There is a fascinating phenomenon in the field of human psychology known as “loss aversion.” Loss aversion is in part exactly what it sounds like. It is the tendency which we all have to avoid loss—but it is a little more complex than that. When we experience loss aversion, we are willing to trade a chance at substantial gains for a chance to simply avoid a loss.
How the Dunning-Kruger Effect Can Disrupt Your Trading
Recently I wrote an article discussing cognitive biases. These are shortcuts we take in our thinking, usually on an unconscious level. Because cognitive biases ignore or distort the basic rules of logic, they tend to distort good judgment as well. This can cause problems if you are a binary options trader.
How do you feel when you press “High” or “Low” on your trading platform? Do you feel secure in your assessment of what the market is doing? Or do your hands shake, uncertainty stalling you every step of the way?
We talk a lot about getting into the right mindset for trading and making sure you are in a balanced emotional state where you will not go on tilt and make poor decisions. There is no way to ever completely clear your mental slate of the worries, fears, and frustrations you feel, but you never want to sit down to trade when you are totally distraught, either.
As you get into binary options trading and start building up a strong set of skills and techniques, you are actually opening a number of doors to possible career pathways. You can trade for yourself (the default option), but that is not the only option you have. Another alternative is to consider trading for a firm. This is known as proprietary trading, or “prop” trading for short. A lot of people talk about proprietary trading, but not a lot of people know much about it.
Should You Abandon Your Broken System or Try to Fix It?
One of the toughest situations you can face as a binary options trader is one where your trading system or method is not working properly. Maybe you have been using the method successfully for some time now, and only recently it has started to malfunction. It no longer delivers the excellent results you have come to expect. Or perhaps you have no working method, and are simply working very hard to try and generate great results during testing so that you can go live. But no matter what you do, the method simply will not perform as you need it to. In either situation, the prime question is this: Do you keep working on the system, or do you abandon it and move on?
Are you struggling to overcome the next hurdle in your trading journey? In binary options trading, at least for traders who are seriously aiming for long-term profitability, there always seems to be another roadblock in the way.
5 Ways Traders Hold Themselves Back from Success
Been trading binary options for a while without achieving the results you were hoping for? Most traders who do become successful do so after struggling for a while to get there, so it is not necessarily a bad sign that you are having difficulties. Success is a challenge and nobody makes it overnight. What is holding you back from success? Oftentimes it is actually mistakes that you are making. Could you be standing in your own way? Here are 5 common mistakes that traders make which hold them back.
Do Traders Add Value to the Economy?
Whether you are a beginner or you have been trading binary options for some time, eventually, sooner or later, you are going to be accused of performing in a role which contributes no value to the economy. If you have been trading for some time, odds are you have already had this accusation lobbed at you many times. If you are new to trading, you may be caught off guard the first time you hear it. The conversation generally goes like this:
4 Ways Binary Options Trading is Like Poker
There are a lot of binary options traders who are attracted to trading because they enjoy playing at online casinos. There is a big overlap in part because there are a lot of commonalities between trading online and gambling online. Both entail an element of risk, and give you a chance to either win or lose a large amount of money quickly. There is a chance you may lose your entire bankroll, but then again, you might just win big and take the house one night.