Trading binary options is not an easy game to win; the statistics claims 90-95% of binary options traders ends up a loser in this business. Binary options as we know is gambling in nature; but it doesn't need to be so if you know how to beat it and execute your game plan thoroughly. In this post, I will reveal the best way to beat binary options house. Bear in mind my advice is based on my own experience and to really be successful in this, you must have the discipline to practice my advice. Here are three important tips to beat binary options trading.
1. Sufficiently Test Your Strategy at Least One Month and Trust It 100% When You Start Trading in A Live Account
There are so many trading strategies out there to choose from; however, you cannot believe the claims of other people even though the strategy is bought from them. You need to test the strategy in a demo account first to experience its performance in the real market. Testing the strategy helps you realize strength and weakness of it and sometimes you can find out what markets it works well and what markets it does not. Sometimes, the setup mentioned in the strategy is not enough and when you test the strategy, you can even find out more setup criteria to enter a trade. Testing also increases your trust in the strategy. As trading can yield both wins and losses, trust play very important role in reassuring your mind that the strategy will work in the long term use. You can search on this blog to find some trading strategies I have posted.
2. Mindsets
Mindset is also crucial for beating binary options. Wrong mindset will lead to wrong expectation and thus frustration that can cause emotional trading to happen. A good trading involves the minimal human emotion. Having a right mindset means you put your emotion into good trading habit instead. The right mindsets include:
Every market moment is unique. You may be illusioned by repeated patterns and past scenarios although our trading system is based on repeated behaviors of price; but the sad truth is that every moment in the market is unique. You cannot expect the market to do the same as your system tells you. Markets are unpredictable and volatile. You cannot expect the market to move in a certain pattern at any moment. So using a strict strategy is to create certainty by ourselves and that is the way to beat an irregular market movements.
Losses are investment. Trading must be treated like a normal business. In a business, you need to invest some capital to create profits. Trading is the same. When you lose is when you invest your capital and when you gain profit is when you receive return from your investment. There are no such business that requires no investment. You invest money when you enter some trades with losses; when you enter a trade is not an investment yet.
Do not expect anything. Trading is a probability game; when you trust your strategy, you stop
paying attention to each trade. Each trade is just another small part of
the whole picture. For me, when I enter a trade, I never expect it to
win. Instead, I expect it to lose and lose until the maximum loss limit
you set for me to end the day and do something else. Positive
expectation works again your emotion and can cause distress and anger
when the trade loses. In short, expect trading to be a game and have no
future. You can regard it as a secondary income or investment. Creating
life balance and happiness can make your trading successful.
3. Accept and limit losses, and maximize gain.
It is important to accept losses. If you cannot accept losses, you cannot win either. Losing is part of the game; however, you have to limit it. If you set a target of losses and wins each day of trading, you will be successful in the long term. Maximize gain is also crucial. Successful trading does not need to win more than lose. Sometimes with good money management technique like super compound money management technique I wrote about on other posts can help you maximize the gain. It is important to end some days of trading with losses. This is the most difficult aspect that hinders success of most traders.
Conclusion
Trading always cause conflicting emotions that cause you trading to go astray. These emotions mostly work against you. Learn to trust your first intuitive thought. When you experience losses, your first intuition always tell you the rules you need to follow next. You need to trust this first intuition. For example, when your loss limit is hit, your intuition will tell you that it's time to stop. What you need to do is to follow this intuition promptly. Open a demo account to practice your skills with Deriv.com.
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