Binary options trading is accompanied by stress and high mental and moral
stress
. Traders start playing instead of trading. Turning binary options trading, with a clearly defined plan, into a casino, where often the result depends only on luck.
When a trader is loaded with other work, and trading becomes secondary, a trading recession occurs. The stage when the trader is engaged in trading as some kind of increase, but not work. With full attention and attitude to her. The main problem of such situations is a complete loss of control over oneself and trading. This always leads to the loss of the deposit.
When should I take a break from binary options trading?
- Stress caused by the expectation of earnings – novice traders expect to receive earnings in the first week of trading, in the second they want a good car and a new house. However, making money with binary options is a job. Hard and daily work. It is not possible for a novice trader to get a result in one day. Frustrated, novice binaries increase the pace of trading. No plan, no preparation, and no knowledge. This leads to the loss of the deposit. Usually, these people leave the auction.
- The stress caused by the loss of a large amount or the initial deposit – by making an initial deposit and starting trading, traders do not always immediately earn. The loss of the deposit leads them to a state of disappointment in which they simply give up. This condition can be caused by the loss of the deposit after a series of successful trades. Loss makes you want to recoup. Since the trader has already seen that he can earn. It turns into a simple casino.
- Trading on emotions – usually when we are too emotional, we cannot make rational decisions.
How to avoid losses during stress or emotional affect?
The best way not to lose yourself as a trader or at least not to lose a deposit is to make a PAUSE in trading. It will just turn off for a while. For some it will be a day, for another a week. It is important to learn how to disconnect and learn how to recover. After all, losses and defeats often accompany binary options traders. For this, risk management and trading psychology are used.
But to pause and then return immediately to the auction is not entirely correct. Professional options traders or in general in the securities market use step-by-step entry and return: The trader does
the work on mistakes
. Which is divided into two parts. The purpose of which is tolimit a technical error. Something that led to the loss. The second goal, in my opinion more important, is to determine the moment of loss of control over trading, and yourself . The moment when the trader became a player. Having determined this, you will be able to find signs that in the raging will help you determine your emotional state in advance, and not repeat the mistakes.
- Search for trading moments without bidding. This is done in order to return to trading gradually.
- Planning and tracking work according to the plan without bidding. Allows the trader to cultivate discipline to comply with the rules.
Market Analysis & Planning Start of Live Trading The whole process can take anywhere from a week to two. If you do everything right, you can educate yourself as a trader. It must be remembered that emotional mistakes are the most dangerous.
Conclusion:
If a trader cannot make a rational decision and
cannot control his emotions, you need to pause.
Relax and reconsider actions. Find what led to the error and how to fix it. They don’t become professionals in a straight line. There will always be ups and downs. The main thing to remember is that you have to learn from mistakes, and that every mistake costs money.
Tagged with: The Psychology of Binary Options Trading
