Why Aren’t You Pulling the Trading Trigger?
Do you freeze when you find a binary options setup? If you don’t enter a trade in time, your window of opportunity can close as the expiry time draws near and the option becomes locked. There is nothing wrong with being a cautious trader, but there is such a thing as being overly cautious. If you don’t pull the trigger when the good setups come along, you can end up reducing or even eliminating your profits. Any good trading system which has good results in testing relies on proper implementation—making the same decisions live you would have made while you were testing. And that includes your trade entries. Nonetheless, numerous traders struggle every day when it comes to “pulling the trigger”—deciding when to get in on the action. Here are some of the reasons.
You Don’t Understand Your Own Entry Signals
This is the number one mechanical reason for second guessing and having difficulty following through when an entry appears. It is not an unusual problem at all, particularly for traders with overly complex systems. Even with simple systems, though, it can be difficult to fully understand your own system. If you have a dozen indicators on your charts, try testing again with a simpler system, like price action. Also learn everything you can about the context of your trades, so you can understand when a signal is in a good location and when a signal is in a poor location.
You Are Gun Shy After Your Losses
Sometimes after a losing streak or a particularly bad loss, you can become “gun shy.” You get scared of pulling the trigger because you are afraid you are going to lose again. If you expect a certain number of lost trades as a percentage and you cannot figure out any way you could have prevented your previous losses using your trading method, then you may want to just accept that you will have some normal losses, and trade as usual. You will probably be fine.
If however you see losses that could have been prevented, consider doing some additional testing. You also should stay alert for whatever caused your error in the future. If you find yourself about to repeat that mistake, then don’t take the bad trade. If however you see a good trade that meets all your entry criteria, there is no reason to sit on the sidelines.
In some situations, you can have an unusually long string of losses while following your system and not understand what is causing the problem. If this happens and it falls outside the realm of what you can expect based on your testing statistics, you should probably take a little break and figure out what has changed. It may have something to do with market conditions, or even something about the way you are approaching your trading on an emotional level.
Fear and Self-Esteem Issues
Fear can be a crippling emotion for a trader. It may stem from bad experiences as discussed above, but sometimes it comes from more nebulous sources. It may even come from poor self-esteem. If you have poor self-confidence, whether with trading alone or with other aspects of your life, then you are definitely going to need to start tackling that. It is a self defeating attitude, and it will often lead to vicious cycles of bad behavior that generates losses, which in turn feeds into the loop.
Boost your self-esteem with this article!
What Should You Do About It? Trust Your System
The answer to all of the issues above is generally this: test, test, and test, and then trust the results of your testing. How much testing is too much? If you develop a reliable method and you prove to yourself that the method works, why should you discount the statistical evidence you have? If you achieve a high win percentage, small losses, and substantial wins, and you can do it over and over again, there is something more than chance at work. Your trading system injects order into a chaotic situation; learn how to do it by clicking this link. That system can lead you right, even when you feel gun shy, and the fact that you did all that work to develop something so profitable should give you self-confidence.