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Binary options investing can be extremely profitable. With profits of more than 80% in an hour, you can make money very quickly. However, that fast movement of money is a double-edged sword. You may also lose money right away if you don't heed some basic concepts. If you follow these three strategies, you will greatly improve your odds of taking profits.

Do Not Trade to Often

Warren Buffett once said, "There are no called strikes in the market." What the Berkshire Chairman meant was it's fine to pass on as many trades as you want. You don't get hurt by stepping away from opportunities. This definiltey holds true with binary options, because new options with new strike prices and new expirations are being regularly issued.

Trading too much or moving too fast will burn you when trading binaries. Take your time and do your analysis. Do not trade on gut feelings or hunches. If you miss out on a profitable trade, don't sweat it because there are always new trades opening up. Don't feel hurried to jump into something simply because think it will begin to move higher. If you ever believe you're over trading, relax and step away from the computer. There will be dozens of new opportunities later, and you'll have a significantly better focus to view them with.

Manage Your Position Sizing

The best thing about binary options trading is that you can generate big gains in a hurry. However, this quick movement in value is a double-edged sword. You can also suffer big losses in a short period of time. In light of this, it's very important that you don't enter too large of a trade in any particular option; regardless of how sure you are in the trade's probability of success. Don't get into the trap of, "betting the ranch on a sure thing". You may have many of those trades go your way, but it's just a matter of time before one of them burns you.

Trade size is critical because no matter how accurate or how thorough your analysis is; even the most successful traders will eventually end up in a tough stretch of losses. If you've managed your trade sizes appropriately, you will be around to trade though it until the profits start coming.

We recommend that you don't ever put more than 5% of your binary trading account into any one option. If you start out funding your account with less than $600, you won't be able to follow this rule, because the $30 trade minimum will be more than 5% of your account. If you simply don't have $600 to start out with, that's alright, but just understand that you are putting yourself at a higher risk of depleating your funds if you have a few losers in a short period of time.

Use Technical Analysis Appropriately

There are several varied techniques and theories behind technical analysis. We have found that for most successful traders, it's not the technique that used, but how it's used that determines the ultimate success or failure of the trader. If you have a technical analysis plan that has been checked for accuracy, it's important that you apply it consistently, and don't second-guess the data. If you can't fully believe in your strategy in this fashion, you're better off looking for a new strategy.

The other important item regarding your charts is to use a time interval that is appropriate to the short-term nature of binary options. We generally recommend 3-minute charts for all options that will expire that same day, and hourly charts for any contracts that expire at the end of the week. As always, check for accuracy within your strategy, but there's no point in using a daily or weekly chart when trading binary options.