20 sentences of advice about online trading and binary options trading in particular

Posted by Shawn on November 8, 2009 · Leave a Comment 

binary-options-trading

1. Have trust in yourself – Do not rely one on brokers for trading advices. Same goes for analysts recommendations and tips from friends, gurus, newsletters etc.

2. Patience – Successful trading is a skill which being acquired over time. Surveys among profitable traders reveal that patience is a common role.

3. Have the right tools for the job- Decent internet connection, comfortable chair, sharp screen etc. This may sound obvious but feeling comfortable while trading is a must.

4. Set goals and find motives for trading – First question any trader should ask himself is “What do I want from the market?” The obvious answer may be “Money”. However, from my own trading experience I can assure you that a more appropriate answer would be “I want to figure out how the game works” / “I want to retire with more money” and so on.
Note: subconsciously, many people trade solely to lose money as a form of punishing themselves for things greater than they understand.

5. Focus on the ‘Now’ – Focus your effort in understanding market conditions as they are now rather than understanding the past or predicting the future.

6. Avoid hunches – The successful trader is in the market solely during market conditions he understands, rather than trading on theories and wishful thinking.

7. Record, Analyze, Improve – Keeping constant records of your trading activity in order to analyze what works and what doesn’t. By keeping a track record, you will optimize your trading strategies, and eventually your results.

8. Give trading the time it deserves – The game of trading is not suitable for the ‘get rich quick’ or lazy sort of mentality. It takes devotion and time to become a successful trader.

9. Scan the market for opportunities- Analyze as many charts as possible and filter them amongst those who interest you the most. Sometimes you’ll need to watch as many as few hundred charts before finding a suitable trade which may answer your criteria for order entry.

10. Manage expectations – Trading is a game, not war or love affair. Learn how to play rather than how to fight. Do not fall in love with the markets; develop an objective view towards it instead; e.g. – one that will increase your overall income. As a game, trading is the most rewarding game on the planet, but in order to master this game, a trader needs to stay realistic and know what to expect.

11. Have the right trading strategy – the ‘right strategy’ may vary from one trader to another based on personality and characteristics. The ‘right strategy’ is one that can be tailored based on one’s strengths while avoiding his weaknesses. The ‘right strategy’ is an individual thing.

12. Work on your mental abilities- While trading you must be in your Zen mode. If a trader is tired, unhappy or simply bored, he will be led towards irrational trading behavior. Unbalanced people rarely ever make money in the market; therefore self improvement should go hand-in-hand with strategy improvement.

13. Better short-term than long-term(?) – Based on my own experience and view of the markets, I understand that no individual can ever speculate on the long term direction of the markets. Speculating on large timeframes is a privilege given to large-pocket players such as banks and big funds. As for us, the individual traders, we receive the privilege of momentarily timeframes and quicker gains.

14. Once you have a trading technique, stick to it – Many traders fail over and over as they constantly create new trading rules along their way. This is not likely to work for simple a reason; you won’t be able to follow which trading strategy to good and which isn’t.

15. Start with a virtual account – It’s better to start trading with binary options practice account to test drive your binary options trading strategies. TradeSmarter platform offers virtual money trading for free:
Open a virtual account now

16. Start your trading journey with enough initial capital- Small portfolios don’t give you the leverage to learn, lose some and improve. If you’ll open a binary options trading account with small amounts, a small losing streak will have a substantial impact on your account and your trading psychology. Ideally, you should start will at least $5000, and then trade for $100-$300 per trade.

17. Identify in what you are good at- If you’ll find that you are good in trading the US market, then stay with the US market, until you’ll have enough capital to try new things. Trading multiple markets will get you out of focus, stick to the market that works for you best.
18. Master technical analysis- Understanding the graph behavior will expose you to many investments patterns that you will learn to recognize and base your trades on.

19. The trend is NOT your friend; perhaps only your ‘fair weather’ friend – Regardless of what they all tell you (analysts, books, gurus etc.) As you can clearly see for yourself, markets move sideways for approximately 70-80% of any given time-period. Once you accept this as a fact, you may actually have an edge in the market. Learn to apply sideway techniques (which are far easier and more profitable) and utilize them in your favor. Read the graph as it is and do not project your theories on him. Listen to his story instead of telling him yours.

20. Don’t be loyal to a specific underlying asset- Save it to your football team.

I hope that sharing my thoughts will help you avoid some of the common failures and evolve as a successful trader. The reasons I advocate for binary options are

  • Having control of your position (due to shorter timeframes)
  • Efficiency in terms of risk/reward
  • Certainty of win/loss ratio
  • Advantages during sideway markets
  • Transparency of the trade
  • Most importantly, the fault tolerance for bad human and trading behavior (eliminating greed, fear, inability to act etc.).

Binary trading, for unknown reasons, is currently the markets best kept secret and I encourage you to take a look.

Filed under Binary Forex Options, Binary Options, Binary Options Trading, forex options, options trading · Tagged with , , , , , ,

Binary options – also known as digital options or fixed return options are sort of a hybrid between traditional options and fixed-return financial instruments. Digital options are simple, and they are ideal for the trader who wants the potential for significant, short-term gains with a strictly limited risk. This means the investor who trade binary options can know immediately and exactly how much a trade will yield or lose. A binary option allows you to form an opinion on whether a specific outcome will or will not occur. They can only have one of two possible outcomes. Unlike a spread bet a digital option does not require margin, no stops and you know the exact maximum risk and maximum profit. Binary Options trading allow you to take a simple “Yes or No” approach ( or Above/Below) on whether an outcome will occur. For example, will the GOOGLE close up on the day at the expiry time? If “Yes,” the Binary option settles "in the money" If “No,” the Binary option settles "out of the money".

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