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Trading on paper or how to learn to trade Binary Options

Trading on paper or how to learn to trade Binary Options

We all enjoy watching professionals at work. Especially if we talk about professionals in binary options trading - all actions are worked out to automatism and from the outside it all looks like a trader does not expend any effort and calmly earns amounts that many of us cannot earn even in a few months.

br> Quite often I am asked about trading strategies for trading in the morning, and I know one or two and that's it. To the question - "Why is that? You are an experienced trader and you live by trading, ”I answer that my morning does not start until 11-12 (and sometimes 14) in the afternoon - I am a trader, I can afford it. It would seem a trifle, but most of the people with whom I communicate are forced to get up at 7-8 o'clock and go to work, where they will earn much less than I do in a few hours (or even minutes) of binary options trading.

This is not boasting or an attempt to humiliate your efforts and merits - I know from personal experience what an unloved job and the word “Need” are! It's just that each of us strives to live better - someone makes more efforts for this, and someone just dreams about it without doing anything. For all the time spent on learning to trade, I realized that nothing is given just like that, if you want to achieve something - act, despite any difficulties!

Quite a lot of traders live only at the expense of trade, and they do not live in poverty at all. But it is very foolish to think that they were just lucky. No, they put in a lot of effort and time to start earning.

Trading is no easy task. Most people lose their money due to lack of experience, unwillingness to learn or simple laziness ... But since you are reading this article, then you definitely want to be among other people - those who consistently earn money in trading. Nothing is impossible, but on your way you will definitely meet such difficulties as:
  • Fear of losing your money - and this will definitely be due to inexperience
  • Loss of faith in yourself and your strength after every failure
  • The desire to recover all your lost money by investing a very large amount in trading
  • A great desire to give up and forget this terrible dream
But since there are experienced traders, it means that they have overcome it all. Just how did they do it?

Paper Trading in Binary Options

No matter how funny it may look, trading on paper is…. paper trading. Literally, you take a piece of paper and write down all transactions and results on it. You can, of course, also in electronic form - keep a trading diary (a very useful and necessary thing).

Paper Trading in Binary Options

This is a very old method used by stock traders, long before the advent of binary options. But, old doesn't mean useless. On the contrary, this method of educational trading carries a lot of positive qualities.

So how does all this happen? Take a litter, a pen. Sit in front of the price chart and wait for the signal from your trading strategy. When a signal occurs, record the following data:
  • Your trading balance
  • The current price of the asset (at the time of the proposed opening of the transaction)
  • Amount of investment
  • Expiration time
  • Direction of an open trade (up or down)
It remains only to wait for the closing of your "deal". As soon as the expiration time is over, write down the current price of the asset and compare it with the price at the time of opening the trade. Then write down the current trading balance, which has changed up or down as a result of the transaction. And so every time.

In this way, you can "trade" on any options, be it the "Border" or "Ladder" options - the main thing is to understand the principle of these options. But regular Up/Down options are best - they are very simple, and you can also choose a longer expiration time. On 60 seconds options, this method of trading will be less effective, because. you will have to record a lot and quickly accurate data.

Binary options and paper trading

As for the initial trade balance, then you should not draw millions on paper for yourself. You can afford to invest $100-200 in trading, so even on paper you will have exactly the same trading balance! Bring trading on paper as close as possible to the conditions of real trading.

Forecast or Binary Options Price Chart Predictions

Another way that will allow you to make forecasts is the Forecast tool (forecasts), which is available on the Trading View charts. This tool allows you to set the point of opening a deal, set the expiration time and the very direction of the forecast.

Let's analyze this tool using the example of a binary options broker Intrade Bar, whose trading platform uses Trading View charts. The tool itself is on the toolbar:

Forecast tool at broker INTRADE BAR

Next, we add the instrument to the chart where we plan to open a deal and stretch the “Forecast” arrow to the right:

Forecast on the chart of the Binary Options broker INTRADE BAR

In our case, we set a 5-minute increase forecast - after 5 minutes, the price should be at least 1 pip higher (0.00001 - in the blue box) than at the time the trade was opened. To put it simply, we made a normal prediction on Binary Options.

After 5 minutes, the price was significantly lower than our trade entry point, so Forecast informed us that the forecast was not correct, and our trade closed at a loss:

negative forecast result from INTRADE BAR broker

If the forecast is justified, then Forcast informs us that the deal closed in profit:

positive Forecast forecast from broker INTRADE BAR

Let's clarify the rules for making predictions again:
  • The forecast must be set at the point where the trade is planned to be opened
  • The expiration time is set by stretching the Forecast arrow to the right - the further you stretch, the longer the expiration time will be
  • Setting a forecast costs 1 pip up or 1 pip down from the current price - one pip is enough to earn on the correct forecast of Up/Down options
  • When using the Forecast tool in trading other options, set the appropriate conditions and settings
What does Forcast give us in trading on paper? This is a clear example that will allow you to predict the price movement without risking your own money. Of course, such transactions should also be recorded in your trading notebook - after all, these are your transactions, and the "Forecast" will simply allow you to visualize the trade on the chart.

Why trading on paper is better than a demo account with binary options brokers

No matter how interesting trading on paper looks, you will still have the question - “Why trade on paper if you have a demo account?”. The question is very interesting and worthwhile, especially when you consider that:
  • Paper trading was used even before the appearance of various demo accounts (Is this trading outdated?)
  • 3 out of 4 binary options brokers provide a demo account to all their clients (Why keep a real notebook - does the broker have all the statistics?)
The fact is that a demo account is needed only in one case - to get acquainted with the trading platform of a binary options broker and understand all the intricacies of working on it. But, as we already found out in one of the previous articles, a demo account is most often used as an entertainment tool - a toy for gambling clients. I hope you have already understood the fact that greed is very expensive in trading.

Trading on paper, a trader not only writes down all the actions that he performs, he also develops his trading discipline, trading psychology and risk management in a very positive way. All this is not in trading on a demo account.

Look, let's take a real example. You write down all transactions on a piece of paper, you initially have a limited trading "balance". All this leads you to think about the forecast and the amount of investment before each "deal". Our psychology makes us do everything so that in the end we want to be happy for ourselves (Today I tried and what wonderful results I got, well done) or even show our successes to others. But in order to do this, you need to do your job well.

Simply put, you will try to do the right thing without even knowing it. All your mistakes and achievements will remain on paper - they cannot be changed or cleaned, which means that this is a direct reflection of your trading success. They leaked their trading "balance" - here are your statistics, look for the reason for the failure. You consistently “earn” and lose little - continue in the same direction, this will develop many important skills for you.

On a demo account, unlike a paper balance, you can press one button and the trading account will become the same again. In addition, on many demo accounts you can completely remove the traces of your “shame”, but on paper it’s not so easy to get rid of your results. Also, on a demo account, traders very often open deals without hesitation or trade with an increase in the amount of investment - it's still virtual money. But "balance" on paper means more, especially when you make at least some effort to record statistics.

The difference between pressing buttons and manual recording is huge. In psychological terms, trading on paper significantly outperforms a demo account, not to mention the fact that such trading makes the trader analyze more, calculate more, think more before making a deal.

Tips on Paper Trading in Binary Options from Experts

Paper trading can be a very valuable tool in your trading. No matter how simple everything seems, but even here there are nuances that should be followed. Almost all experts give the same advice to all novice traders, which we will talk about now.

Write down everything about your binary options trading

Writing down absolutely everything that can help you in the future is a very sure way to improve your trading results, as well as to find the hidden reasons for your failure. So what should be recorded in addition to data on open transactions?

record all important information in Binary Options

For example, important information includes:
  • Why did you enter the trade?
  • Why did you invest this amount in the trade?
  • Did the price go in the direction of the forecast? If yes, why? If not, why not?
  • What was your emotional state at the moment you opened the trade?
  • What is your emotional state during an open trade and at the time of closing?
  • What lesson did you take away from this deal?
Answer these questions literally - they contain the key to profitable trading. You will end up with something like this:
  • *Deal opening data: opening price, direction, investment amount, balance before opening a deal*
  • Entered a trade because there was a signal from my trading strategy
  • The investment amount is 1% of the trade balance and does not exceed the acceptable risks
  • The price went in the direction of the forecast, because there is a stable trend. / The price did not go in the direction of the forecast, because there was a support and resistance level on the way.
  • The deal is open without emotions
  • There was joy during the trade because the trade was profitable. / Felt fear during the transaction, because the price was moving against the open deal all the time, and at the moment of closing it was completely upset.
  • It is necessary to reduce the risks in investing in order not to worry about the results of your open trades in the future
All this may seem very tedious, but the benefits of this approach are very great! By writing down each trade in this way, you identify all the shortcomings in yourself, which means you understand what needs to be changed or corrected in your trading. You are one step closer to profitable trading.

Be realistic when trading on paper

On a demo account, you can often find amounts of $50,000 and $100,000. The broker initially accustoms you to excitement and greed, because. makes you trade large amounts and make huge profits in a minute.

be realistic in binary options

When trading on paper, you set your own trading balance. You can afford to invest $100 in trading, so let this amount be in paper trading. This approach will help you see real profits and losses. The amount of investment in each transaction must also be the same as the amount of investment in the real account.

You should not "trade on paper" in amounts of $5,000, if in reality you can afford to open a deal for only $1-2. The closer you bring trading on paper to real trading, the less problems you will encounter in the future, because. you will know what to be prepared for.

Always analyze trades on paper

Analysis is your main ally. Always analyze trades:
  • See what you did and why?
  • Pay attention to those deals that closed in the red. Why?
  • A lot of losing trades on one asset? Maybe you should exclude the asset from trading?
  • Frequent worries and lack of emotional control? What can be done to change this?
  • Leaked "trade balance"? Why?
  • Earned an unrealistic amount? Why? (this is also not good)
  • Sustained positive result? What did you do for this? What should be done to maintain this success?
The more you devote to the analysis of your trading, the more you can improve the results of your future trading. Your personal experience will accumulate all the time and eventually develop into a very competent and profitable trading without risks.

Pros of Paper Trading in Binary Options

The advantages of trading on paper in binary options are as follows:
  • "Trade" without risks - you will not lose money
  • More responsibility for trading than on a regular demo account
  • Conditions very close to real trading
  • Developing trading discipline
  • Revealing the Hidden Problems of Personal Trading
  • A large amount of important and useful analytical information Trading on paper is very different from the usual demo account with binary options brokers. If the broker forces you to "play" trading and develop greed, then trading on paper allows you to "trade" without these disadvantages.

    Paper trading is much closer to real trading than a demo account, which means that it is much easier to switch from such trading to a real account.

    Cons and Disadvantages of Paper Trading in Binary Options

    There is only one minus of trading on paper - this is not real trading and you won’t be able to make money on it. And since trading is not real, then real emotions are simply absent.

    In addition, many traders are very fond of trading on paper (and trading on a demo account), after which they simply cannot switch to real trading. Psychology no longer allows you to leave the harmless world of carefree trading.

    Trading on paper also carries a risk - the risk of believing in your success. After that, a successful paper trader thinks about replenishing his real trading balance with a tidy sum, after which he quickly gives it to the broker - no one has yet canceled the emotional pressure.

    How to find a way out of this situation? Do not think that trading on paper is a 100% reflection of real trading. Certainly there are similarities. There are even very important qualities that can be developed in trading on paper - for example, analyzing and analyzing your trade. But trading on paper is theory, and the practice of trading on a real account is real practice.

    Is it worth trading on paper in Binary Options

    Definitely worth it! Trading on paper is much better than trading on a demo account. Although this is a very "ancient" method used by traders of the last century, because they had no alternative, but this does not mean at all that it is a bad way to develop your trading discipline and learn to trade.

    Any information about your trading is a way to find the reasons for your failure and eliminate them or move away from them as much as possible. Do you think we were just taught to write down information at school and notes in institutes? Of course not - it has long been proven that information is remembered many times better this way. So don't be lazy to take the time to write down your trades - this will greatly increase your chances of success in the future.

    The only thing that distinguishes real trading from trading on a demo account or trading on paper is the emotional load. You will still have to face this problem, but it is better if it happens when you are ready for it as much as possible than immediately after playing on a demo account.
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