Even when you are still trying to test and assess your new strategies as one of your trading resolutions for the year, you must safeguard yourself from some vital things that will lure you towards abandoning your plan. These factors are distractions, loss of confidence or self esteem and overconfidence, boredom, and fatigue.
One common culprit of bad trading decisions is distraction. This can come in any form – big or small. Even when you are around a lot of excitement you can still be distracted. When you want to have a comfortable trading atmosphere, make sure that most of the things surrounding you are positive. This means that you must be around things that help you maintain your focus. One way to get rid of distractions is by changing your workspace. For example, if you have a television near your PC then you better move your PC or television. Moreover, even when you only have your PC with you but you find yourself looking at social networking sites, then you might try to block these sites for a moment.
You have to put in mind that market does not wait for anyone and you have to keep your attention to it. When you are busy checking other websites you might end up veering away from useful market signals. The worse that could happen is that you may end up having huge losses because you were too preoccupied doing some other stuff and end up missing your cue exits.
The good news is that there are so many ways to limit distractions. As mentioned before, you can block unnecessary websites or restrict them at trading hours. You can also tell your family and friends not to disturb you during those times.
LOSS OF CONFIDENCE AND OVERCONFIDENCE
If you trade you must learn how to accept losses because the marker is very unpredictable. You will lose your confidence when you have a continuous losing streak. The fear of losing again would haunt you and you will find it difficult to climb back up. Your emotions will get the most of you and in the end you will end up quitting or you will be afraid to take risks and close winning trades earlier. One way to avoid such frustration is to take things one step at a time. Make sure that you focus your attention in a single trade before moving on to another. If you lose at a trade then ponder on it and assess your moves. It is always better to work with a clear mind than with a foggy one.
On the other hand, overconfidence is another factor that can lead you towards abandoning your trading plan. When you win one trade after another, you will feel like a king. However, you have to remember that you should not be too soaked with your success because you will not notice that you have already totally ditched your trading plan. You begin to trade carelessly and make bad decisions thereby jeopardizing your trading plan.
Yes, it is always common to feel good and confident after a winning streak but this can be dangerous because as you become too confident your judgment can be clouded.
It is a fact that even though the binary trading market does not sleep you are not guaranteed to have a whole day action. There are moments when there are lesser chart activities and it can be so boring waiting for a suitable set up to come to life. Regrettably, a lot of traders deal with boredom in a negative manner – they force a trade just for the sake of excitement. They stray from their plan and make strange trades. It is not surprising though that trades from impatience are done out of impulsion and can lead to bad decisions in trading.
When you feel bored trading, you can break the ice by simply giving yourself a break. You go to trade forums, learn from trader’s blogs, or any other productive things. Veering away from your trading plan is not the answer.
When you are mentally and physically not fit to do anything, then do not trade at all. You might have tried studying or taking an exam after partying the night before. This can be a recipe for disaster. Just like trading, it is not good to make Calls when your body and mind are fatigued. You will surely have slower reaction times and your brain is not that sharp. With a slow mind you will most likely move away from you trading plan. If you do not want this to happen, you can take a rest first before you make critical trade decisions.
Make sure you are prepared for the markets because they will not give you any mercy, happy trading!