How to Approach Losses in Binary Options trading

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How to Approach Losses in Binary Options trading 2018-09-21T18:40:26+00:00

Every South African who trades in Binary Options will attest that not every trade is successful. While investing in Binary Options is a widely profitable investing opportunity growing exponentially in our country, these losses affect the overall performance and confidence of many traders.

With a lack of confidence, a trader is influenced by a personal bias that their trades are going to lose inherently. This is false and can be corrected through studying into aspects of the philosophies of today’s top traders.

With trading comes risk, so brokers and researchers study their assets losses in order to determine what is happening with its price variance. Through these methods they have cultivated multiple market philosophies in terms of how to look at their trades, and how to look at the future of their trading.

Even with the many strategies for trading your options on the market, these personal philosophy influences every experienced trader and brokers in some ways.

Most importantly for South Africans, who have to work through internet exchanges or brokerages, the ability to keep your cool and trade with a stable mind is paramount to your trading success.

Here are a few ways we believe you can do that:-

1) Do not try to make up too much for past losses

With every successful Binary Options trader there come stories of significant losses along their investment journey. These heavy losses leave a dramatic impact on your portfolio and can often set back even the best traders.

Inexperienced traders may try to make up for these losses by taking extra risk on their trades and exposing themselves to more potential failure on the markets, using a mind-state that they wouldn’t of possessed if they did not suffer those losses prior.

This is reflected also in terms of a streak of winning trades, often this events in inexperienced traders conducting more trades with an asset that could be at the end of a high-streak.

2) Reducing the number of your trades

If you are finding that through all of your trading you are generally taking in less profit than you are creating then it is necessary to reduce the number of your trades. Often times this is of no fault to the investor, as they are just experiencing a turbulent market at the time.

Some brokers suggest cutting your overall volume of trades down up to 75%, however in the end the amount you do cut is determined by you.

This reduction will allow you the opportunity to take a look at the overall style of your trades and the effect it has on your account. If you are making trades too quickly and not spending enough time researching the asset for instance, then this would be easily identifiable by taking a look at it and stepping back.

3) Removal of the emotional burden

Trading is an inherently uncomfortable experience, as the chance of your potential loses can often seem to be a hinderance in the psyche of many traders.

Many traders, both invested financially and then personally into an asset, find their trading choices clouded. From concerns about family, to external concerns about the overall trading process, different things can influence your confidence with trading.

Experienced traders know to take a step back from their personal bias and emotions during a trade and take a neutral stance. This means to adopt a lack of emotions of your trades, and not letting the dramatic losses affect you as much.

Many brokers look at losses and wins the same in terms of reactions, with an intelligent analytical mind that is not too heavily shifted by personal feeling.