6 Binary Options Mistakes to Stop Making Right Now
Do you sometimes feel like you are running in circles and not really getting anywhere with your trading? Binary options traders often fall into cycles of losses which never seem to end. You might swing wildly between confidence one day and despair the next as you watch your wins and losses stack up seemingly without rhyme or reason. If you are starting to feel like your winnings are at the whims of chance, it may be because you are placing yourself in that position. Here are 6 common mistakes you should stop making right now to get back on track.
- Trading emotionally.
Whenever you find yourself in a loop, there is a pretty good chance you are trading emotionally. Are you angry when you trade, or afraid? Do you hold back out of trepidation when you spot a trading opportunity only to realize later that you missed out because you were still holding onto a past failure? Or do you trade when your confidence is sky high, so high that you think that you are infallible?
Emotional trading is a recipe for disaster. When you trade based on your feelings, you enter into feedback cycles. Your fear or anger (or even your overconfidence) can drive you into losses which fuel further emotional trading. Trying to “get back at the market” is a common response in situations like this. Next time you find yourself trying to “get it all back,” stop and take a deep breath, and look at what you are doing. Decide here and now that you will not trade based on your emotions in the future. It does not mean you have to eliminate them completely—just do not base your trading off of them.
Did you trade emotionally and now you’ve lost big? Find out how to recover.
- Varying trade amounts at random.
Do you trade a lot more on trades you are confident about than those you are not? If so, why are you even taking trades which you are not confident about in the first place? You should only be taking trades that you really believe in. As such, there is no reason to arbitrarily vary your trade amounts. You should be investing the same percentage on every trade. This has the effect of preventing you from taking trades that are less than ideal, and also keeps you from losing large arbitrary amounts of money. Choose a small, reasonable percentage and stick with it—and only take the best trades.
- Resisting change.
One of the most challenging aspects of not only binary options trading, but life altogether, is adaptability in the face of change. When you find something that works for a while, you can become comfortable with it. This becomes a problem when comfort converts into complacency. When you are complacent, you are resistant to change. You cling to old methods when new techniques would work better. Instead of allowing your trading method—and yourself—evolve to meet different market conditions, you rigidly stick with what you know, even when what you know no longer works.
The most important skill you can ever learn in any business is adaptability. Adaptability allows you to succeed in a world where change and unpredictability reign. It will be challenging at first to get out of a rigid mindset. You may feel like you are never safe and like the changes you make could make things worse. But eventually you will learn to take pride in your adaptability. Your fluid responses will become something that you enjoy. You will operate on a different level than you did in the past.
If you are clinging to past performance and refusing to consider changes to your trading methodology or your frame of mind, this is the time to take the courage to make a leap of faith. There is nothing you can do to prevent changes from unfolding around you. Market contexts will continuously transform. The basic principles you learned still apply, though. Once you are willing to learn how to adapt those principles, you will start seeing improvements in your mindset and your profit margin.
Use resources to keep you up to date with the changing binary options times.
- Trading real money when you are not meeting your profit goals.
Another mistake you should stop making is trading with real money when you are falling short of your profit goals. If there is a problem with your trading, you are only going to make it worse by pressing on. You will damage your confidence and empty your wallet by trying to tackle it while trading with real money. Decide right now that you will return to demo and not start trading again with real money until you are once more meeting your profit goals, even if you are only meeting them with virtual money to start with.
Removing real money from the equation is critical when you are struggling. It takes a lot of the pressure off and allows you to think more clearly. And in a sense, demo testing is like breaking even on every trade, which is far better than letting your account drift further into the red.
- Isolating yourself.
Another major mistake is to keep acting like you are alone in a vacuum and nobody is there to help you improve your trading. Stop trying to do everything on your own. There are thousands of traders out there who are smart, friendly, and willing to lend a helping hand. Leverage their knowledge and let them know about your problems. You will probably be surprised at how quickly traders online are ready to step in and help you figure out what is going wrong. When you make the choice to surround yourself with positive, helpful people, you are already taking a step toward improving your trading.
Another question to ask yourself related to isolation is whether you are also isolating yourself from friends and family members. Trading is a very involved art form which requires a huge amount of time and effort. As such, you may find yourself spending all of your time in front of your computer. Isolating yourself from the important people in your life can have a damaging effect on your relationships and your state of mind. Those people are there to help you succeed, but only if you are there for them, too.
- Ignoring your day-to-day needs.
Also related to the above point, another mistake you should stop making right now is elevating trading above all your other day to day priorities. Are you going without sleep for the sake of trading? Are you forgetting to take some time off each week for leisure? You may think that rest and fun are sacrifices you need to make to succeed, but in reality, this is a major mistake. Eventually, you will burn out, and you may be burning out already. When you do not make time for a balanced, healthy life, you reduce the efficiency of body and mind. There is also a cost on your spirit—those things in your life which you love and which give you a reason to live and to profit.
Sometimes when we are struggling, we lose sight of the mistakes we are making. These mistakes are very common among newbies, and even veteran traders may struggle with them. If you are making any of these errors right now, resolve to stop and get yourself back on the course of success through positive, healthy choices.