Article for those, who lost money on trading binary options. Learning money management!

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Article for those, who lost money on trading binary options. Learning money management!

Trading in the futures market as, however, and speculative operations by other financial instruments are associated with a high risk indicator that can lead an unprofessional trader to a complete loss of investment funds. Probably, we will not open a secret if we say that any online investor faced losses and critical losses of capital, which threatened to completely withdraw from the market. In most cases, this is associated with financial indicators of trading conditions, the level of mathematical expectation of unprofitable trading rates, technical problems in the analysis of quotations and certain psychological factors that accompany trading in the futures market. Against this background, there is a need for proper management, the task of which is the formation of rules for managing operating capital and risks in the process of trading. This is the topic we will devote our material to — an article for those who lost money in the binary market, but strives for a spectacular return to trading and high financial goals.

So, at the dawn of online trading, when the vast majority of private investors had little understanding of the intricacies and processes of the financial market, and purely scientific articles were used as the main informative resource for studying the work of traders, the concept of money management included a rather wide range of issues. Literal translation in this case means “Money management” and specialists include such moments – a variety of financial and economic laws, statistics, the principles of trading on stock exchanges, certain financial and technical limitations when working with trading instruments. But in private investment activity, and especially in binary trading, this concept was significantly narrowed by market participants to the management of risks and trading capital in the trading process.

What is the right money management?

The bulk of traders in the binary market, especially beginners, are quite light-minded and somewhat negative about the rules of management, since they quite severely restrict the level of profitability of trade. But at the same time, the right money management, almost the only way to minimize losses as much as possible, and get a stable result from binary options trading over a long period of time.

To the basic principle of correct management in binary trade, many specialists consider the calculation of the optimal ratio of the value of the trade contract to the amount of the trader’s operating capital. If one speaks in plain language, then the market participant, in order to minimize losses and trading in a deposit-safe mode, must execute transactions, the volume of which will correspond optimally to the amount of trade capital. For example, if there is an amount of $ 100 on the investor’s deposit, then in no case can you put all the funds for 1 contract. In another version, one trading bet on the market with a loss-making result will result in the loss of all investment funds. The overestimated value of contracts is the main mistake of beginning traders and self-confident professionals, which inevitably leads to critical losses of capital.

Professionals for a long time calculated the most optimal indicators of the right manimage for trading with urgent rates. Classical rules have such generally recognized indicators:

When using highly efficient trading systems, the level of trade risks can be set at 5% of the amount of capital
Working in the mode of high-frequency trade (scalping), the risks must be limited to a level of 3% of the volume of operating funds
When drawing up a series of trading rates, their total value can not exceed the level of 10% of operating funds
These risk-restriction indicators open up the possibility of obtaining minimum capital losses and allow a quick recovery of the overall trading result.

A separate approach to money management can be considered an approach in which packages of trading positions are used – risk diversification. The principle of risk diversification can be illustrated by simple folk wisdom – “Do not put all the eggs in one basket.” Applicable to binary trading, this means that it is better to draw a dozen trading positions in small amounts and on different underlying assets and get a general profitable result than to make a big bet on the quotes of one asset.

The right money management allows traders to get the most stable result with minimal losses. Market participants who are disciplined in the issue of capital management, reach the highest trading heights.

Financial conditions of trading as a factor of effective risk management

It is worth noting that the correct management and stable trade on the market directly depends on the broker’s trading conditions, the main indicator in which is the ratio between the amount of initial trading capital and the minimum value of the contract. What is meant? The fact is that brokers, setting the terms of trade on their site, often offer indicators that can not contribute to the right management. For example, a minimum deposit of 75 USD and a contract value of $ 50, that is, one trading position on the minimum trading account is more than 50% of the total amount of trading funds. Under such conditions, immediately after receiving a loss-making contract, the trader needs to re-enroll funds to continue trading. The optimal ratio is considered by specialists when the sum of the minimum trade position is 10% of the initial capital amount.

The minimum trading capital for most companies is 10 USD, and the contract value is 1 dollar. Thus, the market participant has the opportunity to issue a series of 10 trades on a minimum account. Given the use of a workable strategy and payment contracts at the level of 85%, such a volume of capital with the right money management will bring up to 8 dollars from one series of trades, which will allow the trader to receive large amounts of stable profit in the future.

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Manipulation Psychology

An additional factor in influencing the efficiency of the trader in terms of managing capital and risk is psychology. Here it is worth noting that the main problem in this case is the greed of the trading participant. Of course, everyone remembers how they started to trade – they wanted to earn as much as possible and faster. As a result, many of you opened bids at once, as they say for the whole “cutlet”, and lost operating capital on just one or two transactions. Therefore, psychological moments in management are of extremely high importance. You as a potentially successful investor should first of all curb their emotions, greed and ambition. An effective and successful trader is an investor who can correctly calculate all the necessary indicators of trade contracts, and strives for stable results, not short-term success. It is from the stability of capital growth that your final result of activity in the market will depend, and not on the instant increase in capital. For this reason, your greed and psychological instability here act as a major negative factor affecting the effectiveness of risk management and the financial indicator of trading.

Conclusion

In the end, correct management is the main tool and rule of stable trading in a binary market, ignoring which leads to a complete loss of operating funds and the termination of trading. On the other hand, managing risks and trading capital, you can earn a lot and consistently!

“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”

How I lost money in Binary Options

To win or lost money in Binary Options: what is the easiest to happen?

The easiest would be to lost money in Binary Options, especially in the beginning.

Contrary to what we read on investment blogs and websites, the truth is that many people lose money, especially if you are a newbie.

We are taken in by the features and benefits that they advertise and they tell us stories of how they made a profit quickly and easily.

Here, I tell my story, a true story that happens to many others like me – how I lost money in binary options.

How I lost money in Binary Options:

The first time I traded binary options I lost money. I lost the entire account quickly, in only two days.

I made several mistakes, the main one was thinking that it was easy.

And so wasn’t worth wasting time understanding and learning how to really trade.

I quickly saw that it wasn’t really as advertised on the binary options websites and blogs.

How many times do we see advertisements for business or investments?

How many times do they say it’s very easy?

That you will earn a lot of money, without work, without effort?

Many times.

Tips from our Professional Trader: 6 reasons to have 2 accounts

Do you know that you should work with more than 1 broker?
Check the 6 reasons why you should have account with at least 2 brokers:
  1. Each platform has its differences. If you try different platforms you may find those more suitable to your trading style.
  2. Each broker has his own payouts that keep changing during the day. If you want to open a trade and one offers 60% and the other 80%, you will choose the one with best payout, no?
  3. Sometimes the brokers close some assets, if you have just one account and you want to trade on that asset and it is closed, you will LOSE that trade, no?
  4. If there is an issue with your Broker’s platform, or they are updating it you’re not able to trade, unless you have another account with other broker.
  5. Deposits and withdraws. Brokers keep changing the deposit and withdraw methods, imagine you need cash fast and your withdraw system is closed at that moment on your broker, what do you do?
  6. Each platform has its owns indicators and trading tools, imagine you found a new stratey and it does not work on your broker because it uses an indicator that your broker does not offer.

Below you can find our main trader suggestions on brokers:

But the truth is that later we don’t really come across many people that succeeded. And those that succeed, yes there are people who have actually had success, worked, struggled and devoted themselves to getting results.

I was led to think that it was really simple to win a lot of money easily.

The reality is that in about 48 hours I lost all the money I had in my account. The $200 that I deposited and the $50 bonus that I received.

On the first day, I placed 5 trades. I had profited on four and losses on one. It was excellent. I didn’t have to resort to any special strategy, only some knowledge that I had about trading. I became a fan of binary options. I thought it was easy. I had found a system that would make me rich.

On the second day, everything changed. I had losses on my first three trades. I insisted, with three more trades, and I lost again. It didn’t even occur to me that the way I traded the previous day might not be working today.

I lost the previous day’s profit quickly and was already losing money. After losing 50% of the money in my account, I didn’t even pay attention. I ended up trading without resorting to any special strategy without having spoken to someone who could help me. I thought that it was all a scam and that it wasn’t my fault I had lost my money; because I thought it was easy.

It was my fault that I lost money. I only thought of the profits. I didn’t think of the steps to make a profit. And everything in life requires training, dedication, and persistence to achieve success.

There were some trades where it was clear I lost because I was trading with an unregulated broker and as such, I felt that there were some flaws in the platform that penalized me and resulted in losses on trades. With a good broker, the orders probably would not have had the same outcome, because they would not have blocked like they did.

At the time, this market was not yet regulated. Today this situation wouldn’t happen because binary options became regulated in 2020.

And today, most of the Binary Options Brokers, are regulated like IQ Option.

Currently, I have positive results, but to get there I had to learn, and most of all, I was persistent and didn’t quit too early. I was able to understand that the error was mine, I wouldn’t want to win without first learning properly. This long journey and experience allow me to, today, have the knowledge to pass on what I’ve learned to my students.

The success of my courses (see student comments) is evident, and it leaves me satisfied not only for recognition but also for the opportunity to help those who, like me, believe that with hard work and dedication, we get results.

The training based on the Trading Triangle offers the student the opportunity to learn much more than a simple trading strategy.

If you really want to try to earn money with Binary Options be sure to look for a course and someone who gives you the knowledge but also that supports and helps you. Know my courses and compare with others that exist, but above all learn, not only strategies but the rest, rules of trading, discipline, emotional control, etc.

How I lost money in Binary Options: final advise

In order not to lost money in Binary Options, not because of you, but because of a bad Broker

Don’t forget that is important to choose wisely.

My list below is my favorite Brokers:

I hope that you learn something with my real story on how I lost money in Binary Options, and this will help you not to go on the same path I went.

But if you end up making the same mistakes and lost money in Binary Options, I hope you can recover with hard work and the right attitude

A scalping strategy for options

The format of scalping on options is a fairly common way of making a profit in this area of the market. The speed of trading and its high profitability results are the main factors that attract people to this method of trading. Today we will consider the effectiveness of high-speed trading, as well as a few practical examples of scalping strategies for futures contracts that could become highly effective tools for predicting the market using short-term contracts.

How reliable is the scalping strategy for options?

The question of reliability and effectiveness of this strategy for scalping on the market is primarily related to the effectiveness of the trading signals of the system, as well as the correct risk management. In addition, the reliability of this scalping strategy is tied to the professional level of the trading terminal and the parameters of the trading conditions that are available on the operator’s platform. By picking the right technical and trading parameters for the scalping strategy you can get fairly stable and high results using this trading format. Here are a set of recommendations that contribute to the effectiveness of scalping on options:

• Use platforms for trading from professional companies — in this regard, we recommend the terminal for futures trading from the our brokers rating, where you will find all the necessary technical indicators for scalping, as well as a set of highly effective forecasting tools
• Carefully and accurately calculate the risks when registering trading positions. The correct ratio of the cost of the trade to the volume of capital will help you avoid critical losses and drawdown in your account
• To conduct trading in scalping mode, use a system with an efficiency level of at least 85% and maximum universality for all underlying assets

This list of recommendations will allow you to engage in high-frequency trading in a safe and profitable mode.

Scalping indicators for options

Market professionals recommend using technical indicators that are capable of generating signals on fast impulse changes in the price of an asset as forecast indicators for scalping trades on the futures market. In this case, the main trend indicators work perfectly, and they can be found on the many platforms:

This set of forecasting tools will allow you to build universal strategies for scalping on electronic options.

A scalping strategy for futures trades – practice

For our first practical example of a strategy for scalping on the financial market, we will show a system that uses a combination of settings of two trend indicators. This format of generating technical signals allows you to best assess the current market situation on the asset chart and opens up the possibility of determining the points of price quotes where the chart reverses to build corrections or new trends. So, let’s set the following technical forecasting tools on the asset quotes:

• EMA Indicators with technical parameters 10, 20, 30
• 2 MACD indicators — 50/75/9 and the standard configuration

We will use turbo trades with an expiration period of 120 to 240 seconds, and we will register the positions when we receive the following signals from the indicators:

• EMA Indicators – a beam of movings reverses upwards on the chart after convergence in one point
• Indicator MACD 50/75/9 – the lines intersect upwards
• Standard MACD – the movings intersect level 0 upwards

Signals for trades DOWN will have the reverse building configuration. This scalping strategy format has a technical signal efficiency ratio of 90% and allows you to make the most stable earnings for short-term trading. It should be noted that the risk management parameters for this system are of the classic parameters – the maximum amount of trading funds for one trade should not exceed 3% of the total amount of capital.

Scalping in 1 minute

The next scalping strategy format for electronic options is designed to work with contracts that have the minimum expiration period of 1 minute. Here, trend indicators are also used with subtle settings parameters, allowing for the formation of two types of trading signals for turbo contracts. In this way, we will achieve high cyclicity of our technical signals and increase profit opportunities for scalping since this operating approach makes it possible to register contract packages. So, let’s install the following instruments on the trading chart:

• SMA 5 and 10 indicators — we use blue for the moving with a five-minute period of building, for the second technical tool we use the standard coloring.
• MACD indicator – standard

To register trades UP with expirations of 1 minute, we use the following types of technical indicator signals:

Signal for the 1st type:

• The technical movings of the MACD indicator intersect upwards
• The blue lines of the SMA indicator intersect the second moving upwards

Signal for the 2nd type:

• The MACD oscillator lines intersect level 0 upwards
• The SMA indicator movings diverge upwards on the chart without intersecting

Using these signals, you can register up to 40 trades with short-term options in one hour, of which 90% will close with a profitable result. This factor will make it possible for you to earn up to 300% per week on options scalping.

Let’s sum up — scalping with futures trades using the correct mode of risk management and in combination with an effective trading system is the most rapid way to increase your account balance.

“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”

The 80/20 Rule in Trading. How to implement it correctly

There is a selection of rules and approaches in any field that can help you be more effective and get better results. Trading on the financial market is no exception. In this case, every investor adopts an entire series of specialized approaches and rules for generating better results, such as strategies, plans, and money management guidelines just to name a few. That being said, other than specialized rules, there are more universally-applicable approaches that can create the ideal conditions for trading financial assets. This article will examine the 80/20 rule, also known as the Pareto principle, and how it can be applied in a trading context.

The empirical 80/20 rule was developed by the undoubtedly brilliant economist, engineer, and sociologist V. Pareto, who in 1906 noticed that this division is present in nearly every economic sphere. For example, 20% of the Italian population owns 80% of all the land and workers can only work effectively 20% of the time, the remainder of the time they are less productive! When analyzing how this rule plays out in daily life, it is worth noting that the ratios can vary greatly from the clear norms. It is not uncommon to see significant divergences, such as 75/25 and 99/1, however, overall the system is applicable and regulates every sphere of human activity. If you were to consider this principle in a wider context, it is worth noting that the basic concept is present in every sphere of life, from health and wellness to economics and finance. The universality of the rule and the ability to utilize it as a tool for improvement has made this approach very popular in various fields of economic, marketing and financial research. We propose examining how the 80/20 rule can be applied to trading.

How do you apply it to trading correctly?

So, financial trading is first and foremost statistics and numbers that are used by traders to generate forecasts and develop strategies. Therefore, it is unsurprising that the statistical 80/20 rule has been widely adopted in this field. It is likely that many traders noticed that they don’t always trade as effectively. A simple example of this is that 20% of trading contracts produce 80% of a trader’s profit. And, of course, many know that only 10-20% of those trading on the market achieve success, the rest lose their capital. Of course, this is the most basic example that demonstrates how effective this rule can be. Speaking more specifically in terms of concrete examples of this principle in action in the sphere of financial trading, it is worth highlighting the following statistical inferences:

в—Џ Market conditions are only good for effective trading 20% of the time, the remaining 80% of the time the market is unsuitable for trading

в—Џ Effective traders are only on the market 20% of the time, the rest of the time they devote to other matters

в—Џ Only 20% of contracts lead to 80% of profit

в—Џ Statistically, 80% of trades placed are simple, the remaining 20% are complex

в—Џ 80% of trading takes place during the day, and 20% in other timeframes

в—Џ 80% of a trader’s success is down to psychological factors, and analysis and strategy only make up 20%

в—Џ 20% of readily-available forecasting tools are effective at market analysis, the remaining 80% of tools don’t give you any useful information

в—ЏThe quality of a technical forecast is 80% down to the analysis of macroeconomic statistics and news and only 20% reliant on technical market data

As you can see, this principle can be widely applied on the financial markets. Let’s breakdown of the main assertions and run through how they can help improve trading signals.

Trade 20% of the time, relax the other 80%!

The primary trading issue in terms of profit hinges on stability generating accurate trading forecasts. The problem is that the market is chaotic and only forms a clear pattern of rate movement that can be forecasted through specialized tools and approaches 20% of the time. More than likely, all active traders have noticed through observing chart liquidity throughout the day that they can only form relatively few effective trading positions. Other than that, no trading system generates signals stability anytime during the day. All of this is caused by a myriad of factors, the leading of which are macroeconomic drivers and the statistical of traders’ activity, such as total capital, the number of market participants, and interest in any given asset. Of this forms the necessary conditions for applying the basic 80/20 rule.

To put it simply, the market conditions are only ideal for trading 80% of the time. This brings to mind a statistic of successful traders that only 80-90% of investors can achieve success on the market, the rest just lose money.

Many online traders on the financial market try to trade actively despite the 80/20 rule and time management, meaning that the quality of their forecasts and general trading signals decreases significantly. As follows, a large number of contracts placed based on questionable forecasts lead to capital loss, not gain. Consequently, this can be resolved entirely logically using one basic rule, trading is a field where “if you do less, but to a higher standard, you will profit more financially”!

When deciding on an effective time management regime that meets your needs, you should never forget about the 80/20 rule. This will not only help you set up the best trading conditions for you but also increase how effective your trading operations are. Other than that, this trading regime allows you to spend minimal time and achieve better trading signals.

20% of contracts produce 80% profit

In this sense, the rule works flawlessly! Despite the quality or performance of the strategy, for the vast majority of traders, only 20% of their contracts lead to an increase in capital. The reason for this is not only down to technical trading signals, but purely statistics as well. As we already mentioned before, the market is only ideal for trading 20% of the time, meaning that contracts opened at the right times perform best financially. On this basis, first and foremost, without taking into account the level of predictability of the market when a seemingly accurate trading signal has been received, the risk factors of a contract is increased, meaning the level of possible profit.

By using the basic 80/20 rule when determining your financial plans, you will not only correctly and effectively manage your own funds, but also create the possibility of improving your trading results. To put it simply, it isn’t worth pursuing trading positions for little profit, trade patiently under the right conditions and your signals will increase without a doubt!

Simple positions VS complex

This is perhaps the simplest part of the article. It is all logical here, trading on a basic concept is a very simple process! Judge for yourself, what could be easier than following the chart at a certain time, receiving a forecast from your strategy, and placing trades? We are the ones that make it more complicated for ourselves. For example, if a young child, who didn’t know a thing about complex market patterns or how hi-tech indicators worked, was drawn to analyzing the market, they would generate a large number of accurate signals than you! What you should take from this is that you shouldn’t overcomplicate trading, use the simplest approaches for analyzing the market. Therefore, you will achieve the right contrast ratio and you can dynamically increase your profit growth.

However, when considering this question it is worth mentioning that it is also a bad trading approach to completely ignore complex trading positions. By working with complex analysis systems and strategies you can trade more effectively with long-term contracts. That being said, don’t forget about the 80/20 rule and form the right ratio of total trading positions.

Day trade 80% of the time and 20% in other timeframes

Typically, online traders prefer to trade over minimal chart rate periods. It is completely clear why as this leads to more dynamic trading within a 24 hour period. At first glance, such a trading regime appears to be more interesting and lucrative. However, when keeping in mind the 80/20 rule we know that quantity does not equal quality, the opposite is true. And this is why! By analyzing timeframes shorter than daily, traders significantly decrease their scope for analyzing the market, therefore decreasing the quality of forecasts. The reason for this is technical. The issue is that the shorter chart liquidity timeframes, the higher the level of market noise, significantly influencing the effectiveness of any strategy. Moreover, shorter timeframes demonstrate more chaotic fluctuations which are difficult to analyze. As a result, they can lead to losses. In contrast, day charts enable you to see a wider picture of the market, which undoubtedly increases how effectively you trade. This leads to an increase in the market trends forecasted, better pattern identification, and more accurate trading signals. On the basis of this, you could say that the 80/20 rule applied in such a way is an indispensable tool for improving how effectively you trade. For practice, we recommend that you adopt the following approach to trading operations: 80% of the time work on a daily asset liquidity chart, and 20% of the time work on hour or minute timeframes. However, when you are generating forecasts on shorter timeframes, take into account the overall signals from the daily charts. With such a regime you can improve the results of your trading operations by 30% on average!

Achieving success 80% of the time is psychology!В

Many an article has been written on the connection between the psychological state of an online trader and their likelihood of achieving success. However, the 80/20 rule aptly expands on this question. What do we mean by that? Every experienced trader knows what haunts traders, the fear of losing capital, anxiety, and the drive to make more and do it now! On that front, this leads to a loss of discipline and, as follow, financial loss and disappointment! Therefore, when you enter the market, 80% of your attention should be on controlling your emotions and limiting the negative psychological aspects of trading. This will improve your statistical signals. Relax completely, display a high level of discipline. and form contracts with cold and clear calculations. If you do this, you will definitely achieve success. Yes, of course, 20% of your remaining attention should be focused on the quality of your technical analysis of asset liquidity charts.

Conclusions

So as to ensure that you apply the 80/20 rule effectively when trading on the financial market, you can conduct your own simple experiment, examine your own trading statistics over various periods. Without a doubt, you will notice a basic pattern: 80% of your contracts will be losing, 20% will produce peak profit. This will be true of every indicator as well, from the risk level to the choice of optimum time to trade and the cost-benefit of market analysis. Don’t waste your time fighting nature and mathematics, learn to harness it!

So, the 80/20 rule, as you can see, is very effective for trading on the financial market. If you closely follow this approach for increasing how effectively you trade, then you can definitely improve your trading results by the end of this year.

In conclusion, it is worth mentioning that the full potential of the 80/20 rule as it applies to financial trading has yet to be uncovered! That being said, we can speak to the popularity of it and the great potential it has for other applications in the future!

“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect For Beginners!
    Free Trading Education!
    Free Demo Account!
    Sign-up Bonus:

  • Binomo
    Binomo

    Good Choice For Experienced Traders!

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