The most common mistake that almost all beginning and experienced traders make is that they do not have any patience. Traders will make trades just to have something going on. It is best and often times wise to wait until all the stars line up and you have a perfect trade. Remember that if you are making 1 – 2, or 1- 3 risk reward on your trades, you are doing great. The professional standard for traders is 1 – 2, or 1 – 3 risk reward. So just remember that patience will equal a greater chance to make money.
Traders learn early on that they should only risk a set percent of their account balance. Now, in theory this is an amazing idea, but is not practical in the world of binary options trading. Here is something to think about imagine you have already lost 50% of your capital. Now you would have to make 100% of your present account just to get back to even. Every trader will have a period of time where they lose 4 or 5 trades in a row and this strategy of only risking 3-5% of your capital is a good way to make sure you don’t lose your account, but will make it difficult to get back to even. In fact we always recommend to our traders that you risk what you feel comfortable with.
Don’t be an Emotional Trader
One of the biggest problems for all traders no matter if you day trade or only make a handful of trades per day, is emotional trading. Anyone that has been trading for a short amount of time or for 10+ years, will tell you that emotional trading will happen to you. If you see that you are losing control and making more trades than you usually do, it is time to step away. If you see that you are losing trades that you would normally win and you feel the urge to keep trading, it is usually time to step away.
Trade Things You Know
Apple, Dow, EUR/USD, Google, etc, these are some of the most commonly traded assets. bnryoptions.com recommend that you stick with the asset’s you know and don’t even look at the exotic assets. No, matter what anyone tells you about trading, it is always recommended that you only trade the assets that you know. There is no reason to start trading CHF/EUR, EUR/JPY,,etc., just because you think that you have a good trade to make. The most common assets will give you plenty of opportunities to make value trades and to help you build your account.
One of the biggest problems that most traders have is that they over think their trades. When we speak to a trader and ask for their strategy, we find that more times than not they have too many indicators up. The most successful traders in the industry use the “KISS (Keep It Simple Stupid)” method. We always suggest to our traders not to go out and learn the newest system or put 10 indicators on their charts. This is will only help you to second guess your trades and make it so you never win a trade. We recommend finding a proven and simple strategy that will work for you. Speak to people you know who have had success trading in the past and ask them what they do.
I Have a Problem
The first step to fixing your bad trading habits is to admit that you have a problem. Traders will never admit that they are having problems making money with trading. Being humble will go a long way in becoming a successful trader in the future. Remember that there is nothing wrong with asking for help or admitting that you aren’t having a great deal of success trading.
This is one of the most important topics we will cover and we recommend that all traders read this article before you start trading. Day Trading has been around for as long as most people can remember. One of the most common things that we learn from our clients is that they are Day Trading or High-Frequency Trading. This is a quick way to empty out your account and to find yourself asking, “Where did my Money Go?”
Most people think by day trading they are given themselves more opportunities to make more money. In fact this is not true at all! When you day trade you will often cause yourself to become stressed, frustrated and this will only help to make you take bad trades. It is a known fact that most day-traders make less money than a client who only places a few trades each week.
One of the easiest ways to fix a problem like this is to set a small time frame when you know the market will be in your favor and place one or two trades. It is proven that the more time you spend watching the chart will equal you making more trades. Remember the more trades you place will only make it harder for you to make money and will ultimately make you become emotional. When a trader becomes emotional, rational will leave and you will find yourself making low-probability trades and more trades than you would want too.
Unlike in most professions the more time you spend will usually mean more money. Well when trading binary options you will find that the less time you put in will mean you make more money. We have found that most traders make more money in the markets when they spend less time trading or staring at the charts. So, remember that day trading will often equal more stress and greater losses. We recommend that you only day-trade if you know what you are doing or have done it before.