The question on whether a trader can become a millionaire by trading binary options is one of the controversial questions that dominate marketplace discussions on online forums and review sites. When you consider the fact that people like George Soros and Warren Buffett made their fortunes almost entirely from trading financial instruments, then the answer to this question is theoretically “Yes”.
I say theoretically because while it is possible on paper to become a binary options millionaire, the practicality of it is something that many traders will find hard to achieve.
Building wealth from binary options trading, or indeed, any form of trading for that matter is not a day’s job. It takes patience, time and a well-structured plan over a number of years to achieve this. Take a look at this Excel document (which has been modified from the original by forexoma.com). It details a 5-year plan on how to become a binary options millionaire with a starting capital of just $500.
I am sure you are blown away by the figures. By the way, the excel spreadsheet is built in such a way that you can play with the numbers as you wish. You can adjust the initial capital, adjust the time frames, the percentage returns you wish to make per month, etc.
This is a plan which demands patience and lots of discipline. If the figures are truly outstanding and look achievable, why are many traders not there yet? The reason is simple. Many traders do not mitigate their risk. They aim for home runs in their trade, looking for that one huge payday. They look at the glamorous cars they can buy with the huge payout, or the things that money can buy and cannot deny themselves the lure of instant gratification. Slow and steady will always win the race when it comes to trading.
The hidden principle to achieving what you see on the spreadsheet is compound interest. Albert Einstein called it the 8th wonder of the world, and believe me he was right. Compounding means that a little can be turned into a lot, and the higher the amount you have to compound, the greater the corresponding percentage of increase that amount will bring.
Look at the spreadsheet again. The starting capital is $500, and the rate of return per month is 15% which is $75 for the first month. There are 20 trading days a month. Using the lowest possible risk will get you there. The key point here is risk control.
You can become a binary options millionaire even with the lowest possible risk. The first step is to start. Get $500 and start compounding it dutifully and faithfully for the next 5 years and see how far you can go with this plan. You are free to customize the plan as you wish, but do not negate the principle of controlling your risk factor to the barest minimum.