Binary Option Golden Rules

 

 

Binary Option Golden Rules:

we have created a set of ‘Golden Rules’. We suggest that you refer back to these often and let them form the basis of your trading.
 

1. Define Your Trading Plan:  

What  are  your  goals,  objectives,  desires? How  will  you  achieve  these? Are  you  a  high  risk, get  rich  quick  type  of  trader  (gambler)  or  more  conservative  (and  realistic)? Your  trading plan will help to set out a template for your trades, the levels and returns that you will set and  why  you  are  trading. Refer  to  your  plan  often. Your  plan  should  not  be  so  rigid  that  it restricts  any  form  of  flexibility,  but  it  should  serve  as  a  reminder  of  what  you  set  out  to achieve. There  is  simply  no  point  in  successfully  following  a  No  Touch  trade  strategy  for  a month to blow your profits on an impulsive Intraday gamble on the last day of the month!

2. Understand You Objectives and Yourself:

Understand  your  character  and  what  will  motivate  your  trading. Does  your
temperament suit  short  term  trading or  long  term positioning? Are  you  good  at  making  rapid  judgement calls? Do you like to take time to assess situations before jumping in? As we do in life, we all display different characteristics and we demonstrate these traits when we sit in front of the trading screen. Can you adhere to your trading plan and wait for an opportunity to present itself? The answer should be ‘yes’.

Be  honest  with  yourself  and  try  to  form  a  style  of  trading  that  suits  your  character  and purpose. Use  your  trading  plan  to  help  identify  areas  where  you  are  potentially  weak. Structure it to help support these areas when you are trading.
If, for example, you struggle to  cut  your  losses  when  a  trade  is  going  against  you,  then  maybe  defining  a  specific  exit point on your trading plan would be beneficial.

 

3.Risk Management:

Assess  your  risk  management. Never  chase  returns  or  place  too  much  emphasis  on  a particular trade outcome. A losing trade should be a disappointment but not the end of your trading  career. Everyone wants a “get rich quick” scheme but the reality is that, wealth takes   time   to   accumulate.  Remember: slow   incremental   gains   with   good   money management  are  the  keys  to  success. Always  think  in  terms  of  what  you  could  lose,  as opposed to how much you could gain.

 

4.Review Your Trading Strategy:  

Has it come through this type of market before? Is it still generating signals? Is your system mechanical or do you make subjective calls? One key thing to remember is that all 'systems' will generate periods of under-performance. This is true of even the best systems used by top traders. At the end of the day any form of  trading is a numbers game. The objective is to win more frequently than you lose. For  some  systems there  may  even  be  periods  of  not  trading  at  all  until  the  market  criteria that made the system  successful  returns. For  example,  systems  based  solely  on  technical indicators, tend to fair less well during spells of heightened market volatility.

 

5.Money Management:

 As with all trading you should only risk money that you can afford to lose. If placing a trade for  £500  causes  you  to  lose  sleep  at  night,  then  the  chances  are,  you  should  probably  be trading smaller amounts. Similarly, if a particularly high return trade is keeping you glued to your screen 24 hours a day, then maybe you should place it for a lower return in the future.

A  losing  trade  should  give  rise  to  disappointment,  not  devastation. Find  a  level  of  risk  that you are comfortable with and develop a staking plan that will protect your capital following the inevitable losers.

 

6.Remain Mindful Of the Markets:  

Markets  often  work  in  correlation  with  one  another. Forex  pairs  often  work  in  inverse relation  to  each  other. For  instance,  the  EUR/USD  and  the  USD/CHF tend  to  be  inversely correlated,  so  when the  EUR/USD  goes  up,  the  USD/CHF goes  down. A  further  example would be the AUD/USD pair, often referred to as the 'commodity currency,' because of the way in which the pair tracks the Gold price.
By  accounting  for  this  in  your  trading,  you  can  avoid  being overexposed  to  specific  market outcomes. Markets  can and  will often  correlate closely  for  long  periods of time. Beware of placing too much risk across pairs which display similar reactions to market fundamentals.

 

7.Focus:

The trading  world  is  a big  place! With  all the  markets  and opportunities available  it  can  be overwhelming. Find a market (or markets) that you feel comfortable with and keep up with the news flow and what makes it move. You don't have to be rigid on this, but there will be times  when  particular  markets  are  more  attractive  to  trade,  especially  during  periods  of strong  trends. Stick  to  the  major  indices  and  the  big  four  currency  pairs  where  news  flow and  analysis  are  readily available.
Only  look  across  other  markets  as  your  experience, confidence and knowledge grow.

 

8. Adjust Your Trading:

If  your trading  system  is  working  and  your  risk  strategy  is  in place,  start to look  at  yourself for  further  improvements. Psychology  plays a  huge  role  in  trading. By  understanding yourself,  you  will  be  able  to  further  improve  your  trading. Common  mistakes  that  can  be made are trading too much after a loss or too little due to a lack of confidence. 

Try  to  remove  some  of  the  emotion  out  of  your  trading,  especially  when  you  are  trading larger sums. However, don’t jump in too quickly. Earn the right to trade larger amounts and learn to be self critical. Analyse the way you react when a trade is going against you. Do you hold  until the  bitter  end or  jump  ship  too  early?
Note  your  responses  on  your trading plan and be aware of them when, in future, you find yourself in similar situations. If  you have  adjusted  badly  to  the  situation,  try selecting only  your premium  ideas  or  lower your  stake  sizes  to see  if  this  affects  your  mental  well-being. Rebuild  your  confidence. Confidence is good for your trading, over exuberance is not!

 

9. Enjoy Your Profits!

It  is  our  view  that  any  activity  that  you  undertake  in  life  should  be  rewarding.
Fixed  odds trading  is  no  different. Take  some  time  out  to  enjoy  the  profits  you  make. Every  now  and then  take  out  some  of  your  profits. Even  if  you  are  trading  smaller  lots  you  can  still  treat yourself  to  the  latest  DVDs,  some  new  clothes  or  maybe  save  the  money  elsewhere  for something you have always wanted. If you are going to invest your time then you should be rewarded!