When creating a business or doing effective actions, you should also think about a plan. Without the right direction and understanding of how to make money, your business is doomed to failure. Similarly, binary options trading. After you have collected all your resources: knowledge, time, experience, you invest in yourself with the hope of earning and profiting from your actions in the financial market.
Constant earnings are not an accident. This is work according to the rules and, most importantly, according to the plan, which excludes completely rash actions.
Benefits of Scheduling
By creating a plan, you leave your emotions aside. Seeing on the platform how you go into the red or get high profits, you remain calm and in control of your actions and decisions. A trading plan shows you exactly how to behave in each situation and allows you to control everything. Using the plan in binary options trading, you limit yourself from risks. And the ability to participate in multi-trades (several transactions at the same time). The main task in planning and analysis is to understand exactly what works and what doesn’t. By drawing the right conclusions, you will be able to improve your results and reach constant earnings.
Before you start trading
To create an effective trading plan, you need to consider several issues:
Which type of trading suits you best?
It depends on what you prefer: consistency and less risk, or vice versa, you can act quickly, which option to choose and what strategies to use, how to build your plan and how much to start with. What trading instruments do you want to trade: Binary options, Forex, stocks or contracts, each instrument has its own characteristics.
What are your goals?
The definition of goals is the main thing that can affect the planning of trades, because The goal may be different. Some work to accelerate the deposit or to work out the bonus. The amount you want to earn is also different (best defined as a percentage of the deposit). The trading strategy, the constancy of transactions, and the trading plan itself depend on your goal.
Rules for opening a transaction
There are many profitable binary options strategies, you can create your own binary strategy. Having decided on your strategy, you have accurately determined the points and moments of entry into the transaction. Your plan must have a rule for opening a position. Your entry rules indicate what criteria should be present in the market at the moment. Here are some questions to ask before entering a trade:
- Has your indicator really reached the indicators you have defined?
- On which chart should the signal appear?
- On what time formats do you decide to open a deal?
- What criteria will cancel the deal or postpone it (for example, the release of economic news)?
Decide on a strategy, and determine how you will enter binary trading.
Rules for exiting a trade (closing a position)
Closing a trade is one of the most important points when planning binary trades. After all, how much you can earn or lose depends on it, so the rule for exiting a trade should be accurately spelled out in your plan.
If you trade binary options, your losses and gains are fixed. In the plan, it is necessary to prescribe stop losses, maximum losses, as well as profit. Determine the goal of earnings, often increasing it increases the risks. The exit point should be determined by the strategy and the planned system.
Financial management
Financial management refers to risk management. You should have exactly how much you will risk in the transaction and trading. The level of losses must be determined from the very beginning. Having made several trades in the red, you will immediately understand the effectiveness of a particular binary strategy. By determining the percentage of risk, you will be able to calculate the required amount for initial trades, you will be able to calculate the number of trades during the trading session and reduce the risk. Every binary options strategy should take into account risk and money management according to the percentage of negative trades.
Conclusion
Drawing up a trading plan for binary options trading takes time. However, this effort will save the trader from losing the deposit and reduce the risks. If you have unfinished or uncertain points in the trading plan, go back and complete them. Bidding according to the plan neutralizes psychological pressure, which leads to “DISCIPLINED TRADING” and makes the amateur a real professional trader. Invest your time in planning as much as in the bidding itself.
After the plan is made, decide on the choice of a reliable broker for trading, using the rating of brokers.
