Having chosen a binary broker and made a deposit, a trader, starting to trade in the financial markets, must be mentally prepared to start trading. The main reason for losing a deposit is inconstancy and loss of control over your emotions. The rules of trading say that trading is required, excluding all emotions and feelings. Decisions must be made rationally!
It is not uncommon for traders to lose a deposit just because they succumb to weakness and emotions. They tried to “recoup” or were in a hurry to earn a million in a second. After that, they blame the broker for their results. Almost all licensed binary options brokers do not affect the outcome of trades.
Emotions while trading binary options
Binary options trading is a decision-making process based on the analysis of price indicators. In turn, analyzing the movement of an asset and making a decision to act is based solely on data, not feelings. To eliminate feelings (emotions), you need to learn risk management and train yourself to work in a state of tension.
The task at the beginning of trading is to learn how to control your emotions and manage your feelings. The moral endurance of a trader during trading is formed by stressful situations that entail stress and fear, and, accordingly, irrational decisions.
The Importance of Psychological Control in Financial Trading
Dr. Van Tharp is known for breaking down the trading process into three categories that affect traders’ results. He described their importance as follows:
- Trading Strategy (10%)
- Money management (30%)
- Psychology (60%)
According to Tharp’s theory, a person’s psychological views and way of thinking in trading are the most important factor in success.
The main emotions that influence binary options trading are greed, fear and ego.
Fear of losing a deposit can lead to further losses due to uncertainty about transactions and making hasty decisions
Greed leads to attempts to make too much profit and ends up with less.
Trader’s Denial of Mistakes – A trader who is influenced by him will never admit his mistakes. In binary options trading, you need to learn from mistakes, they are expensive.
Trading for revenge is chasing the money you lost on a trade.
If every trader tries to analyze all their trades
, then 98% will understand that they made decisions without relying on analysis 100%.
These are the psychological factors that affect the loss of capital.
Knowing how your condition can affect your results, avoid trading during an unstable psychological state.
There is a demo account effect. After long trading on a demo account, a trader weans himself from risks. It is better to trade with a minimum deposit with a binary broker than to sit on a demo for half a year.
Trade without emotions with the best broker.
