A clear statement of financial goals is the foundation of successful binary options trading. This is where the preparation of a trading plan begins, the most important tool that reflects the personal style of a trader in writing.
If the user does not work systematically, focuses on intuition, mood and other factors, then in the long run it will not be possible to achieve serious results in the binary market.
From this article you will learn the main nuances of drawing up and preparing an effective trading plan.
General requirements
First, we’ll look at the basic guidelines that any competent plan should reflect.
- Write down the main reasons and key tasks that you intend to solve with the help of the binary market. This will help you organize your thoughts and focus on the main thing.
- Think over a measuring scale with which you can easily check the effectiveness of the chosen earning strategy. Most often, there is a separate column for fixing profitable/unprofitable trades and a section for viewing earned profits. It is important here that the trader can easily measure his progress over a fixed period of time (usually the calculation is carried out for a month).
- Separately, highlight the column devoted to financial control. Write down what is the maximum amount of money you can lose in a day.
When the plan is made, do not forget to add comments to each transaction. This will help to identify weaknesses in a timely manner and make appropriate adjustments.
And now let’s move on to a step-by-step system that will help you prepare a high-quality plan and finally deal with the annoying question of how to trade binary options.
Page 1
Indicate the main reason that led you to the binary options market. Finish the sentence: “I want to be a successful trader, because …”. After that, do some introspection. Honestly write down your strengths and weaknesses, as well as the circumstances that can you off and affect the quality of the trading process. For example, one trader with the help of such a simple procedure realized that all his unprofitable days are directly related to lack of sleep.
Page 2
This is where you will define your trading goals. Do not neglect this aspect as it is an important step. Try to be as specific as possible in the following questions:
- How much do you want to earn?
- By what date?
Only by identifying and quantifying your goals will you be able to assess how far you have come.
Page 3
Determine which trading style you will use. You always have several options:
- scalping and intraday trading;
- the use of medium-term systems;
- trading with the expectation of a long-term perspective (here we mean strategies, the expiration date of which may occur in a few weeks or months).
Some traders prefer to stick to one method, others successfully combine different types in one plan. Whichever of the options you prefer, the main thing is that everything is recorded in advance.
Page 4
Select the assets you will work with and set the time frame for the trading day. The more you know about the tool used, the easier and more accurate the forecasting process becomes.
Page 5
Write down the selected trading system step by step. This will allow you to conduct transactions in a semi-automatic mode, without emotions and unnecessary thoughts. Separately, think about your actions at the time of the release of important news.
Page 6
This section should be occupied by money management. In addition to the daily loss rate, you should clearly know:
- How many positions in a row can I open?
- How often will profits be withdrawn?
- What is the minimum amount for which the deposit should be replenished?
- How will the earned funds be distributed?
- What measures should be taken if the month/quarter/year turns out to be unprofitable?
Risk management is the most important aspect of your trading plan. Therefore, think carefully about every detail.
Page 7
Determine the period when you will not trade. For example, before the New Year, when the market situation is unstable, many traders take a month’s vacation.
Page 8
Display the results that the selected strategy showed during the testing period. Take screenshots and add comments to closed positions. If you want to improve your trading algorithm over time, this section will be especially useful.
Page 9
Binary options brokers can have a significant impact on the quality of transactions. Therefore, it is important to cooperate only with trusted companies. Here are some great options:
We have considered a far from exhaustive list of pages that a professional trading plan should display. Everything else depends on perseverance and your desire to be a system trader.
P.S. Friends, what points does your personal plan contain? Don’t forget to share your experience in the comments.
Tagged with: Binary Options Academy
