By Darrell Martin
When trading, your biggest enemy can be yourself. Take a step back and stay on track. By taking a few moments to review some of the things that may be tripping you up, you can make the corrections and move forward when trading binary options.
Poor risk management can cause you to blow through your account. You don’t want to risk half of your account on your first day of live trading only to lose it all. That hurts you both psychologically as well as financially. It is important to have a goal. Ideally, if you’re up or down five percent, you are done trading for the day.
Perhaps you have an amazing system that supposedly wins 85 percent of the time, but if you don’t follow or you bend the rules, you will not be profitable 85 percent of the time. It is important to be consistent and follow the rules. If it says to take every available trade but you pick and choose your trades, you will not see the results you want to see.
You might think that you can figure out trading all by yourself. Learning to trade binary options works much better if you employ some social interaction into the picture. Involve yourself in a binary options trade room. Ask questions of other traders in there. Don’t be too afraid, too cool, or too proud to ask for help. You may understand everything about the system you are trading, except for one little aspect. Another trader has the answer you are seeking, but if you don’t ask, you are wasting valuable time trying to figure it out for yourself.
If you are trying to be “a jack of all trades,” you may be a “master of none.” Master one system before you attempt to learn another one. Work out all the kinks of a system in demo, then move to live and master it there. Remember there is no Holy Grail trading system that wins 100 percent of the time. You will have losses in trading, which is another reason to also master risk management.
If you break a rule in your system, but it causes you to make a profit, don’t believe that it will work that same way again. This is rewarding bad behavior when you make new rules. Stay consistent and do not make up new rules.
Understanding market conditions is another concept that is valuable to trading. You have to know how your system responds to certain market conditions. Learn different systems to trade binary options as quickly as you can, in order to have different plays for different markets.
You must have accurate live data to make good decisions regarding binary option trading. Make sure you have good charts with live data. You cannot trade off charts with delayed data. There are some places online that offer free live data to help you trade binary options.