By Darrell Martin
Ask any trader why they trade and you will probably get the response that they want to make money. There are plenty of strategies and systems available to help traders achieve the goal of making money. However, most require you to follow the rules of the system or strategy. If rules are not followed, your chances of making money trading dramatically decrease.
There is not a system out there that will bring you 100 percent profitability. As you study any system and begin demo trading it, in order to become familiar with how it performs, you may be tempted to tweak it here or there. Perhaps, you would prefer a different bar type or only entering when you feel the market is going to trend. Maybe choppy markets scare you, so you disregard any rules that apply to choppy markets. All of these scenarios must be overcome. Stick to the rules or the money won’t follow.
When trading binary options, you know that for every trade you make, there has to be someone on the opposite side making a trade. If not, there would be no trade. Those traders are not out to get you. They are just like you– they also want their trade to be profitable. It is the buy and sell of the traders, as well as the market makers, that move the markets.
Clearly defined entry and exit rules must be kept, along with any stops or additional contracts to collect more profit. You have to know what your system or strategy is designed to do and then follow it. Any deviation from the rules of the system ruins what the system is designed to achieve.
A good system will be able to be traded across all binary option markets. There are days when the market is either too volatile, or too flat to provide you with the necessary signals for entering a trade. There may be another market that day that is perfectly set up to meet the rules for your trading strategy. Trade multiple markets.
It is easy to go back through your charts and see all the trades you missed. At that point, you may blame your system or yourself. However, if you are following the rules of the system, you will miss the losses instead of the wins. It isn’t about how much money you didn’t make. It is about how much money you made and how much you did not lose.
Once you have the rules of your system down in demo, move to live. Once you have success trading live, you can add a little bit of your own style. Learn to read the markets by following the rules of your system and practicing until trading is like muscle memory. You are not emotionally involved in the trade; you just take it because it meets all the parameters of your trading system or strategy.
Your trading motive is to make money. Follow the rules of your system and make it do the work for you.