Thanks to its simplicity and the fact that it is available all over the world, many people decided to start earning through binary trading. There are many traders who used to trade on stocks on Forex markets who have switched to trading binary options. Also, many of those who have just entered the online trading world started with binary options. This is because it is much simpler than any other trading – at least in the beginning.
If you intend to become a serious and devoted binary trader, it is not nearly enough to simply click “Call” or “Put” on the platform and hope for the best. You need to develop your trading plan and strategy and stick to them.
Why it is important
Trading plan is something that brings you discipline and security in your binary trading. You will never hear a successful trader that he trades by lucky guessing and randomly investing the money. That would be gambling, ant this is not what you are aiming for.
Trading plan helps you stay focused and disciplined. It serves to minimize your loss and maximize the profit, and you should stick to it if you really want to succeed.
Another advantage is that it resolves you from emotional decision making. Decisions you make under emotional influence or stress can be harmful in many situations, and in trading they cause you to lose more money than you can afford. If you develop a trading plan and trade according to it, it will help you control emotions and avoid their influence on your decisions.
Choice of assets and expiry times
Before you start trading, you need to understand how the market works and how and when its movements occur. According to this, you should choose the assets you want to trade and the expiry times to set. For example, stocks and commodities move slower on the market, and fluctuations are not common and dramatic. This is why longer expiry periods are suitable if you trade these assets. Forex and indices are dynamic and fast-changing, so they are better for 30 or 60-second options.
In order to minimize the loss, you should determine the exit strategy. Not all brokers offer this option, but there are some brokers which provide their traders with this opportunity. If you see that the asset goes the opposite direction from the one you predicted, you can make an early exit. This way you will still lose some money, but the loss will be significantly smaller than it would if the trade ended out of money. You should include this in your trading plan and determine when and how many times you can use this strategy.
If you plan to use binary robots, you should also include them in your trading strategy. You should give the robot parameters you use when you trade on your own. Some automated systems offer you a lot of parameters to set. Therefore, you can personalize the automatic trading even though you do not execute it, so it will be performed according to your plan and your preferences. Find out the best at Top 10 Binary Strategy.