Generally, traders start to trade on binary options because of two reasons: a lot of questions appear while trading with classical instruments – from where to open a position and where to put stop to how long keep the profit and how to choose the correct reasons for closing, or “let the profit grow” or maybe “take that the market gave”?
There is no single correct answers to these questions, we deal with the sphere of constantly changing parameters and a high level of uncertainty. For one type of market conditions it will be correct to keep the profit, for another – to take it. Traders with experience will tell you that a clear answer to these questions does not exist. Naturally, under pressure, which inevitably faces trader has in their account floating profits (or floating loss), it is difficult to be objective and make decisions based on the market logic and not the logic of their positions.
And, surely, traders often arrive at a decision using 2 sceneries – optimistic and pessimistic, in other words – they do not entirely perceive the picture of the market with undertones. By my point of view, it happens because of analytical skills and the ability to feel the «markets’ pulse» becomes blunt when trader faces with the pressure of the own position (certain traders’ “market feeling” appears with experience more than 1 year). No wonder, that traders are not allowed to trade and to have own positions in a lot of hedge-funds and banks – their market view must be objective.
So, the task, which traders have, is quite difficult and can be formulated as the following – to be as a referee and as a player in the “market field”. Imagine, if a soccer’s referee was allowed to bet on the event, what the referring would we have? Traders have also to execute some roles and to be in some positions of the perception at the same time. These skills are not been advanced by an ordinary, average person, and the attempt to “get into the opposites’ mind” often finishes with disappointments, nervous stress and, as a result with losses or with a lost profit. That’s why we know numerous cases of the demo-account success, which comes immediately to the end with the transition to “real”. The same thing happens, if trader earned significant funds simultaneously in the short period of time (concerning own expectations) - his tendency to accept the risk growing, and the most important is that trader starts to evaluate the risk with false, as a result is a drawdown of the account.
Binary trading – is one of methods of separating 2 perceptual positions: trader and analyst (the second method – trading algorithmization). So, we can analyze one market, and make trading operations on the other one. When your attention is not drawn with such questions as moving stop loss, scaring to receive the “spike”, agonizing doubts about taking the profit, you can focus 100% attention recourses on the assessment of the market and do not make the mistake while entering the deal. You made 1 deal and you can step to analyze the market searching another deal – when your attentions is not busy with managing the position, you can find another qualitative deal with a high degree of probability, reproducing positive experience in the long run.
Therefore, if you feel it difficult to carry out a qualitative analysis, when you have a floating profit or loss on your account – try to trade your strategy using binary options, afterwards analyze your sensations.
Will anything change or not? Surely, it is not about trend systems (to realize it through binary options is impossible), probably it is about an active day trading or about the trading within the level ranges
Originally Posted by Gulfstream
