By Darrell Martin
How would it change your trading day if you haphazardly traded by following your gut? What about basing your trading decisions on whether the stars aligned in a certain pattern last night, or if the sun came up at a particular time?
Traders throughout trading time have written countless books on ways to decide whether to buy or sell when placing a trade. Some say it is a definitive chart pattern. Others admonish you to trade by the way you feel. Still others believe in the approach of simply doing whatever the guru says to do.
It comes down to education. How can you possibly be in charge of your trades and your money if you do not know what you are doing? You have to understand how things work in the trading world.
If you do not know a bid price from an expiration, it is time to invest the necessary time in your investment career. You would not allow a doctor to perform surgery on you without the necessary training, nor would you allow an untrained mechanic to repair your car.
Trading blindly, or without the proper training, is setting yourself up for failure. It is important to know how to place an order, have a basic knowledge of what the charts are doing and understand systems, strategies and risk management.
With binary options, the trading instrument is a simple concept. The contracts are small so it doesn’t take a lot of capital making it a great place to start. You can even start your learning process of how to trade binary options with a demo account where you’re not risking anything.
Trading binary options, the risk and profit of the trade are clearly defined before you even place the trade. That knowledge of knowing in advance takes away some of the anxiety and guess work of trading.
Think about how quickly you could blow through your trading account without the proper education. You have to know how to manage your risk. Do you know where to take profit, set stop losses and figure out how much you can risk per trade as well as per day? Do you know when to get into a trade and when to get out? It is not based on luck or the placement of the moon or stars!
Treat your trading like a business and make sure that you have a strong foundation and understanding of how the trading business works.
Investing in your trading education is a blueprint for success. Training to trade well is worth the time invested. Trade so that you can still be trading in 12 months, not just 12 minutes!