Even with a good strategy, psychology remains a fundamental aspect of a trader’s figure.
As per its title, this blog wants to focus on binary options as far trading strategies are concerned.To invest in binary options trading without a strategy means to place a blind bet relying only on luck. It is therefore vital to take to one’s trading with a solid, proven strategy; to apply such a strategy, however, high levels of self-control are absolutely necessary.
A trader gets up in the morning, has breakfast, washes up, gets dressed, and goes to his computer. He scopes markets’ situations and is ready to invest; he starts earning thanks to his strategy. This, at least, is the ideal picture. Let’s examine an identical situation, where we’ll only modify the latter parameter: “he starts earning.” Let’s say our trader’s session doesn’t begin so splendidly. Let’s say he loses some. Let’s say his first investment goes badly, and so does his second investment. The first thought that runs through our trader’s mind is, “My strategy is no good.” Such thinking is incorrect. If a strategy has previously given us great results, it will still be a good strategy, even when we lose. If our investments are not performing well, it means that we are doing something wrong. What could that be?
Usually, we’re applying a wrong psychological approach towards the strategy. The first thing that happens to a trader when his investments are going badly is that he wants to put a remedy to that right away; he wants to re-validate himself and re-gain his losses, and therefore he attempts to modify one of the key parameters in his proven strategy money management. He begins to invest amounts of money that were not originally part of his strategy’s plans. This is a mistake.
This is where psychology becomes our most effective weapon. Self-control is vital. We need to approach the issue objectively, with no panic. We need to be ready and willing to say, “That’s enough for today.” This kind of self-control is vital to any successful traders. A good strategy does not necessarily guarantee success; it’s a method which we have found can give us gainful profit in time. This means that losses are part of the game and our best weapon to face them is our psychological approach. When trading binary options trading especially is involved, one must be cold, detached; during a trading session, however long it may be, we mustn’t be overwhelmed either by gains or losses. Only when we decide to put an end to the session we can allow ourselves to analyze our trading day. If you can’t approach trading with such an attitude, then maybe it’s not the best choice for you.
It is more likely that you’ll be in control of yourself if you make sure to reserve only extra amounts of money to trading never invest sums that are essential to your everyday life. If you invest a sum of money that might be useful for primary expenses, you are already losing.