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What Do You Do When You Become a Successful Trader?

Most trading psychology articles focus on traders who are failing, or at the very least, have not succeeded yet. This is for a couple of obvious reasons. The first is that traders who are failing are the ones who traditionally would seem to be in need of help and advice. The second is that at any given time, most traders are failing! Very few binary options traders ever do well for a short time period, let alone an extended one.

But let’s say you actually get to that elusive point of tangible, reliable success. What happens when you finally start achieving consistent profits? At first, you will probably feel like you are still on tenuous footing. You may question whether your success is real. As the months go by though, and your profits remain stable, you may realize you have at last “arrived.”

But what does it mean to say that you have arrived? Is the journey over, or has it just begun? What happens next? Do you just keep doing the same thing every day? Do you rest on your laurels and enjoy your accomplishments, taking a much-needed respite? Or do you try to do something new?

As a trader, you have a certain entrepreneurial spirit which will probably cause you to get impatient as time goes by. You may question whether you are wasting an opportunity if you choose to simply sit on your hands and do the same thing day in and day out, particularly if you are a trader who has learned to ride out your gains. After all, if trading has taught you anything, it is that you need to do everything in your power to maximize your advantage.

When you have an edge, you use it to sharpen another. Otherwise, you are not making the most of it.

What Are Your Options?

So far as I can see it, you have a number of different options at this point for what direction to take your trading career in. Within each of these, you have even more choices and possibilities.

These are not mutually exclusive. You could take one path and then another, or even take on a couple of these simultaneously. I would suggest however that you only tackle one at a time. Why? It is easy to try to run with your success in too many directions at once. If you do this without a plan or try to take on more than you can handle, you can get pulled off course, and your success can turn into failure. What are the advantages of pursuing each of these different courses? Do they have any drawbacks that you should consider before you jump in?

Breaking Down Your Options Once You You Find Success Trading

If you continue doing what you are doing …

This may actually be a good idea, at least temporarily, depending on what you have had to go through to get to where you are at. If your success has been hard-won, you may actually need to give yourself a bit of a break to recover your energies and pick a new direction. If this is the case, try not to get down on yourself about it! You may have an entrepreneurial urge to explore and grow in your trading business, but you also have earned some rest. You have accomplished a great deal to get to this point.

The danger of resting comes when it turns into a permanent state and you are not ready for that. If you actually have your sights set on retirement and you are nearing the amount of money you need for it, by all means, go for it. But if you still have significant financial goals to achieve and you are a long ways off, you do not want to rest on your laurels indefinitely. Eventually you will need to do something more. As a cautionary note, never make the mistake of giving up on your learning process, even if you are simply continuing along for now with what you are doing. You need to continue to learn, because one day your seemingly perfect system will not be performing so perfectly. The only constant in this business of trading is change, and you have to be ready.

If you increase your investment size …

Imagine you have been investing 2.5% of your account this entire time. Maybe you have around $30,000 in your trading account right now. Since you are winning 86% of the time, why should you continue to trade only 2.5% of your current account size? You have no reason to suddenly expect to go losing a bunch of trades, so why not trade 5%? Or why not just add more money to your trading account if you have it, and go on with the same percentage?

Increasing your investment size is not necessarily a bad idea, and does in fact have some merits. You are at a point of time where you are more secure with your trading than you probably have been at any point in the past. If you are going to trade more, now would be the time. You are never completely secure, though, and as I mentioned previously; one of these days the markets are going to change, and you will find your edge has dulled. If you are trading a much higher percentage of your account, you will maximize your exposure. What if the markets then decide to change? You could find yourself taking some heavy losses.

This does not mean not to do it, but I do urge caution if you go this route. If you have the option of adding more to your account, but keeping your investment percentage the same, that is the better approach. Just do not add more money to your account than you can afford to trade without eating into the rest of your financial life. By itself, I do not think increasing investment size is enough. You need to go a step further and expand your strategies and your reach into the markets.

If you diversify …

The next possibility is to diversify. There are so many different ways you can do this. Brett N. Steenbarger, one of my favorite writers on investing, talks about the concepts of first order competence and second order competence in his book, Enhancing Trader Performance: Proven Strategies From the Cutting Edge of Trading Psychology. Essentially, what many traders have is what he calls “first order competence.” They are experts in a single strategy, and have all their eggs in that basket.

First order competence can pay off very well … until it doesn’t. When the markets change, the eggs can fall right out of that basket, and they all can break. This is one of the reasons it is a good idea to diversify. Learn how to use your strategy in different markets and situations. Find out what contexts it does and does not work in, and how you can adapt it to different scenarios with small, simple adjustments. Knowing how to do this as markets continue to transform is what Steenbarger refers to as “second order competence.” Most really successful traders over time have developed some degree of second order competence. It is one of the hardest lessons you will ever learn as a binary options trader.

How can you diversify? There are so many possibilities that you really should have no problem finding something that is accessible to you. To start with, as a binary options trader, you probably have 80+ assets to trade already. If you mostly are focusing on currencies, why not try trading commodities? If you usually trade stocks, why not branch out and try trading indices?

You could also try trading on different timeframes. If your trades usually are in the several-hour expiry range, why not try to see what you can do with trades that last a week, or trades that finish inside the hour? Sometimes these jumps up and down in time do not work out, but other times, you may find that they suit you very well. Who knows—you may even find you look a different time period better. Maybe you have been doing trades that last several days, but try your hand at 60 Second investments, and find out that you do great with them!

You might also try trading in different ways. If you usually place High/Low trades, you may discover that the same system you are using for that can be subtly tweaked to allow you to place profitable One Touch trades. Suddenly you have a ton of new trading opportunities open to you.

Finally, the skills you have developed trading binary options may also be useful trading Forex, stocks, CFDs, or so on. Consider branching out into different types of trading. You may find that you do just as well or even better with other markets. You have already done all the challenging work of developing the mindset and skills that you need to succeed. You may as well reap all the profits you can from that hard work.

If you learn new strategies …

Why force yourself to only place trades according to a single system? While one system that works well is all you really need to excel, having two or three really excellent systems and being an expert in all of them can make you even more profitable. This can be another really great way to diversify. Instead of simply expanding what you trade, you also can expand on how you trade.

If you decide to do this, it is important to stay focused. Never lose sight of the fact that you have a working system that it is bringing in money. It is easy to get sucked into the quest for “more.” You should never for example de-prioritize your central trading method to such an extent that you actually start to sacrifice your expertise by focusing too much on something else. If the markets start to change and your energies are all directed toward developing something new, your competence and your profits can both start to really flag.

If you expand your business …

One last idea is to actually diversify your business operations. You are an expert trader now, and your portfolio is itself a selling point. If you are happy trading for yourself, then that is great—but if you have ever thought of doing something else, you now have the job skills to trade for a firm, manage private accounts, or even become a trading coach. Since there are a pretty finite number of successful retail traders out there, you have a highly competitive resume. There are a lot of ways to make money with trading.

Those are just some of the paths open to you when you start doing well trading and achieve some professional stability. As you can see, there are a lot of directions that you can take your investing career. Whether you decide to continue with your current trading activities without major changes, diversify your trading, or offer services to clients, there are so many exciting possibilities. And the best part is this—since you work for yourself, you get to decide!

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