Frequently Asked Questions
I created this page for the many frequently asked questions which I receive on a daily basis. Please take the time to scroll through this page in order to find the answers to your questions before emailing me. These questions are listed in no particular order but they will be segmented into their own categories.
Binary Options FAQs
1. What are your recommended binary option brokers?
2. Are binary options taxable?
Binary Options is still a grey area, so depending on which country you live in, you may or may not get taxed for it. Some countries consider it gambling while others consider it trading. I live in Canada and based on my discussion with my accountant, I report it under capital gains/loss to be safe. I know my friends in the US also report binary options under capital gains/loss. Regardless of living in Canada or the US, this is not tax advice, do not take my word for it. You should definitely consult your own accountant to be sure.
3. Where can I get a binary options demo account?
4. What expiry times do you usually trade?
It depends on the market conditions, which determines what strategies I implement. If the opportunity presents itself, I will transition between 60 second, 15 minute and 30 minute binary options. However, my highest accuracy is on 30 minute expiries, so those are definitely my favored choice.
There’s usually only 1 or 2 opportunities for 60 second binary options, so if I miss them then I can’t trade them for the rest of the day. Unlike 15 or 30 minute binary options, where I can get between 2-4 signals an hour.
5. Why do I have to submit personal documents to withdraw from a broker?
Generally speaking, every financial institution requires you to submit personal documents to verify your identity/background check and most of them ask you to do it prior to opening an account. When I say ‘every financial institution’, I literally mean all of them. e.g., What do you need to provide when you open a bank account? Stock account? Forex account?
The only issue that arises from a binary options stand point, is whether or not the broker in question is legit enough, that they won’t misuse your information. I personally have yet to come across a broker who actually tried to steal my identity but that’s not to say it doesn’t happen at all (that I know of anyways). Most of the shady brokers just try to steal your money but I understand why you would be concerned about identity theft.
My tip would be to stick with a big broker, avoid the small ones. Big brokers can make money legitimately while the small ones will be tempted to cheat. Big brokers usually avoid doing shady things to tarnish their name.
6. How do you determine if a broker is big or not?
This isn’t a fool proof method but if they have a lot of press or a lot of people promoting them then generally speaking, they’re considered a big broker in my eyes. If in doubt, just go to a binary options forum and ask the community if anyone has ever heard of or use the broker in question.
1. Do you have a Forex series?
I did at one point in time, some of my older students may recall that I started the Forex Series back in Jan 2013. However, I discontinued the series due to lack of time/demand but primarily because it’s already overdone. There are plenty of Forex education sites out there, like http://www.BabyPips.com for example. They have a very good formal curriculum on Forex trading in my opinion, however, formal means more fluff.
2. Where can I find your Forex Weekly Analysis?
Between June 2011 and Dec 2013, I used to post my Forex Weekly Analysis on my blog, Financial Trading Journal. However, since I took down my blog, they aren’t posted there anymore. From now on, you can find my analysis on TradingView, so you can follow me on there: https://www.TradingView.com/u/ForexWeeklyAnalysis.
Full details on how my Forex Weekly Analysis works can be found here: http://www.ForexWeeklyAnalysis.com
1. What is required to become a successful trader?
As I cover in GT101: Introduction to Financial Markets, 99% of traders fail and/or lose money. Most people either give up due to lack of motivation or lose too much money, forcing them to quit. People usually have a false misconception whereby they think they can simply learn how to trade overnight (or in a short time) and start profiting quickly. If this was the case, everyone would be profitable trader and no one would be working.
Becoming a trader is not different from any other career in life. For example, in order to become an accountant, you have to go through several years of schooling before you can start your career. Why is trading any different? Sure, the knowledge that you learn isn’t as comprehensive as accounting but when you’re in school, they usually drill you with lots of practice questions over and over until you understand it. This is the biggest factor for trading because the markets are dynamic. They aren’t static like the numbers you find on a balance sheet.
In order to adapt to dynamic markets, you need the experience to trade it effectively. This is by far the biggest obstacle for most traders because they don’t give themselves enough time to gain experience. In my first year of trading financial markets, I watched the charts for about 4-6 hours everyday for the whole year.
In my 3 years of trading, I’ve seen lots of traders come and go. The ones who failed usually quit within a few months because they thought they could simply observe the markets for a month then start trading. However, the ones who prevailed and succeeded with trading, were the ones who watched charts day in and day out until they fully understood the markets. Here’s a general timeline for you guys:
- Year 1: Observe the markets during every month because you’ll start to notice every month and season has it’s own market dynamics. Certain strategies work in one month then fail in the next. You’ll learn to adapt to the markets via utilizing different strategies.
- Year 2: See if what you observed was right or wrong. See if your strategies work in the same months this year as they did in the previous year.
- Year 3 onwards: If you were right in 2nd year, then continue what you’re doing otherwise figure out what you did wrong.
In trading, practice doesn’t make perfect but it gets you damn near close to it. I say this because nothing is 100% certain, the only certainty in life is uncertainty itself.
2. Is it possible to make money trading financial markets?
Continuing the same train of thought from #1 above, everything takes time. If you’re persistent in learning how to trade, there is no doubt in my mind that you’ll be able to profit eventually. The question is, whether or not you’ll still be trading at that time. I have a general timeline for this as well, following the one above:
- Year 1: You don’t make any money. If anything, you’ll lose money.
- Year 2: Assuming you’re still trading in your 2nd year, which most people don’t since they quit (hence, 99% of traders lose). Then you’ll likely get back to break even or maybe a little profit.
- Year 3 onwards: Considering you’re still trading, you should be able to profit by now. How much you profit depends on your trading style and personality.
The problem with this timeline is that it’s in years while most traders think it’s in months, which is why they give up too soon.
3. Can I rely on trading as my primary source of income?
Following the timeline in #2 above, you can once you’ve reached year 3 but I don’t recommend it. The reason being is because it helps to know that regardless of how you do in the markets today, or tomorrow, or this week; you’ll still have a steady stream of income. This contributes to your control of emotions while trading because you’re no longer relying on trading to make money. There’s no weight or pressure to have a good performance.
Obviously we all strive to profit but there will be losing days. If you have another stream of income that will pay the bills and put food on the table, then you won’t be affected (as much) on your losing days.
I follow my own advice above, I do not rely on trading as my primary source of income. On average, my capital gains usually represent 33% of my overall income. Another way of stating this is that trading adds about 50% on top of my primary source of income (which comes from my business ventures). On a day to day basis, my businesses usually have a positive cash flow while my trading portfolio fluctuates depending on my trading performance. The positive cash flow helps put my mind at ease while I trade.
Here’s my thought process on the matter: any money I make or lose via trading is the determining factor for recreational spending in my life. If I make a profit trading this week, then I’ll consider treating myself to a fancy dinner next weekend or going on a trip. If I lose money, then I don’t get to go out for dinner or go on that trip. As such, the thought of paying the bills or putting food on the table doesn’t even cross my mind.
4. What do you trade on a daily basis?
Currently, my portfolio is diversified into stocks, forex and binary options. My stock portfolio is primarily for long term trades (6 months – 1 year). Forex is traded on a swing trade basis (a few hours – a few weeks). Binary options is only the financial instrument on an intraday basis (unless a Forex opportunity presents itself).
5. When do you usually trade the markets?
A typical day looks like this (times are in EST):
- 4AM – 8AM: Trade London markets
- 8AM – 12PM: Trade US markets
- 12PM – 4PM: Business Hours
- 4PM – 10PM: Family / Business Hours
- 10PM – 4AM: Sleep (total hours of sleep = 6 hours)
This is what my trading days look like unless there’s a bank holiday, in which case I don’t trade since markets lack liquidity.
6. I prefer reading over watching videos, do you have an ebook with the same content?
Unfortunately, I do not… In my experience, it’s harder to learn how to trade via written material. Most people learn better via visual learning, which is why I set out to make videos rather than write an ebook. It’s definitely something I’ve taken into consideration in the past, in order to “help everyone”. However, it’s not exactly an easy task to transform my videos into written form. For example, I could easily explain a chart verbally in under a minute but if I had to use a series of pictures and words, it would take a few pages.