Avoid The Mistakes When Entering to Binary Trading
When a naïve sailor goes to the deep sea, there is a high probability of mistakes. The binary trading arena has evolved over a time, but the mistakes made by the new traders have remained the same throughout. The following text identifies the most common mistakes made by a beginner in the binary trading and how to avoid them.
Missing the purpose
This is one of the most common and most recurring mistakes made by the beginners and even in some cases by the intermediate traders. The naïve traders execute a trade out of compulsion or due to sheer boredom, which sure is going to backfire and make you lose big money. As a beginner, you should never enter a trade without a proper logic behind it. You should also ask yourselves whether your estimation is due to a gut feeling or rational thinking? Are you entering a trade because you are hoping for the best outcome or have you given enough thought to the most likely outcome?
This is not going to give you a winning trade, but will surely reduce your losing trades. This way you can minimize your losses and improve the chances of winning in the trading arena.
I do what my emotions say
The binary options trading is not for the emotional fools and to be a successful trader, you must have rational thinking. The naïve of the binary trading easily gets influenced by what they believe is right rather than what the logic says. The belief might get you some easy trades but the logic will always give you a higher probability of winning.
Also when traders are bored by something they enter into the trading just to change their mood. This is another big mistake which they make as an unplanned trade has the highest probability of losing. So while trading the binary options, just stay clear and stay focused.
I just need one trade to be big
The traders who think that they just need one trade to be a winner, are most likely to end up as a big loser. The history of traders suggests that the people who have made big by trading have made several trades including winning and losing trades, to become a successful trader in a long run. The thinking of one trade makes them invest a big amount in a single trade, and if god forbids the trade turns out to be otherwise, they lose big and then they lose their faith in the trading itself. A thumb rule is that one should never invest more than 5 percent of a total account value in a single trade. This way, the trader will have more chances to trade and hence the higher probability of having a winning trade.
To err is human, but to repeat is stupid
As we all know that as a human we are bound to make mistakes but not learning from the mistakes is the biggest mistake. As a new trader if you have lost your money on some trade using some strategy then you must analyze what went wrong and what was the mistake during that trade? We have been recommending all along to have a trading journal, to keep a note of such mistakes so that you can learn from them and do not repeat in your next trade.
Make it a habit to jot down everything from the winning trades and most importantly from the losing trade, so that you can always go back and evaluate the problem and rectify them not to make the same mistake again.
This is one of the biggest hurdles in becoming a successful trader. You must understand that winning and losing is a part of the trading, and you cannot avoid the losing trades. But losing too many trades in a row can be frustrating and may lead to leaving the trading. By doing so, you will keep yourself away from realizing your ultimate goal. We recommend that whenever you have a bad trade, take a break and evaluate the trade, and before entering again, make sure that you don’t repeat the mistake you had made in the last losing trade.
In the same way as frustration, the new traders get carried away by the winning trades and puts the higher amount to risk on the next trade. This is also not a good tactic, as it might become the losing trade and eventually making a loss for the day. So, you must control your emotions in the trading to realize your ultimate goal of becoming a successful trader over a period of time.
Finally, the above mentioned are some of the major pitfalls where the beginners fall and never get up and hence we recommend you to read the above points again and again until you memorize them, so that you make fewer mistakes and make more gains.