The risks and challenges on the way to becoming a professional trader have already been discussed here last week. But being a trader also has advantages. If you are completely committed to the job, work hard and are lucky enough, you can earn a fair amount of money. In addition, traders are self-employed and do not have to be accountable to a supervisor.
Only a small number make it
Estimates assume that around 90 to 95 percent of all prospective traders will fail to trade to live. Private small investors are of course excluded from this statistic. The reasons for this have already been presented. Above all, the high pressure to perform, which has a direct impact on the psyche, is to blame for many miseries. But even lack of specialist knowledge means that people cannot make a living from trading.
With all the pessimism that is spread, the question naturally arises how five to ten percent of traders can still be successful. First of all, it is important to really understand the dangers and risks of trading in all areas. Only those who understand where problems come from can ultimately find solutions. Traders must constantly analyze their actions and also take mental effects into account. Otherwise, there may be a similar phenomenon that is observable among poker players. If they lose a lot of hands, they become emotional - regardless of whether bad luck, chance or bad game are responsible for the loss. Poker players then tend to make aggressive decisions and make big bets to make up for the loss. This rarely leads to success. In such a situation, it can be helpful for poker players and traders alike to pursue a different activity for several hours. Especially sport helps to clear your head.
Dealing with failures
If traders make losses, it does not necessarily have to be because bad decisions have been made. Rather, unforeseen market situations usually result in losses. These can arise within seconds, especially when trading binary options, and are not always predictable even for highly professional traders or institutional investors such as hedge funds. Traders are not allowed to take mistakes personally. Losing trades have to be analyzed, but the analysis can come to the conclusion that the trader's basic strategy was correct.
Traders should also be very physically responsive to losing trades. Take a deep breath and continue your daily life as quickly as possible. In this way, negative emotions and the associated downward spiral can be nipped in the bud.
THE TRUTH ABOUT BINARY OPTIONS
Reacting appropriately to profits
The mental attitude is of fundamental importance even in successful trades. Of course, traders can and should be happy about profits. But here too it is important to start analyzing success as quickly as possible. It is important to find out whether a successful trade is based on pure chance or a well thought-out strategy. If the general strategy is successful, it can sometimes be further improved. On the other hand, random profits should encourage you to change your trading strategy despite supposed success.
It is also important for the mental state not to think too long about the profit and not to react too emotionally. The exhilaration that has arisen can ensure that the next trades are made all too optimistically. This phenomenon can also be observed among poker players. Since luck seems to be on your own side, significantly more hands are played in percentage terms after a big win than before.
In addition to the mental area, of course, also with regard to the Expertise, everything is right to be successful as a trader in the long term. A degree in economics or training in finance is a good basis for the job. After that, it is important to gain as much practical experience as possible. This can be done either through your own actions or by working in a corresponding company. Broker training courses can also be helpful. Webinars and lectures in particular help to expand your own specialist knowledge.