Traders who lose money at binary options have some things in common. Their decisions are based more on emotions than appropriate strategies. Here are some psychological tips a trader must practice to have the right trading mindset and thus put him on the winning side of the market:
• Trading is not gambling, don’t approach it as such. Make sure to study the market before you trade.
• Keep calm and focus in all cases, try to deal with losses and gains with equal calmness, always breathe, take the time to make sound decisions and don’t make loss or gain affect your next trade. You can see your trading money as vacation money: once the vacation is over, your money is spent and you are ok with that – same goes for trading, this will help you deal with the small losses and manage your risk wisely in this business.
• Have realistic goals: write down daily, weekly and monthly goals where you set clear goals on tolerated gains and losses so you avoid greed and don’t fall in the fear of trading.
• Greed is the enemy of traders, don’t be greedy and accept to close trades even on small earnings.
• VERY IMPORTANT: do not trade with money you cannot afford to lose and do not take loans and debt to trade. It is very important to be comfortable with the amount of money you are trading. Consider it as any business investment that might bring you profit or loss. You should be easily able to compensate your loss if they happen.
• Try, learn, and try again: start trading with small amount of money so you can learn about your asset.
• Inform yourself: check trusted financial and economic websites. Read the economic news and the global statements; learn market analysis and indicators, and follow world events. The markets are closed on the weekend – take this opportunity to analyze the markets and the trends of your preferred assets.
If a trader can digest and practice these psychological tips and merge it with an appropriate strategy and money management plan, he/she can eventually become profitable.
Wish you a fruitful trading journey.