Sometimes some things look easy from a farther view but coming closer to it, the reality shocks many. An opportunity missed, a prediction gone wrong, unfavorable moments are sentences that often cross the paths of many traders. Putting everything onto destiny will not transform your current bearish position to a more bullish one.
"Oh! I missed that opportunity! I could have earned so much of profit"-but are you sure you could have really gained that profit? A glance at a chart cannot provide you with information on how to trade and trends will not favor every time. This is the binary options trading market, where every now and then market trends change. However, many traders have become extremely rich by predicting the right CALL or PUT action, therefore, how come some traders find it difficult to make consistent money is day-trading?
In day-trading, investors try to copy and act according to others or prefer to think that trends will favor them ignorant of the market patterns. It is sure that is takes time to grasp the market, but there are many other factors that have grabbed the attention of analysts and they are sure that these little mistakes are the reasons why many traders fail to generate consistent money.
The mental state of traders when they trade is very important for the proper functioning of trading. Discipline and risk-taking are both important elements of trading just as knowledge, experience and skills. Psychology of a trader is quite critical to how the trading turns out to be and what outcomes the trader is expecting.
Fear and greed are the most important emotions related to trading and in this blog the part of self control and over trading shall be tackled. Other emotions related to trading are hope and regret which can take a serious toll on a trader's behavior and his psychology. Setting your limits shall be of utmost importance for most traders since certain emotions adversely govern the way a trader trades.
Day-Trading looks easy
Day trading looks really easy but many of those who either succeed or fail will not divulge the actual reason to do so. There are many odds against which many traders shall be against and the path is not as easy as it seems. Statistics show that around 90 percent of people who trade fail at day trading.
Lack of self-control during day-trading
As difficult as it may sound to earn sound profits in day-trading, another aspect of this type of trading also gives birth to uncontrollable traders. Some traders go beyond their means and their own capacity to evolve in a world that if often prone by majority losses and misinformation.
Over-trading often results from a lack of self control and very often leads to an immune state of trading. Yes, the trader might be trading because he has the addiction of trading but it does not really imply a sound and verified trading. These kinds of traders start to trade from the morning and continue until the afternoon. They cannot resist from placing a trade and the most difficult part is that they know they do over-trade but cannot stop themselves.
As and when opportunities set up for trade, they jump to that without really calculating the outcome or checking the market trends. These traders should set their agenda in a way that they are able to give the right focus for a given period of time. Taking breaks in between trading sessions will be a real advantage here. They need to be patient and selective and not jump onto any trade without proper reflection. Distribute proper energy levels so as to minimize risks and unnecessary losses.
Stick to Strategies and plans
Learn and understand where your niche in trading lies. It is very important to keep a plan ready for every step taken in binary options and sticking to that very plan and strategy, is important. But how do you know what should be your plan as a trader? Which strategy should you use?
As a trader, you should know how well is your performance in your trading sessions. A trader should be able to analyze his errors and take the responsibility for them. If you ignore your errors, this will be the biggest mistake ever. Categorize yourself! Know whether you belong to the Beginners, intermediate or advanced class in Binary options. When you are sure that you belong to a certain level of binary options then only should you know what to do and how to proceed. Each and every level in binary options has their own set of priorities and strategies. This is the only way for you to know which are those strategies that you should use.
How far can u stick to your own strategies? Stick to them as far as you can. Implement them at the right time and see how your luck in trading changes. If a trader does not possess a well defined plan, then it will be difficult for him to generate the expected returns. Planning is a very important aspect of trading.
- trading days
- exact amount of time dedicated to trading
- return on investment
- broker's information
- amount of fundamental data that might affect the market
Thus, trading psychology is an integral part of binary options since humans cannot be devoid of emotions. A trader should learn to differentiate the positive from the negative aspects of trading. Turning a blind eye to existing woes will further worsen the way a trader trades and do not forget that it will also bring his return on investment low.