8 Things Successful Traders Do Differently
Are you struggling to overcome the next hurdle in your trading journey? In binary options trading, at least for traders who are seriously aiming for long-term profitability, there always seems to be another roadblock in the way. Binary options trading is not for the faint of heart. Have an honest discussion with a trading broker and you will find out that the majority of traders lose. And by “majority,” I am not talking about 60% or even 70%. I am talking about 95% or more.
Most binary options traders crash and burn not once, but many times. And over time, the majority will burn out completely and move on to something else. So what are those remaining 5% doing differently than the rest? What makes them succeed where others fail?
1. They keep things simple.
New traders are usually drawn to binary options for reasons of simplicity, which is a good thing. Sometimes, though, novice traders begin trading for the exact opposite reason. They may see trading as a challenge, something complex and technical to master. As such, they may focus their time and attention on mastering every single technical indicator they can find, and may be more interested in boasting the most complicated trading system on the planet than actually making money. Even traders who are not actually attracted to complexity may do this, simply because they mistakenly think they have to.
Yes, binary options trading is more complicated than it first appears. But that does not mean it is actually complicated. It is as simple or complex as you make it, and the most successful traders are usually the ones who keep things simple. Do what you can to remove unnecessary complexities from your decision-making processes. Replace complex systems with a dozen indicators with simple systems with less than half that, and you will probably start seeing better results. Learn how to keep your charts simple.
2. They focus on quality, not quantity.
Do you sit around counting how many trades you managed to make in a month or a week or even a day? Do you look for as many trade opportunities as you can? Or do you focus on the quality of those setups? Would you rather take a dozen “B” setups in a month, or two or three “A” setups?
It can be incredibly tempting to choose the former. Waiting for just a handful of really amazing trade setups can try anyone’s patience, and it is easy to do the incorrect mental math and think that the more trades you take, the more money you will make. Over time, however, you will make far more money if you win 90% of your setups than if you win 60% of them, even if you are taking fewer trades. Do everything you can to not compromise on quality, even if that means forgoing quantity. This is one of the great secrets of successful traders.
3. They use a trading method.
While this is one of the most basic principles of sound trading, a surprising number of binary options traders think it is something optional. Most traders either do not have a trading method at all, or they have one but they do not use it correctly. They may have only a casual, passing understanding of it, and may think they know how to use it when they actually do not. They may have next to no experience, and may never even have conducted any testing. Because the system has had good results for someone else, they may believe that all they have to do is sit down and make decisions based on it, and the system will do all the hard work.
Winners not only use a trading method, but they become experts on every facet of their system. They practice it on hundreds of trades without real money before they ever even think of investing. When they do invest, they make solid, rational decisions based on their systems, their logic, or both. They do not rely on instinct.
4. They invest a small percentage of their account on each trade.
Is a successful trader one who sees a perfect setup, invests 50% of his account, and wins big? It might seem that way at first, especially to that trader. But this is actually a losing trader who simply does not know it yet. The lucky streak might even continue for a little while, but eventually it will turn around. Luck is a double-edged sword. It can cut you just as easily as it rewards you, and where there is good luck, there is also bad. Eventually one of those huge investments is going to go wrong, even if that trader is using a system. And then all of that money is going to be gone, sometimes overnight.
Successful traders are not out there putting down huge amounts of money on their trades. They are not out there betting it all, hoping for the single thrilling trade that changes their life forever. They do not use leverage; in most cases, they reject bonuses and trade without them.
Truly successful traders typically invest incredibly small percentages of their overall bankrolls. “Small” does not mean 10% or even 5%. It means about one to three percent, with most of them considering three to be pushing it. If you have a small bank roll, this is an incredibly miniscule amount of money. But the hard reality is that it is the only way you will ever make it big, and stay on top once you get there.
5. They never stop learning.
Successful binary options traders are akin to professionals in any field who graduate from college, start working a job—and then continue taking classes at the local community college to continuously enhance their skills and build off of what they have learned. This is just another way of riding out your profits and taking advantage of a winning streak to win more. When things are going well, it is not time to rest on your laurels. It is time to build even greater success. The traders that make it are those that take times of success to continue researching, testing, and making small improvements to their systems. They know that a trader’s education is ongoing and never complete.
6. They acknowledge their mistakes.
Everybody makes mistakes, and in trading, you are going to make a lot of them. That is a guarantee no matter what your skill level is or where you are at in your journey. But can you admit to those mistakes? Can you analyze your actions objectively and draw conclusions about your decisions, and recognize the good from the bad? Do you have the personal strength to look in the mirror and see yourself as you truly are?
Good traders are not perfect traders; they are instead those who acknowledge that they sometimes make bad decisions. They do not allow their sense of shame to paralyze them, but they do allow themselves to acknowledge their mistakes and change their behavior for the better. They feel reasonably foolish when they make an error, but have the self-esteem and self-awareness to stand up and make improvements, knowing they will trade better tomorrow if they simply adjust their habits. There is no swifter shortcut to failure than the mistaken belief that a good trader must be perfect and faultless. The only real shame is in allowing yourself to fall victim to self-delusion.
7. They learn about themselves, and not just trading.
Is trading really about charts and profit margins and statistics and price patterns? Or is it about the trader? Binary options trading, like any art form, is a lens through which the trader sees herself. When you trade, your wins and losses, your successes and your failures, will all magnify your strengths and weaknesses and highlight your driving motivations.
Successful traders do not run away from this process, even though it can be an intimidating one. They acknowledge that responsibility for their success rests in their own hands, and that all the tools they use while trading are only as good as the hands that use them. They realize that their money management plan and their trading method will not by themselves bring them the success they are striving for. They find ways to leverage the best qualities in themselves while reining in their shortcomings.
8. They do not trade 24/7.
You might think that the best traders are those who are willing to spend as much time as it takes to become successful, and are willing to put their all into trading. You should put your all into trading in the moment, but you should also limit those moments so that you are not eating into the rest of your life too much. Great traders make sacrifices occasionally when it comes to personal time, but they do not sacrifice their relationships with family and friends. They always remember to keep their financial goals in perspective.
If you are lacking any of these good habits of successful binary options traders, you may find that simply changing your habits is enough to turn your trading life around. Successful binary options traders do not have just some of these habits, they have all of them. These smart choices work together to help you make the best trading decisions day after day, working your way gradually but steadily toward incredible profits.