There are some points in your entire trading experience that you felt like the market hates you and nothing are really going your way. In these scenarios, what do you often do? Do you move backwards and try to get back your focus? Or do you try harder to prove that you are better than you think you are?If you are doing the latter then you are pretty prone towards forcing your trade. This does not only include getting trades that do not meet by your trading rules. These trading restrictions sometimes take place when you are desperate about making things happen rather than easily reacting to what is really happening.
WHAT IS THE IDEA?
What is quite interesting is that that the attributes of ay thriving trader, like being aggressive or competitive may also lead to probably downfalls. A very cut throat trader can have problems being calm while caught in between a losing streak which them leads to over leveraging or over trading just to have his/her cash back.
The idea the regularly divides profitable traders from the group are that they can control their trading decisions as well as their emotions. A great way to control these elements is by transforming your trading rules to positive trading habits.
Initially, following your own rules about risk management, leveraging, position sizing, and loss placement prevention may be very challenging. But if you are hopeful towards making up for your personal losses, you will most likely be lured to trade without stopping and take more risks. In such a scenario, you have to remember that trading is all about grabbing chances when they are there rather than chasing them around the market. The fact is that you have no control whatsoever of market moves, but you are in clear control of your personal preparations and reactions to these market movements.
Famous trading psychologist, Dr. Brett Steenbarger compared trading to waltzing with trading markets where traders have to agree to the market and that it is taking its lead. If you try to lead the trading market by assuming future action of prices, you may fall over and miss the chance on more gainful moves. The only thing that you have to do is by getting the correct timing and being in sync with market movements.
Trading is a tough process. You have to be very patient about making your moves.
A lot of traders including their accounts have succumbed into depression due to greed. Because of this the trading saying “Bulls and bears make money; hogs get slaughtered” was born. The Hog is without doubt one of the greediest animal in the world and a greedy trader can be compared to a hog. It is a fact that the trading world does not pity hogs.
According to the Merriam Webster Dictionary greed is something that is desired excessively and selfishly. Yes this sounds quite familiar especially if you are a trader. Reality is that it is our dream to have lots of returns and this is the key factor that lures us towards trading for more. However, this desire is not healthy and it is dangerous especially when done in excess. For this reason, you can consider greed as a hazardous emotion. This is even scarier than fear itself. Fear can stop you and get rid of your drive to trade. Nonetheless, fear is the major factor that allows you to stick your hands in safer areas. On the contrary, greed lets you act in a way that produces negative effects. This is the reason why it is really dangerous.
Moreover, greed can let you think irrationally. As for trades like you, greed typically comes through overtrading, chasing markets, over leveraging, and keeping trades that are not worth it. come to think of it, greed is similar to drugs or alcohol. It can also cause addiction and let you act in a very foolish manner. You can be high with greed or be drunk with it. just like other activities, getting rid of greed needs a huge amount of discipline. It is quite hard to get rid of it but there is always a solution to do so. It is all in the mind.
You need to come clean and put in mind that you do not always make the right moves or the right calls. There will be times when you cannot get the full move of the market. There will even be moments when you will not catch a great set up.
As a matter fact, this is trading and it has a lot of elements to deal with. When you learn how to accept that the trading market is a huge arena and that you will surely make mistakes, it is by then that you can focus better on the plans that you have designed. By doing so, you can help get rid of greed.
Many traders who are successful admitted that they would rely on luck rather than doing good. For most traders, success can be better attributed to luck rather than on their personal trading skills. This is not actually advisable for your ego but it surely is useful for your trading needs. This is practically a wise trading secret.
If you are a binary options trader, frustrations will always be normal for you because losses can happen all the time. When you are frustrated with the results, you may doubt your capabilities and eventually, lose confidence with your own trading plan. This can then lead you to overtrade and bad decisions making in order to prove that your plan really works.
Assess your personal trading experience for a second and think about a time when you were frustrated because of your decisions. Did you think about your succeeding trades much clearer? Did you personally take your loss and begun asking yourself if trading is your trade?
Naturally, traders love to compete and it is exactly this attitude that will make you susceptible to frustration with your losing trades. The great news is that even though is that it is likely to handle such bad emotion and stop it from disturbing trading decisions.
Bouncing back from losing or climbing from your losing streak is quite easy to say than doing it. For some traders, it is simpler to aim the frustration to themselves and then have some pessimistic self talk. When you will realize that you are doing this, you have to take things slow! Blaming yourself will just make you a sour loser and what’s the point of doing so when you already know that the market is unpredictable? No one, not even the best economists will know when or what the next move will be. You have to learn how to accept your loss, tap your shoulder and congratulate yourself for taking and managing your risks. You just have to take note of lessons learned and then you can simply move on.
If you believe than losing trades can be blamed to your lack of proper preparation, then you need to tell yourself to make your assignments. As the famous quote says, “Prevention is better than cure.” In trading this means that you will not be too frustrated if you spend much effort and time in doing the basic analysis and process. Beside this, you should not forget about planning trades and determining actions steps for certain probably market scenes. Never open your arms for frustration and make rush decisions.
Some traders focus their frustrations towards their own trading strategies. You have to put in mind that there is no point in being frustrated when you know that you there are random market moves.
Yes, there may be constant shifts in the market environment but you have to put in mind that steady and reliable profitability may be gained when you stay disciplined and when you follow your proven trading plan. If you are persuaded that your personal strategy no longer works, you can try doing back tests or even changing your approach, rather than being frustrated and ending it all.
You have to keep in mind that trading is not a quick race but a marathon. There shall be moments when it will be hard for you to deal with the market and that is alright. However, just remember to know the right timing and focus.
Have you tried being in a situation wherein you had a strong feeling that a certain currency pair will be behaving in a specific manner but you were not so confident about playing it? When the prices did not move as you have assumed, were disappointed that you did not even trust your instincts?
If you are an experienced binary options trader, you may have gone through this dilemma at some point of your career. You may have also wondered is trading is based on hunches and if it would lead to profits or losses. After all, many traders will tell you that purely relying on your feelings or guessing your trades is not that positive.
However, the contrary thought would be beneficial at some points. Trusting your gut can sometimes be good in trading. Trusting your instincts means trusting yourself. But this does not go to say that you will disregard all technical analysis and basic processes and instead simply trust your feelings on the markets movement.
As mentioned in most trading articles, trading intuition is a trading element that has been created through time and through experience. If you have used up a lot of your screen time and done correct practice, then you will be able to understand the market and how it behaves at specific moments thereby allowing you to have a clearer view on price movements.
Normally, traders become a bit uncomfortable when it comes to entering a certain trade using their instincts. If you are one of these traders, then it is ideal that you keep track of your hunches and if is spot on or not. By doing so, you can develop trust and you can also have me confidence in making future profits. You can also think about having a smaller position based in the feel of the prices. Just put in mind that you need to apply the right risk management system and always have an exit strategy just in case it does not go to the direction that you predicted.
So, realizing that trusting your instincts in trading is a bad idea and you should be more like a trading robot it means you have to take a closer look at mental approach in trading and psychology, so i would suggest you to take a closer look at this piece that was written specifically for this, binary options trading psychology.
Learn to control yourself is important part of trading process which you will learn only through practice and expirience that you will get on daily basis of trading. Learn basics and then try to apply them yourself in real world first through demo account and then on live trading account until you are profitable. Even Rome was not built in one day.
Are you prepared for another year of trading? Not too fast! For binary trading amateurs and pros out there, you need to put in mind some useful reminders so that you can successfully create new trading goals. Here are some tips for newbies:
BINARY TRADING IS NOT A MEDIUM FOR EARNING QUICK CASH
It is always possible to make quick cash but in the world of trading this can be totally possible when you are a financial wizard. The truth to the matter is that binary trading is a business and just like any trade out there it has its ups and downs. You position your capital. You make some money and then you lose some while on the process of improving your skills. And then you can slowly and most likely, surely learn how to regularly profitable.
TRADE THE MONEY THAT YOU CAN AFFORD TO LET GO AND LOSE
A very typical mistake that amateurs have is risking cash that they cannot afford to lose in the first place. If you are a newbie you need to let go of your fear from losing cash so that you can concentrate on your skills for trading. If you do not have a lot of principal investments yet, you have to begin with smaller accounts or probably try out your trading skills on the demo.
ALWAYS HAVE A TRADING JOURNAL
The fact that you are new makes you prone to numerous trading mistakes which take experience in order to overcome it. Just a small trading journal can help you monitor your improvements or your mistakes. A journal can help you keep track on what is working and what is not and if the changes you are making are correct. Remember that what you cannot measured can’t be managed.
ASK FOR HELP IF THE NEED ARISES
Remember that you are still new in the business and you need all the guidance in the world. Even professional traders asked for help so there is no reason for you not to. You can go to trading forums and as from binary options junkies.
Here are some tips for professionals:
NEW IS NOT ALWAYS PREFERABLE
Sometimes, it is important to look at the past. In trading, you can also learn from the past and assess if adjustments in position sizing, stop losses, and indicator settings may have altered your trade’s outcomes. New is not always better. You can look at your journal regularly to know if you have properly carried out your strategy. Think about it, even with a good strategy, you can still fail because of poor execution.
HAVE EXPECTATIONS THAT ARE REALISTIC
It doesn’t mean that you gained higher rewards than risks last year you can target a thousand percent account increase this year. You need to have your expectations and goals set with regards to your average performance, capital limitations, and available trading time.
WINNING IS MORE DANGEROUS THAN LOSING
Losing is not the only aspect that can give you psychological problems. Winning too can lead to such demise. When you have constant winning streaks you can develop overconfidence which can lure you towards overtrading and lack of preparation. This is actually worse than just being afraid because you will most probably be welcoming useless risks. It does not matter how many times you have won, but you need to be consistent.
KEEP YOUR EYE ON THE PROCESS AND NOT ON THE PROFIT
This is practically the summary of everything discussed in this article. Binary options is a trading race. Just like any useful activity, having consistent income also needs consistent self development and of course, practice. You should not distract yourself from single losses or earnings. Always maintain your target at the prize and be focused on doing things right.
These are the tips that you should have in mind at all times. You can write them down or print because they are the basic if you want to ever become successful trader in binary options.
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!