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Psychological mistakes of a binary options trader: psychological mistakes in trading BO

Psychological mistakes of a binary options trader: psychological mistakes in trading BO

Good afternoon, friends!
Every beginner, experienced and even professional trader makes psychological mistakes. But if a professional makes these mistakes very rarely, and he gets out of the situation thanks to steel trading discipline and trading plan, then the novice trader makes psychological mistakes at every step.

These errors very often lead to the loss of a deposit, and everything that is on the trader’s trading account is lost. Each of you should be prepared for your own psychological mistakes and know how to avoid them. This is exactly what I will tell you about today.

A novice trader does not want to learn how to trade Binary Options

I am sure that 98% of all traders came to Binary Options trading because they were promised easy and fast money - press the red and green button. What turned out to be the case? It turns out that trading needs to be learned! Moreover, studying takes a very long time - from half a year to several years.

This somehow doesn’t fit into the understanding of easy money, right? The training itself is incredibly difficult, it involves not only reading books, watching videos, but it is also necessary to change yourself to be able to trade. Few people will want to change themselves, so ideal and knowing everything. And all this training is complete nonsense. You can continue to press the buttons to open trades, drink beer, and chat with friends via video conference while trading. Trading is easy!

reluctance to learn binary options trading

Every novice trader faces a problem, or rather, a reluctance to learn to trade. For some reason, everyone thinks that anyone can handle trading. Moreover, these same people deny reality - tell them that 95% of traders consistently lose their money, so they will confidently say that without much effort they will fall into these 5% lucky ones, they are “not sheep, like everyone else!”

Needless to say, these are the favorite clients of any Binary Options broker - what could be sweeter than a fool who carries his own money, and even refuses to change anything?! I, as an experienced trader (I have not yet reached the level of a professional - at least, I do not feel like a professional), who lives from trading Binary Options, do not care at all whether you start learning to trade or continue to rely only on your luck. I will make my money regardless of whether you become excellent at trading or continue to lose money, so you should be the one interested in your trading education!

Adaptation to the market while trading on BO

Okay, let's say you're not one of the stupid traders who don't understand why you need to learn to trade - you understand the seriousness of the situation. What's next? The next mistake every novice trader makes is that they do not know how to adapt to the market and what is happening now.

adaptation to the market

There are a lot of examples. Several years ago I traded exclusively using the Martingale method (I was still that donkey!) - this my mistake of risks and expectations. But we are talking about trading psychology, you say. So, not only did I take all imaginable risks, but I also did not know how to change my mind during trading and adapt to the market.

My trading strategy consisted of very simple rules:
  • RSI indicator line in overbought or oversold zone
  • I find the level of support and resistance
  • I open a trade against the price movement from this level
Do you know what's the funniest thing about this story? The strategy is very profitable! But the day came when I lost amounts of 500-1000 dollars in a few hours (despite the fact that my trading deposit was 10-30 dollars) - I lost everything: my deposit and all my earnings! Do you know why? Because during strong trends this wonderful strategy DOES NOT WORK!

The market doesn't care about the RSI line, which is in the overbought or oversold zone. He also doesn’t care that I set the PS level and was waiting for a reversal - there were rollbacks, but after the rollbacks the trend continued, and I suffered losses. I didn’t have enough brains to look at the situation from a different angle - now there is a strong trend, I need to trade using a different strategy and open trades in the direction of this trend! All! Carry the bucket and expose it to a strong flow of profit!

But instead I thought: “The trend cannot last forever, now the price will definitely reverse!” Nothing like this! The trend lasted much longer than I remained solvent. You need to have brains, and not a good trading strategy and useless rules for the “management” of capital, in the form of Martingale.

There are always some strategies for a trend, and others for a sideways movement. There are indicators that work only under certain conditions, which you need to wait for, rather than opening a terminal with price charts and immediately running to open trades.

A novice trader is a stubborn “ram” who will bang his head on his own mistakes, but will continue to make them as long as there is such an opportunity. And the solution is quite simple - look at the market and choose the best trading method at the moment. You just need to adapt and not always strive to trade only one trading strategy.

By the way, lack of adaptation is very often the reason why the same trading strategies work differently for each trader. There’s no need to write that “the strategy is crap!” if it shows good results for me, but you have disadvantages. We trade at different times! I'm trading in a trend, and you're trading sideways! We are different traders, and our views on the market, as well as our trading experience, are different!

Finding the best strategy (Grail) for trading Binary options

Another psychological mistake of all novice traders is a very obsessive thought - “Hmm, experienced traders spent years trying to start trading profitably! I’ll be smarter - I’ll just find a very good trading strategy and I’ll earn no less than them!”

search for a trading strategy on binary options

From the outside, everything looks very logical, doesn’t it?! An experienced trader uses a trading strategy to find the best moments to open a trade, which means that a beginner also needs a strategy that will allow him to make money. The psychological mistake is that a novice trader is sure that all trading consists only of searching for one trading strategy - he cannot even think that there is a lot more that is hidden from his naive gaze: But you only see working with a trading strategy and mistakenly believe that success in trading depends on it. Funny...

Everything that is hidden from your eyes, dear reader, is the experience of the trader himself. It is experience that indicates how an experienced trader knows how to manage his capital, how well he controls his emotions and follows his trading plan.

You, a novice trader, are only trying to find a trading tool, but you don’t even try to read the manual for it, but you immediately say that you have become an experienced trader, having found the next “Grail”. This is the same as giving you a brush, and you immediately declare yourself a great artist, although, of course, you have no paints and canvas, as well as experience. What are your chances of drawing a picture that will be hung in the Louvre tomorrow?! That’s exactly the same with finding a trading strategy - what are your chances that you will make money on it without having other important knowledge? I will answer for you - your chances are zero. Any achievement with this approach is a pure accident, after which you will lose more than you were able to earn.

A trader’s greed is the worst enemy in Binary Options trading

There is greed in every trader – some more, some less. But none of us likes to give our money to a Binary Options broker. Greed in trading pushes us to use the Martingale strategy so that not a single dollar goes to the broker - with one winning trade, we will take a little from the broker himself, returning all our past losses.

We think the same way about profit – there shouldn’t be a day closed with a loss, so you need to earn money every day! How to earn money? Of course, using the Martingel system, how else can you earn money every day?! “Let the stupid people suffer trying to earn money with a fixed rate - I will be smarter and trade with the Dogons!”

binary options trader greed

But, instead of giving the broker an insignificant part of their deposit and having the opportunity to return it later, such traders lose everything because of their greed, and they simply do not have the opportunity to return losses (because there is nothing to trade with)! But they dream very beautifully that they can increase the trade balance exponentially every day - what could be simpler?!

Every experienced trader understands that it is impossible to always trade with a profit! Losing trades or losing days are part of profitable trading; you can’t do without them. Understanding the fact that losses will still occur and cannot be avoided, an experienced trader learns to trade without greed - “Today I am forced to give some of my money to the broker, but I have the opportunity to return it later and get my profit.”

Novice traders think completely differently - “This is my money! I will never give a Binary Options broker the money that I earned for so long! I will return all my losses with one profitable trade! I will earn 100-200% of the trade balance every day - this is my level of requirements (greed)!

It is not difficult to guess who comes out the winner in this situation and who gives back everything they made as a trading deposit. Greed in Binary Options trading has never helped anyone, but it has ruined many traders! Draw conclusions: either you learn to accept losses at the psychological level, or you are psychologically very dependent on your money (you are greedy) and consistently lose it.

The desire to return losses (recoup) from Binary Options traders

A trader’s greed gives rise to another very serious psychological mistake in trading – the desire to recoup or return all his losses. Way? Martingale trading or violation of all risk management rules.

This psychological mistake is very common among Binary Options and Forex traders. Having lost part of the trading deposit during trading, or even the amount of just one transaction, a novice trader wants to immediately return his money.

This leads to the fact that the amount of subsequent transactions is steadily growing, and the transactions themselves begin to be opened at random, even if the trader had previously traded according to the rules of the trading strategy. The desire to quickly return losses controls the trader’s mind, and in this state it is impossible to adequately respond to trading signals, manage risks, and monitor one’s trading discipline.

the desire to return losses in binary options

All a novice trader can do in such a situation is to pray that the deal closes in profit. But, as we know, if a trader starts praying, then he has already lost all his money to a Binary Options broker, who does not need any prayers - traders, due to their psychological instability or lack of other important knowledge, will themselves bring him profit. You just need to wait on the sidelines.

Even experienced traders have the desire to recoup their losses or recoup their losses. This psychological error tells us in plain text (with advertising banners and sound alerts) that we have violated the risks - we have invested too much in the transaction, even if according to risk management rules everything is fine. But each of us has our own psychological level, exceeding which we begin to experience fear of loss. And where there is fear of loss, there is a desire to win back, and a bag of psychological or technical mistakes. In general, trouble does not come alone!

Lack of control over emotions is the main psychological mistake of a trader

If you have ever watched an experienced trader at work, then you involuntarily noticed that all trading proceeds very calmly, even if the trader suffers losses. The fact is that every experienced, and, especially, professional trader knows perfectly well that control over emotions is his key to profitable trading.

lack of control over emotions in binary options trading

The less emotions a trader experiences during trading, the better his trading goes - he focuses his attention not on:
  • Desires to earn more
  • Fears of loss
  • Doubts about your trading methodology
  • Joy from successful trading
  • Sadness from a losing trade
And on:
  • Market analysis and search for trading signals
  • Risk control
  • Compliance with the rules of the trading strategy
  • Trading plan rules
The emotional component completely overshadows the trader's adequate trading process, so either your emotions control you or you control your trading. Something in between is not given.

Of course, sober control of one’s trading can be replaced by the trader’s emotional background right during trading, but it will take time to return to sober control. This is the trap: first you walk around the trap and if you fall into it, it takes time to get rid of it. Moreover, while you are in this trap, you should think about how to get rid of it, and not about some extraneous things that do not make any sense now.

Novice traders, on the contrary, having fallen into the “trap” of their emotions, are not at all going to leave trading and solve the problem that has arisen. They continue to trade, or rather try to continue. But this is no longer trading, this is a game of luck - if you are lucky, you will save your trading deposit until next time, if you are unlucky, you will give all your money to the broker right now.

Lack of emotional and psychological control is the most serious mistake for any trader. This problem cannot be gotten rid of so easily - you need to work on your psychology for a very long time in order to then be able to control your emotions even in the most difficult trading situations. Well, or have iron discipline, which will force you to leave trading at the moment when you begin to be controlled by emotions, and not by a sober view of trading.

Learn to admit your mistakes in Binary Options trading

We all think we're the smartest at everything, right? But being indifferent to other people's opinions and being the smartest at something are very different things!

learn to admit your mistakes

I very often deal with traders who are by nature the “smartest” but come to me for advice. They usually ask just a few questions:
  1. How did you achieve success?
  2. What trading strategy do you recommend?
  3. What does it take to become a successful trader?
In my free time, I even answer questions like these:
  1. I got rid of Martingale – it doesn’t work in trading. I started trading only at a fixed rate and following risk management rules. I did a lot of work on my trading psychology, because... I had very big problems with it.
  2. There are many strategies, here are some of them - choose any, I had good results from using them. But, without the necessary knowledge and ability to manage your capital, THEY WILL NOT WORK!
  3. Learn the basics of trading: risk management, money management, trading psychology, trading discipline .
And what do you think? That's right, after listening to the answers to his questions, the trader goes to trade in the same way as he traded before, but using the strategies that I proposed (which showed good results for me). And then he runs off to complain that the strategy isn’t working.

There are plenty of such traders, you don’t need to go far - just go to any forum, website, channel or group dedicated to trading, and there you will see angry reviews from representatives of this class:
  • The strategy doesn’t work - I lost my entire deposit! The author of the strategy is to blame for my losses!
  • The indicator lies and redraws - it is to blame for my losses!
  • I was deceived - the signals do not work
  • BloHer drained my deposit after I gave him access to my account - it’s bad!
  • The broker arranged everything so that I would lose my money - do not trust this broker!
  • All because of this damn price - it went the wrong way!
  • It's all Martingale's fault, but if the last deal had turned out to be a plus, then I would be rich!
  • Advertising is to blame for everything! Binary options are a scam!
  • You are all sheep! You are all to blame for my losses!
There are plenty of such whiners everywhere! Absolutely everyone is to blame for them, and it makes no difference whether they are directly related to trade or not. They cannot even understand that they themselves are to blame for such results:
  • It's my fault for using a strategy and not monitoring the risks in my trading
  • It's my fault for not testing the indicator before trading with real money
  • I am guilty of believing in “100% trading signals”
  • It is my fault that I made a mistake in my trading, not the Binary Options broker
  • It's my fault that I don't have enough knowledge to predict price movements
  • I am guilty of using the Martingale method in trading
  • It's my fault for believing the advertising
  • I am to blame for my losses!!!
This “It’s my fault” is something that many traders don’t have; instead, they make pitiful excuses and attempts to shift the blame onto other people’s shoulders. How… stupid!

You may have noticed that I very often scold myself for some mistakes I made several years ago. This is not only a way to convey important information to you, but also a way to convey to you the right approach to yourself and your loved one. You should never blame anyone but yourself! I did it, and I am responsible for the consequences!

No one forced you to trade with money that you are afraid of losing, to play trading, to trade without the necessary knowledge, to replenish your trading balance, etc. You did this yourself - you are responsible for your actions. Until this happens, in all situations you will remain a whiner, for whom everyone is to blame, but not himself. And you have nothing to do in trading with such “skills” - it will still end in “reasoned” whining on forums and websites.

Don’t listen to the Binary Options “professionals”

Believe me, the only one who is interested in your earnings is yourself! That's it, this is the end of the list of people you can trust!

You should not listen to various fleachers who will teach you how to lose your money by trading using Martingale. You should not trust your money to “professionals” who will increase your trading balance. You shouldn’t trust “100% signals” with which you will earn a million by the end of the day. Don't trust anyone but yourself!

trust only yourself

Trade only with your head, rely only on your knowledge! 99.999% of Blochers will only show you a pretty picture, and hide losing trades in a dark box - you must think that trading is very simple! Why show you that in trading you can lose your money very quickly?!

You can (and should) not even trust me! This won’t make me any worse - I’ll still get my profit in trading, but for you this is a very big plus - there’s one less “fleacher” giving you advice.

If you want to study trading, read books! No one is going to deceive you in them, because... the author could not imagine into whose hands his work would fall. Can't find the information you need in books? Look for information on the Internet, but always check it in different sources! If the information differs anywhere, then someone wants to deceive you.

For example, 19 out of 20 sites about Binary Options will tell you that the Martingale strategy is a very profitable strategy! But I’ll say that this is a strategy for losing your money and I’ll be right (you can check it!). What else do people who don’t regard profitable trading as “at all” want to convince you?! I hope you understand how important it is to find information from experienced traders, and not from scammers who consider themselves “professionals” but lose their deposits every week.

Don’t run after the percentage of successful transactions

It's funny, but many novice traders very often try to achieve good results. No, there is nothing wrong with this, if not for the desire to always trade with a good percentage of profitable trades.

In general, you should not measure your trading results in terms of the percentage of profitable trades and try to somehow control this percentage. 8 out of 10 trades in the black is 80%, but it’s still 8 out of 10. 10 out of 10 is 100%, but also 100% is 1 out of 1. Do you feel the difference?

You came to trading to earn money, and if your trading is profitable, then let it be at least 3 out of 18 - it won’t change anything! How is this possible? Yes Easy! For example, you have a trading deposit of $10,000, you opened 15 trades at $1 and they closed at a loss, and 3 trades at $100 each closed at a profit. As a result, you made money, although your percentage of profitable trades is very small.

There is a certain “type” of traders who are very sensitive to their percentage of successful trades. It all gets to the point where they open a whole series of trades for each new signal, after the previous losing trade:
  • Did your first trade close at a loss? I will open 3 trades on the next signal (if they close in positive territory, then the percentage of profitable trades will be 75%)
  • Did the trades close at a loss on the second signal? I will open 12 trades on the new signal.
  • Miss again? I open 48 trades...
This is very stupid, but statistics show a very good percentage of profitable transactions until it reaches the first deposit.

Do not create tables of trading income

Many novice traders are dreamers! Having learned about trading on Binary Options, they immediately draw up a table of their success - a table of their income, where in six months or a year they will become dollar millionaires, having invested only $500-1000 in trading.


Month

Percentage of profitable trades

Number of transactions

Risk

Risk per month ($)

Transactions in the black

Payout percentage for correct prediction

Return percentage for incorrect forecast

Balance: (at the beginning of trading $1000)

Profit for the month

January

75%

60

5%

50

45

76%

0%

1960

960

February

75%

60

5%

98

45

76%

0%

3842

1882

March

75%

60

5%

192,08

45

76%

0%

7530

3688

April

75%

60

5%

376,4768

45

76%

0%

14758

7228

May

75%

60

5%

737,89453

45

76%

0%

28925

14168

June

75%

60

5%

1446,2733

45

76%

0%

56694

27768

July

75%

60

5%

2834,6956

45

76%

0%

111120

54426

August

75%

60

5%

5556,0034

45

76%

0%

217795

106675

September

75%

60

5%

10889,767

45

76%

0%

426879

209084

October

75%

60

5%

21343,943

45

76%

0%

836683

409804

November

75%

60

5%

41834,128

45

76%

0%

1639898

803215

December

75%

60

5%

81994,89

45

76%

0%

3214200

1574302



These are traders from the category “What could be easier than increasing your trading deposit several times every month?!” But in the table everything is so easy and clear, but in practice traders are faced with:
  • Fear
  • Lack of knowledge
  • Greed
  • Stress from losing money
  • Violation of risk management rules
The profit table does not take into account such nuances! But the table contains data indicating that the market is “obliged” to give you a profit for free. Well, yes, that’s exactly how it will be...

Dear “trader”, you came to trade, and not to a bank with a fixed percentage of profit on your deposit. Here no one owes you anything, and your dreams and fantasies are just your dreams and fantasies. They do not reflect reality, and the reality is that you are mediocrity! If we had knowledge in trade, we wouldn’t make such signs!

Of course, you need to write down your trading results, but this is done after the fact - “The month is over, my monthly profit amounted to such and such an amount, and this is such and such a percentage of the balance!” All! No unnecessary data or forecasts - you, like any other trader, never know what will happen next month and what the results will be, so count only on the real earnings of many traders - 10-30% of the trading balance per month.

Dreams of stable earnings from trading Binary options

Together with a sign describing your profits in the distant future, you can throw away all your dreams of stable earnings on Binary Options. What does stability mean to you? I am sure that this is some kind of cash equivalent (15 thousand per month, 30 thousand, 50-100-500, etc.). No, all this does not exist in trade, and will not happen!

dreams of stable income

When a trader talks about stable trading, he says, first of all, that he cannot lose his deposit! There can be no talk about numbers. Any experienced person will tell you that his profit in a month can be only a few dollars, or maybe several thousand dollars, although last month the trader lost two hundred bucks.

Binary options trading is where the actual earnings of a trader depend on many components. So the trader does not know in advance how much he will earn: will it be a profit of 100-200% or only 2-3% of the trading balance, will there be any profit at all, or will the trade be zero, or will there be losses at all.
< br> If you decide to completely switch to trading, leaving your usual job, then be prepared that there is no fixed salary! It happens that a trader sits without profit for several months, and the time spent on trading does not in any way reflect possible earnings.
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