Find the Trading Strategy Zone
Before you ever make your first binary options trade, you need to have an overall trading strategy in mind. If you don’t, you will be making trades aimlessly, and while you might make a profit here and there, your overall odds of success are not very good. Having a strategy in mind, and a goal that your strategy points toward, is one of the best ways to ensure that not only are you staying focused while you begin your career as a trader, but that you are maximizing your potential for creating profits more fully.
Find a Goal
Obviously you want to make money trading; everyone does. This is a pretty obscure goal, though, and it doesn’t actually help you. Instead of saying “make money,” try to be a bit more specific. Setting a goal of making $1,000 over the next six months is a lot more favorable to you. For one, it gets rid of the vagueness of “make money” and sets a very concrete goal: $1,000. And instead of keeping that amount of time open ended, it gives you a deadline: six months. Once you achieve these two things, the goal becomes much more attainable and much more realistic. If you make your goal, it will be very easy to notice that, too. If your account is a grand bigger in half a year, you’ve been successful.
Make sure you put this goal down in writing, and make sure that you reevaluate your goal at the end of the timeframe you’ve given yourself.
Find a Way to Achieve the Binary Goal
Having a goal is great, but now you need to figure out how to get from where you are now to where you want to be. That involves a lot of steps, and the more detailed they are, the better. For example, what asset or assets will you be focusing on? How much are you willing to risk per week or per day? How much time do you want to devote to this? And, perhaps the most important question that you will need to ask yourself is: how much are you able to risk total? Telling yourself that you can only risk $500 for a trading account, but wanting to make $50,000 in a month is not realistic. That’s an added perk of this step; it allows you to fine tune your goal and see if it’s realistic or not. If you need to—and you just might—you can always readjust your original goal to fit in with your needs here. You always need to be gaining knowledge and education about trading. Trading binary options isn’t easy, so you need to have all your goals in place ahead of time before you commit to the practice. The more time you put into the better the outcome will be.
Look at the Short Term
Having a long term goal is awesome, but in order to achieve it, you will need to make systematic steps toward it. This is where your trading expertise comes into play. The better you know the market surrounding your assets of choice, and the better you are at selecting the correct expiration times and dates for your options, the more successful you will be with each trade. Now, combine this with a solid money management strategy, and you are suddenly on a step by step pathway toward meeting your goals. A lot of traders stop because they aren’t reaching goals they can’t even come close to meeting. Be sure you have these set in a realistic manner.
And don’t worry if you find yourself drifting away from the goal once in a while. Even with a strong trading strategy, you will see the occasional dip in your trading account’s balance size. We recommend breaking your goal period down into four equal parts and evaluating your progress periodically. For example, if you have a one year timeframe that you’re working in, every three months step back for an hour or two and see where you are. If you’re goal is to make a 50 percent profit off of a $10,000 deposit over the course of the year ($5,000 in profit per year), see how close you are each quarter to make sure you’re on pace. And don’t worry if you don’t appear to be on pace at the beginning. When you vary your risk as your account grows, the power of compounding will work for you the more you make, so it’s normal to be behind pace if you don’t take this into account.
What happens at the end of your goal period? You start over! Now you get to look at what you’ve done and reevaluate and then create new long term goals. Let’s say you were successful with your one-year goal and you made $5,000. Now your account is at $15,000. With 50 percent more in your account, you can easily expand your goal for the next year so that you are generating the same percentage number (50 percent), but more cash ($7,500, instead of $5,000). Don’t over do it however. Making the right financial goals will be the difference over the long run.
In the world of Forex trading you need to take all these things into consideration as well. There are a lot of lofty goals to be set, but it’s up to you on whether you will reach any of them. The power is out there. You just have to grab it.
You’ve probably learned a lot about trading over your goal period, too. Now you get to implement your stronger skills and new ideas. Hopefully, this means that you can create even more money as you keep moving forward.