First and foremost, trading binary options is a mental challenge. While every trader should be solely focused on making money, there are many other reasons why people invest in binary options: The adrenaline rush, the desire to do something special, or simply to keep busy. Become a successful trader with the secrets of top traders.
Every successful trader needs to control himself first in order to be successful. While trading approaches and types of traders differ greatly, there are some common rules every successful trader follows.
1. Secrets of top traders: The chart is everything
As a trader you will constantly be confronted with advice from friends, experts, and television and news reports. Ignore them all. The only guiding factor for you decision to invest in a binary option should be the chart and what you see in it. Only you determine whether you expect rising or falling prices or whether you cannot make a prediction for an asset, nobody else.
Still, this does not mean you cannot use fundamental analysis or personal preferences to select a pool of assets you want to trade. If you expect generally rising prices for a stock over the next years, this can be a good basis for you to invest in that stock with binary options.
Your final decision, however, should always be made with technical analysis. If what you see in the chart contradicts your general feeling about an asset, ignore your feelings and believe in the chart. After all, what do your feelings know about investing?
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The only exception for this rule is an unexpected event of exceptional significance. In the first days and weeks after these events, the ramifications of an event such as the terror attacks on the World Trade Center on September, 11 2001 can overshadow the technical predictions generated by the chart.
In a situation like this, it is best to sit out this unpredictable phase and wait for the chart to adjust to the new situation.
2. The trend is your friend
Trends are powerful. As a trader, you should never mess with them. If you want to know what will likely happen to the asset you are currently looking at in the near future, find its main trend for your timeframe.
If there is no currently established trend, but the asset is usually trending, wait for a trend to develop. Times of sideways movement are hard to trade with binary options and require special swing trading techniques . For new to medium experienced traders, both trend followers and swing traders, trending periods are sure to generate higher returns.
3. You are responsible
Before you make any trade, make sure to know why you make the trade. What are you expecting, and why do you think the possible gain is in good relation to the risk of loss? This way, you make sure that every single one of your trading decisions is based on your own expectations and not in the expectations of someone else. When the trade is over and when you have won or lost some money, this will help you to take full responsibility for you success / failure.
Assuming full responsibility is the first step to becoming a better trader. You cannot change what you are not responsible for. Therefore, as long as you attribute your trading decisions to somebody else’s input, you cannot become a better trader. Take full responsibility and you will soon find plenty of areas to improve.
4. Keep a neutral attitude
Emotions distort your view of the market. Emotional trading, therefore, is not based on what the chart tells you. It is based on what you want the chart to tell you. Make a conscious effort to not feel optimistic or pessimistic about an asset and to not be in a greedy, nervous, or pressured state of mind when you trade binary options.
5. Value making money over being right
Subconsciously, many traders feel better about making the right prediction about an asset than about making money. This is dangerous, as it can cause you to stray from your trading strategy. Make sure to stick with your strategy no matter what.
If that means to take a losing trade, so be it. The only important outcome of trading binary options is making money. If that means you will lose half of your trades, it is still better than winning 70 percent of your trades and losing money. In the end, nobody is more right than the trader that made a nice profit this month. This could very easily be you, with these secrets of top traders.