Prepare Yourself for Binary Options Trading
I was relaxing with a drink at my house, imagining the next car brand that I was going to use to paint the town red. This had to be the move to do it. I was trading using a strategy that had worked for me so many times that I had lost count. This time, I was going for the kill and nothing was going to stop me. It was 2AM local time, and although I was sleepy, I couldn’t seem to rest. Several times, the trade went a long way into profit territory and I was tempted to take advantage of the variable option to sell the trade. Then, I decided to double up the trade to stretch the profit. This had to be my trade, based on the strategy that had worked for me so many times before. Then it happened.
In what seemed like seconds, I opened my eyes and looked at the clock in my room. It was 10 in the morning. In part panic and part consternation, I rushed to the computer which had hibernated since, turned it back on and checked my positions. I was alarmed with what I saw. My account balance was half what it was before I entered into what was supposed to be my killer trade. I quickly scanned the charts and found out that my position which had been in profit had reversed wildly against me. In my tired state, I had dozed off on the table where I was watching the charts and did not notice the surprise 75 basis points interest rate cut by the Feds in late January 2008. In one single move, my trade portfolio, which was heavily geared towards the US Dollar, had reversed on me and because I was dead asleep after having had just 9 hours sleep in 3 days, I had lost all the money I had made during my 3-day night vigil. Unfortunately during my trading marathon, I kept opening trades in the same direction when I saw that the original trade was going my way. This heavily increased the risks but all I could think of was the reward. When it all blew up in my face, my dreams of a new car went up in smoke!
Tips for Good Binary Options Trading Preparation
So what went wrong? Oh, what didn’t? Starting with my inability to stop when I was in profit, trading while barely being able to keep my eyes open and basically, my lack of preparation. Knowing what went wrong in the past means you can prepare for it in the future so here are some tips on how to do that:
- Sleep deprivation and trading NEVER go together. A sleep deprived brain cannot think straight, is easily distracted, lacks concentration and is prone to bad judgment. Yes I had made money staying awake for three consecutive nights, but then lost it all on the fourth night. So was it worth it? Nope, so don’t do what I did and make sure you include sleep in your preparation for trading Binary Options.
- Greed. I had several opportunities to take some profits off the table and split. But I got greedy. My dream car kept calling me, talking to me, goading me into staying on for more, and more and just a little more, and yet some more, until I dozed off. An important part of your preparation should be putting together a plan for trading. Don’t just wing it, plan it and then do exactly as you had planned. If your plan tells you that the target for the day is reached, close down your platforms, give yourself a nice pat on the back and go do something else, something fun.
- I forgot a very important trading mantra: anything can happen in an instant. In this case, I got taken out by an unscheduled, surprise FOMC meeting that decided to cut interest rates in the US. Don’t be like that! Always be prepared, be on your toes. As long as you have money in the market (open trades), you are at risk – well, not you, but your wallet – so act accordingly, watch your back. And don’t forget that in trading, watching your back means paying attention to live news feeds, economic calendars, forums, etc.
- Be prepared with some food, coffee, fruits, chocolates – whatever you need to keep yourself fresh. Make sure you bring your snacks with you to your computer station, anything could happen in a minute. Ok, ok you can leave them in the kitchen, just make sure you don’t go out to the grocery store or the supermarket while having open trades. Yea, sure your binary option will expire regardless of you being there or not and you cannot do anything about it (assuming the Close Early is not available anymore). But if something important happens in the market and price changes direction drastically, you can maybe take the opposite trade, hedge the existing one, it depends on that particular situation. Being present when something major happens is the first rule of being prepared.
- Close all unnecessary programs, especially software that requires internet access, or just heavy ones. Make sure your computer runs smooth. Most binary options platforms are web-based, so your internet speed will directly affect the responsiveness of the platform. If you are watching Youtube videos, browsing for cooking recipes and motorcycle parts while opening trades left and right, don’t expect lightning fast speeds.
Binary Option Preparation checklist
1. NOT ENOUGH SLEEP
Body is not enough rested because you have been partying last night and you want to back to trading in the morning but you feel you do not have enough energy. This is just one of the scenarious that could happen. Sleep deprivation and trading binary options is definitely not ok and you will make mistakes. This means that your brain is not energized, therefore it will not function properly and straight – so it is easier to get distracted. Get enough sleep and go back to trading fresh!
2. MORE AND MORE MONEY
Greed is good says Gekko in wall street movie. That might be true since you push yourself to work harder but that does not mean it is also a smart move. In real life it is better that you take profits then be greedy and the trade turns against you – trust me! Stay true to your strategy and rules and get disciplined since this is the only way you will be profitable in long run and that is what you want to achieve even if leave some money on table. It is always better to make something then nothing!
3. ANYTHING CAN HAPPEN
In trading, actually anything can happen in a matter of moments. So if you feel like you are a great trade, why not take the profits. on the other hand, it can happen that you get some surprise by Federal Open Market Committee since they decided to have meeting and therefore cut interest rates in United States. This is just one possible example but do not think it can not happen to you aswell. Be prepared is the key!
4. SMART FOOD
Your lifestyle impacts your trading aswell. You now know that if you are not fresh and have enough energy, you will most likely make mistakes. Therefore it is good that you have some smart food around yourself, atleast some fruits, energy bars or nuts. Some of you are coffee, tea or chocoloate enthusiasts – whatever it will help you be on the alert it is good but try to eat healthy because that is where your body will give you maximum results.
You need to have a clean enviroment as in outside on your desk as in inside on your computer. Clean your desk out of neccesery things and maybe threat yourself with some relaxing music, ambiental to calm yourself down during trading hours. Also clean your desktop and close all the software you do not need at the moment of trading, especially facebook and such. This will just help you to get more into the zone feeling and computer will run more smoothly.
The Bottom line
If you want to be a successful binary options trader, you have to treat this business like a job. Would you go to your job with sandy eyes because you didn’t sleep last night at all? Would you go into office hungry? Would you go without knowing what you have to do and what the plan is for the day? I don’t think you would, so why treat binary options differently? Be rested, well fed, with a clear mind and a clear plan. Be prepared and always try to accumulate new skills