Many are wondering whether trading binary options is really as simple and simple as one can hear and read more in the media. We have often pointed out that trading, regardless of which product, is complex and not suitable for everyone. Ad banners depicting people doing side-by-side trading are over the top and far from reality.
Trading is particularly suitable for those who can keep themselves emotionally under control. So the first step would be to find out if you belong to this type of person.
Step: How emotional are you?
To be successful as a trader To be able to act you have to be able to deal with losses. Not everyone feels the loss of money the same way. And this feeling does not always have anything to do with the amount of capital. Of course, a rich person will be better able to cope with the loss in a certain way, but his perception must not be less bad. Because the loss is also reflected in the self-confidence.
Many losses in a row give the trader the feeling of inability. The more losses he suffers, the more he doubts his assessment. Media that also suggest the success of others do the rest.
Therefore, the first step is primarily to recognize how well you deal with such situations. There are quite a few retailers who throw in the towel after a month or two because they have realized that it is not for them, not because the capital is gone. And that's the smart way in most cases. But there are traders who lose money over and over again and learn nothing from it. That is the other way.
Step: Do you know your comfort zone?
The term comfort zone describes a state in which an individual feels comfortable. Leaving the comfort zone means for people to break out of their habits and thus expose themselves to a feeling of discomfort. Trading is often about finding your comfort zone first - and there are also emotional reasons.
As already explained above, everyone reacts to the loss in different ways. 1,000 euros is painful for some, but not for others. However, the loss size is something that can be controlled via risk management. Finding your comfort zone therefore means recognizing the amount at which you react less emotionally to losses.
That sounds a bit illogical, because losses are never positive. But in order to make his decisions free from any fear of loss, the emotional comfort zone must be protected in any case. Of course there is nothing to be said against expanding this comfort zone over time, but this has more to do with experience and knowledge. These factors can provide additional security and thus emotional strength.
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Are you ready to act in a disciplined manner?
Finding your comfort zone shouldn't be difficult as a rule. Preserving this is somewhat more complicated, however, because fear of loss can be overlaid by other emotions, such as arrogance. If the trader has two wins in a row, he usually forgets his comfort zone because profits feel very good.
In this case, he leaves the comfort zone and raises his bets. It is obvious that the whole thing will not turn out well, because a losing trade with a higher stake strikes the trader emotionally with double strength.
The third step is therefore to maintain the comfort zone for so long, until you have a lot more on the box in terms of experience. And that requires discipline. Being disciplined and keeping emotions in check goes hand in hand.
But how do you learn to be disciplined? There are several possibilities for that. One of the simplest is time management. Many traders fail to distinguish between trading for fun and trading for business. They start as a leisure activity, but react very seriously to losses. That doesn't quite fit.
If you plan your trades meticulously, for example executing a maximum of two trades at certain times each day and sticking to them consistently, you will notice that this planning has the effect of habit. The trader avoids over-trading and learns to be patient at the same time.
How you turn it around, you are clearly in an emotional cycle when you trade operates. The basis is the personal attitude to the amount of the losses and how to deal with them. Prospective traders should never leave the comfort zone unless experience and knowledge put the uncertainty into perspective. Even professionals rarely leave or expand their comfort zone.
Discipline is the tool with which you secure the comfort zone. There are many ways to discipline yourself, but one of the safest is to plan trades based on time, investment and risk. Discipline should lead you to get used to certain processes and thus it becomes easier and easier to adhere to these processes over time.
With the Broker 24Option for binary options, beginners should try the three steps to trading But of course keep in mind that trading is always associated with a risk.