One of the most frequently asked questions from people interested in FX options is “Can I really make money trading FX options without any prior experience?”
While there are dozens of ways to mess up, beginners to FX options trading can make money if they continually work hard and develop a system. Risk management is also key to succeeding in trading FX options.
In the hypothetical sense, a trader has a 50% chance of choosing the right direction on a call or put trade. In order to be profitable and make money, a trader only needs to be accurate 60% of the time.
FX options trading is not a get rich quick scheme. The potential to make thousands of dollars every month is there, but it takes time, practice, and patience. Lower your expectations and use the following tips to help you make money trading FX options if you have no experience.
Signal Service – Beginning traders tend to flock to signal service providers when they start trading. A signal service won’t make you a millionaire, but they can definitely tilt the odds in your favor. In the end, getting the upper hand and gaining that edge is all you can ask for. There are both free signals and premium services that charge a monthly subscription fee. It is always recommended to read reviews of profitable FX options signals before choosing a signals service.
Technical Indicators – Technical analysis uses price charts to anticipate an asset’s future price movement. There are hundreds to thousands of technical indicators out there, most are free, but others that give more market insight come at a cost. A few popular examples of free technical indicators includes: moving averages, MACD, RSI, Bollinger Bands, Fibonacci retracement and much more.
Trade Stocks – Trading FX options can be extremely volatile, which is why it may be a good idea to get familiar with stock trading before investing in FX options. Trading high priced company stocks comes with slightly less risk, and if you make money, you can take what you learn and apply it to FX options trading and make a killing.
Track Performance – Most traders eventually find out they perform better trading specific instruments, which is why you should track your performance for every trade you make. Every asset has its own unique characteristics, and the underlying forces moving price will be slightly different. If you find out you’re making more money from a particular currency pair or commodity, increase your wager amount and stick with what works.