Over many years of work, WinOptionCrypto has accumulated a wealth of experience in binary options trading. However, we honestly admit that our path was not ideal and smooth. We also, like many newbies, made annoying mistakes at first that should have been avoided. And now, from the height of our experience, we can safely say that over all this time we have been able to develop a set of rules - a system, by applying which even an absolute zero in binary options can boast of results.
Therefore, today we will talk about the five most important trading rules applicable to any binary options strategy and trading style. In our opinion, adherence to these postulates will certainly be able to take your results to a completely new level.
Content:
- Always stick to your trading plan;
- Buy Call and Put binary options in the direction of the trend;
- Stick to the Anti-Martingale concept;
- Always know when to stop trading;
- Don't try to get even;
- Conclusion.
Always stick to your trading plan
Undoubtedly, many of you have heard the expression: “Trading is a business.” And everyone who traded will confirm this. Let’s add on our own behalf: “You either follow your business plan or lose your deposit. There are simply no other options!”
Indeed, it would be strange to invest money in some enterprise without having a clear idea of its strengths and weaknesses - profitability and risks. No investor would ever think of investing in a company without seeing its financial statements or business plan.
It's the same with trading. You must clearly understand all your actions even before you make your first purchase of a Call or Put binary option. Why do you buy Call and not Put? In what cases should you do the opposite? What assets to trade and at what time? What criteria are used to select promising instruments for trading? It would seem that these are trivial questions, but most beginners ignore them - the result is appropriate.
An additional effect of using clear instructions for all cases of your trading life will be inner mental peace and self-confidence, which will allow you to continue trading binary options even during inevitable periods of trading account drawdown. Your trading will become much less emotional and your trades more selective.
Binary options trading plan:
- Trading goals:
- 1 For a month
- 2 For a year
- Which currency pairs are best to trade ?
- What timeframe will I use?
- What is my trading strategy?
- My risk management rules
- Trader's Diary
- What will I do to continually improve?
As you can see from the list above, with a trading plan it is much easier for a trader to focus on specific actions. Goals become clearer and more achievable.
We especially emphasize that each binary options trader should have his own personal trading plan, taking into account his individual characteristics. And the question “what will I do to improve myself?” should not cause much difficulty, because The answer is obvious - regularly visit the website /en , where you can always find a lot of useful, up-to-date information on all aspects of trading, and watch video reviews of the best trading strategies and indicators at the end of the year on the YouTube channel . We recommend using our sample binary options trading plan as a template.
Buy Call and Put binary options in the direction of the trend
The second piece of advice, which will remain relevant forever, is to trade with the trend . Although more experienced traders may argue with this statement, preferring to buy a Call option at the bottom and a Put option at the top of price momentum, beginners are strongly encouraged to apply this principle to their trades.
For those who prefer trading in the channel , we suggest that before concluding a transaction, you should additionally make sure that the market has reached a local minimum or maximum, showing signs of overbought or oversold. Make sure the top or bottom is already formed. You should not try to catch the minimum or maximum price. As a rule, this only leads to additional losses.
Binary options trend trading has received universal recognition due to the stability of results in the long term. It is much easier and more effective to buy Call and Put options with the trend than against it. More than one generation of traders has been convinced that this way you can earn a lot more money.
An additional advantage of trend trading is the trader’s psychological confidence in his actions. Moreover, most of the Call and Put binary options you buy will immediately go into the money, showing a positive result for the still open position. Agree, it is much easier to keep a profitable position open than to worry about the asset price going into the negative zone immediately after opening a trade.
Trading with the trend looks like this. Because the pressure of buyers or sellers, depending on the direction of the trend, leaves no chance for the opposite side to seize the initiative. When the strength of the trend is strong, the price, having stomped a little near support or resistance , rebounds in the direction of the dominant trend. Everyone who managed to open a deal at this moment instantly finds themselves in the profitable zone.
Buying binary options based on the trend is relevant for different expiration times . This approach is actively used by both scalpers and those who like to sit in a transaction during the trading day. Therefore, it can be safely called a universal approach.
Follow the Anti-Martingale Concept
Wall Street's greatest trader, Paul Tudor Jones, recommends that traders never add to losing trades. His famous quote is: “Only losers are added to losers.” If the binary options trading plan did not initially involve increasing the bet in the event of a loss on the previous transaction, then it is not worth doing this.
To increase bets in case of loss, you need a clear understanding of the serial nature of your own trading strategy. This is possible, but in limited options and with an eye to the devastating consequences that thoughtless use of the Martingale system can lead to for your trading account.
By using Anti-Martingale, you reduce your bet after a loss, and vice versa, increase it against the backdrop of a winning streak. This way, you will reduce trading volumes during periods of drawdown and increase them when your strategy is profitable.
How much to raise rates during the period of earnings, and vice versa, reduce them during drawdown - this already depends on the individual preferences of each investor. In many ways, these coefficients will be determined by the risk tolerance of the trader himself and depend on his financial capabilities and psychology.
For a more detailed acquaintance with this principle, we recommend using the Anti-Martingale calculator on our website.
Always know when to stop trading
Real trading in financial markets provides us with countless examples of why traders should always use loss limiting techniques. If you trade Forex, always use a protective stop order; if you trade with a binary options broker , know your daily loss limit and never go beyond it, otherwise very soon you may lose your deposit .
You should always remember that market trends can last for a very long time until the fundamental factors that gave rise to them change. Also, more than once we observe simply wild price fluctuations within one trading day.
On such days, you need to be flexible and sensitive to changes in the price dynamics of your financial instrument. If a trader persists and does not want to admit his mistakes and, worse, is prone to tilt, violating the psychology of binary options , negative results will not be long in coming.
In this case, the best solution is to take a break from trading. The market is not going anywhere, and your psychological state directly affects the amount of money you earn. If you feel like you are losing your composure and control over the situation, stop. At a minimum, take a break for a few hours or days.
Don't try to get even
This rule echoes the Anti-Martingale concept. Never buy Call and Put options in hopes of winning back. By acting this way, it is very easy to lose control and slip into gambling. Don’t turn your trading business into a casino, when instead of making transactions according to a carefully calibrated strategy, a greedy player frantically presses the button of a slot machine, expecting to receive an immediate win.
Wanting to quickly return all losses, you act emotionally, not rationally. Having given free rein to your emotions, you are unlikely to notice that along with the possible profit, your possible loss also grows proportionally. In this case, most likely, you will trade poorly and make unreasonable transactions, because... You will be influenced by emotions and an open position for a large amount.
It is much more effective to stop trading, comprehend what is happening and take a break, at least for a few hours, and it is better to return to buying binary options only the next day. This way you can start over with a clean slate, focusing solely on your trading strategy. If you have lost faith in it or for some reason it has ceased to bring the level of income that you initially expected, you can choose a new one in a special section of our website dedicated to strategies for binary options .
Conclusion.
Develop the habit of starting each trading session with a “clean slate”, regardless of whether you had a profit or loss the previous day. Always follow the rules of money management , and use at least the simplest binary options trading methods. If you are just taking your first steps, we recommend that you read our article for beginners on learning to trade .
See also:
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