Have you ever watched someone(or yourself) trade? At one point did you flinch or twitch an eye because of the amount at risk? Did your heart race faster as the position neared expiration? And was there some sort of relief for you when the position closed in profit? Was it despair when it was a loss? Did you feel the urge to continue regardless of outcome?
If your answer was yes to all of the above then my friend your emotions have put you in a gambling state of mind. Don’t lie to yourself, as long as you cannot detach your emotions from your potential profit you will always fall back to a gambling state of mind. Now if your answer was NO then we would to know what you think about during an open position. I will be sharing what I think about. After months of training I managed to get myself out of the gambling state of mind.
As you can tell it’s not an easy thing but if you follow my easy steps you will be able to control yourself.
- Avoid changing the trade amount. Changing the trade amount every now and then will always drift your focus from the market to your account balance and you realize you probably get happy and reckless when you are winning and return the profits or you become desperate to win when you are loosing. Desperation isn’t good a good thing.
- Have clear achievable daily goals. This will vary with your experience level. For example if you have a $100 account don’t expect to make $1000 in an hour or even a day. A month in this case would be a better target. To validate if my goal is achievable I always consider the risk I can afford to loose per trade, the number of consecutive losses I can have before I blow my account and the number of consecutive wins I require to reach my target. For example using the $100 as my trading account balance my daily goal would be $25 profit. I would take 10% risk( I can loose $10, no problem) which in turn would mean I would only need 4 consecutive wins at at least 75% payout to reach my goal. Based on my trading history 4 consecutive wins is very achievable. Notice if I complete my goal 5 days a week I have $1000 at the end of the month!
- You must have time to watch the chart. Watching the charts (I recommend candlestick charts) enables you to be in sync with the market, price action and since you are not changing your trade amount every time you are quick to respond to opportunities. Remember you only need to watch the charts until you fulfill your goal which can happen in under 10 minutes!!!
- You need an opportunity criteria. It goes without saying that you can’t be guessing. You want to develop a trading pattern of your own or adopt an already existing one. But if you are following signals, any of this does not apply to you, you could be thinking about buggers and still trade successfully.
- Go with your gut. Unlike your mind, your gut is always in sync with the market. The mind likes to think which is terrible in trading. It will remind you of how you felt when you lost/won the last time. You will breed doubt and eventually hesitate and miss the opportunity. After the price goes in the direction you felt it would go, your mind will then beat itself for not taking the trade. So go with your gut first and let the thinking come after you have already entered the position.
I believe number two caries the most weight. Most people loose trading binary options because the are chasing unicorns. So what if some dude on YouTube made $10,000 in 2 hours on a $100 account. You are not them so other than try and replicate their results do your own trading at your own pace. Why is it that they themselves can’t replicate their own results. Think about it, it was a onetime thing but you need a lifetime thing. Class dismissed!