Psychology in Binary Options Trading

Psychology in tradingI guess most binary options brokers will hate me for saying this (if they read my blog of course), but I think it is important that I share these thoughts with you guys. You should never start trading binary options if you cannot afford your first deposit.

What do I mean by “cannot afford”? I heard many times people saying: lost my job, don’t earn enough, financial crisis is a bitch, lost my savings – should I start trading binary options to make money? My answer to you will be YES, but only if both of the following applies to you:

  • You are ready to invest your time and efforts in learning some strategies of binary options trading.
  • The money that you are going to deposit is not everything that you have.

I would like to emphasize the second bullet. You should never take loans or borrow money from your friend in order to start trading binary options as this liability will be a heavy burden that will get on your way when you start trading.

The thing is, if you start trading with the thought “oh, gosh what am I going to do if I lose this $250 that I have just deposited at binary options account” you will start dealing not only with the financial market, but as well with the psychological pressure and you might start making the wrong choices and get involved in the wrong binary option deals. Pressure and nervousness is no good at trading – your mind should be cold and you should be confident in yourself.

You will start making money on binary options the moment you let all your concerns go and bring your positive attitude. When I started trading binary options, I decided that I will dedicate $1000 to binary options trial – if I lose this money, then let it be; if I manage to get profit on this investment, then I will continue trading and start trying even harder.

Thanks to this approach, I was trading very cautiously, but at the same time, I wasn’t freaking out when the deal was closing out-of-the-money. I was learning on my mistakes and treating them as a positive experience that brought me new knowledge and deeper understanding of the market.

Trading binary options on demo account

Demo accountMany traders want to try BO on demo account before they invest real money in it. My opinion on this is the following: demo is good, BUT… Psychologically you have absolutely different state of mind when you trade on demo and when you trade on real money. Demo account makes you less concentrated and less careful about the deals you are entering into… Thus your trading performance can look poorer than it really can be when you trade on real money accounts.

Moreover, demo accounts stimulate you less to learn from your mistakes as you don’t trat mistakes as seriously as you should be.

Having trader’s journal / diary

trader's journalIf demo account is not such a great tool for your binary options learning, then what is? I personally think that having trader’s journal is a MUST for all the beginners (and not only, by the way). In this journal you should be putting down all the details of each deal that you are entering in and afterwards add comments on why you think this deal was successful or not and what made you make the decision to enter it.

This approach will help you to visualize your binary options trading process and after or week or two you will see some patterns and will be able to really decrease your mistakes amount and increase your profitability. Believe me, it really works and it is as simple as it sounds – you just need a paper and a pen or if you are more of a computer-guy then simple Excel table and your trader’s journal is ready to use.

As always, wishing you a big profit and may a trend be with you =)

Leave a comment

Binary Options TOP Brokers

 Min deposit: $250

 Min deposit: $200

 Min deposit: $100

 Min deposit: $200

 Min deposit: $10

Trading Binary Options

Trending now