Trading options, strategies and and psychological comfort.Barry Copeland 26 / February / 20 Visitors: 506
With all its scientificness and objectivity, options trading refers to activities where the human, or rather, the psychological factor, is important. If a trader does not feel comfortable, if he forgets about the strategy, attitudes and rules under the influence of a bad (or good) mood, there can be no talk of success. Each has its own “psychological rules”: I will share my own.
I pause after a series of failures. Three days ended in a minus (this, incidentally, is not so rare)? No need to try to “recoup”, bet huge amounts, think “all or nothing” - all this will inevitably lead to failure, after which it will not work out. Therefore, if I get an unsuccessful week (agreements on Monday, Tuesday and Wednesday turned out to be minus), then I, with a clear conscience, stop trading on this model until next Monday.
Does this rule apply in the opposite direction? So, with too long a series of successes, you can also pause. Well, or not to do it - but never increase the amount of the transaction if you go beyond the rules. Euphoria is no less dangerous for a trader than depression from failure. In a word, less emotion, more logic - and failed trades will forever be a thing of the past!
If I can’t concentrate on work, then I don’t work. The inability to fully immerse yourself in option agreements may be due to various reasons. Illness, problems in my personal life, problems with my main job (if trading is for you (yet?) Only a part-time job ... In any case, it is better to refrain from work if you cannot tune in to it.
There is also a double-edged sword here: too deep immersion in binary options does nothing good. You need to be able to be distracted from work, not to think about work in the moments of rest, not to worry very much in case of failures. Do not confuse the concepts of “living at the expense of trading” (making a living) and “living by trading” (think only of it). The second way leads to rapid emotional exhaustion, which can cause problems with both work and health.
So, I summarize the content of my article. In order to develop a truly profitable strategy when trading binary options, we act in the following order:
- Analyze the market. We track the most important news and be sure to see how traders react to them.
- We look at the chart from expiration 1 day and determine the global market trend, resistance level, support level.
- If we see a real breakdown, we are engaged in the construction of local levels and we are waiting for the entry point.
- On a false breakdown, we act in the same way as on the present.
- You can trade based on Moving Average. We expose five indicators and wait for the moment when they are all directed downwards, and the glides 8 and 21 intersect.
In addition, when trading binary options, we should never forget the most important risk rules.
1. 2 percent of the deposit - per transaction, 20 percent of the deposit - the total amount for the month. Not more! Never!
2. We listen to ourselves and determine our psychological rules.
3. Have a rest.