trade without a good reason.  No one who takes 20 trades a day is going to make money, because chances are most of those trades will be based on a very weak idea of thesis of why the trade will work.  Stick to the good stuff when the market is moving and stay away from the lulls.

Step 4: Withdraw Money As You Make It

Never give yourself a chance to do something stupid.  As you make money consistently remove it from your account.  This ensures that even if you do something really stupid like bet your entire account on one trade, you are still profiting over time.  Take your money out and pay yourself as you go.

Remember not everyone has the discipline to make money.  Be better than the others and follow our steps.  This will be your edge in the market over others.


Daniel Major

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

Page Updated: December 29, 2013

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