In the binary market, there is no need for a trader to hold a position for too long. Profit can be made here and now. On the one hand, this is an advantage, but if we consider the issue from a different angle, then a problem arises – it is necessary to trade often.
In this article, you will learn how to make money on options for a beginner. More precisely, here we will consider the key errors, the correction of which will allow you to progress.
Failure to limit losses
A good trader easily tolerates small losses. This allows you to concentrate, not think about defeat and strictly follow the rules of the strategy.
Any negative trade can paralyze a beginner (not to mention a losing streak). However, instead of stopping and reconsidering the situation, such a person will continue to trade and empty his capital.
Solution: write down the maximum amount in the trading plan, losing which you will be forced to close the chart and move away from the monitor.
Intuitive style
To cope with the previous problem, it is enough to make only one entry. The difficulty is that most representatives of the binary market do not keep a trading diary. They know roughly what to do and how to do it, and therefore get the appropriate results. This is called relying on intuition (good quality, but not for trading).
Task: buy a notebook and record every transaction in it from now on.
Focus on quantity
When a novice trader makes his first money in the market, regardless of the income received, he wants more. This encourages the choice of aggressive strategies, where more than ten trades can be carried out in one day.
Unfortunately, only with experience comes a real realization of a simple rule: quality is much more important than quantity.
Experiment: try to open 20-50 trades a day on a demo account. Repeat the procedure for a week. Look at the result and draw a conclusion about the appropriateness of this approach.
Inner doubt
Has a similar situation ever happened to you:
- you have conducted an analysis and identified the key directions in which the market will move today;
- Before implementing the plan, you look at some professional forecast and find that it does not fit your scenario;
- you change tactics and lose;
- The price moves according to your primary scenario.
Binary market analysts can be compared to weather forecasters: no matter how many experts predict the heat, if it rains, no one will stop the process.
Solution: Stop reading forecasts and always act on your own plan.
Lack of preparation
Opening a trade is just a puzzle of the general mosaic, which is called success on binary options. Almost all beginners focus on this point, ignoring home training (developing a scenario that will take the day).
Task: Develop the habit of analyzing the market on a daily basis and systematizing your ideas. Before the start of the trading day, you must clearly know under what conditions you will be: trade, rest, take profits, stop watching the chart.
Negative diversification
Using multiple tools is a great strategy that beginners abuse. Let’s compare two traders.
1st 2nd
At the same time, he uses three strategies. One strategy.
It trades on 5 assets. One asset.
Opens positions on M1, M5, H1 and H4. One timeframe.
Considering that both users started from scratch, which one do you think has a better chance of getting results?
Experiment: Use as many trading techniques, assets, and timeframes as possible within one week. For the next week, concentrate on one tool. Evaluate the result (to avoid financial losses, use a demo account).
Re-evaluation of opportunities
A sense of arrogance always leads to uncontrollable risk. Therefore, if you have closed several successful deals, congratulate yourself and tune in for further work.
If you can’t cope with the euphoria right away, take a short vacation. Return to the charts only when you are able to think sensibly (evaluate the transaction from the position of risk / reward, and not trade on the principle of luck / unlucky).
Cooperation with unreliable companies
If the service provided by binary options brokers does not correspond to modern standards, then here is just a small list of problems that await you:
untimely opening of a transaction;
missed expiration dates;
Changes in trading conditions at any stage of cooperation.
The good news is that this is the only error that is easy to fix. To do this, it is enough to use the services of trusted brokers. Here are some good options:
Let’s summarize. Here is a complete list of mistakes that cause binary options trading to fail.
1. Failure to limit losses.
2. Intuitive style.
3. Emphasis on quantity.
4. Internal doubt.
5. Lack of preparation.
6. Negative diversification.
7. Reassessment of opportunities.
8. Cooperation with unreliable companies.
How to use the knowledge gained? You have three options:
1) close the page and do nothing;
2) find your mistakes in this list, close the page and do nothing;
3) highlight your mistakes, develop a plan to neutralize them and immediately begin to implement it.
Friends, which option do you choose? Please share your experience in the comments.
Read all articles on the psychology of trading in financial markets
