Psychological edge in trading binary options
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    Psychological edge in trading binary options

    Traders often come to binary options due to the following reason: they are confused about uncertainty that comes with traditional trading. Where to place your stop, should we move our stop-loss, should we “let profit run” or “take what the market gives” to us?

    There are no certain answers to these questions as we are operating in the environment with high level of uncertainty, ambiguity and conflicting information. It will be right for one type of market conditions to hold position whereas it would be wiser to take profit in the other one. Traders with experience of active trading over 1 year will be agree that there's no certain answers on such questions. All we are able to do is to build hypothesis and stick to it, or to change it due to changing market conditions.
    It's hard sometimes to make reasonable decisions when you have a position. That's why traders often recall worst case scenarios or have extremely optimistic view. They have two outcomes in their minds – “yes” or “no”, but market is often much more complex.

    According to my trading experience, everything of described above happens, when traders fail to distinguish between “analytical mind” and “trading mind”. “analytical mind” is a point of view where we are objective, we see the big picture as well as numerous nuances, we are flexible and can make reasonable conclusion about the market “here and now”. “Trading mind” is something associated with logics of your account, not the market. We tend to stick our attention to something that threats our position or gives a hope for quick profits. “Trading mind” switches on when we are in position. That's why most analytics in hedge funds or other serious institutions are not permitted to trade – they have to be neutral.

    So, you might see that traders face a very difficult task – they have to judges and players at the same time. Imagine that judge in the soccer game was permitted to make bets on outcome of the game. How do you think – would they be good judges in this situation? For most people, be an observer and a participant at the same is a very tough task, when they try to get inside of mind of their competitors, all they have is stress and emotional discomfort. Now you understand why many traders fail after they transition from demo to real money account.

    Trading options is a way to distinguish two positions of perception (“analytical” and “trading” mind). Thus, we can analyze one market (chart of the currency pair) and trade on the other. When our attention is not absorbed by getting stopped out of your position, you can pay 100% of your attention to process of trade selection. Of course, in this case you will more than likely spot a good opportunity, repeating this positive cycle in the long run.

    That's why, if you feel that you experience difficulties in making good analysis when having paper profit or loss, try trading your strategy with binary options and see what happens.

    P.S. Of course, if you are trading big trends, it can not be replicated in trading with binary options (they have limited upside for profit).

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    Last edited by Value trader; 01-15-2015 at 09:48 AM.

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    Really, this is true that people need ease with less risk, they know that forex market is a high risk market, but they don't see this, they just see the high returns in this business, that's why they seek some expert advisers, some scripts, someone to copy or someone with PAMM account to invest and earn money with less efforts, now they can do that with the help of binary options, so they get attracted with this option. They need less risk, and this is available in binary option, but main thing that is needed in this business is called analysis, and that is too much difficult. :)

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    Registered user snnaky's Avatar
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    [lang=ar]Psychological stages throughout the binary options trader is a mixture of fear and anxiety between profit and loss and all of this resulted from the lack of adequate study, which is given to this type of trade some of the emotional calm, which certainly affects the appropriate decision
    This attention must be paid to these points[/lang]

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    Complexity is the main thing that is best describe the market condition, and its trading with the binary option. If you want a straight path trading binary option, you should try not to fear. Try to build up a trading system that will work with a specific period of time, and test this for like 3 months of demo. By then, if it works, that will be your pattern, and if you do have pattern of trading this, you will be balanced psychotically because you trust it.

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    Quote Originally Posted by snnaky View Post
    [lang=ar]Psychological stages throughout the binary options trader is a mixture of fear and anxiety between profit and loss and all of this resulted from the lack of adequate study, which is given to this type of trade some of the emotional calm, which certainly affects the appropriate decision
    This attention must be paid to these points[/lang]
    I think psychology in binary option is more convenient, because traders are not concerned with floating big minus, because the wrong analysis. The binary option using the expired time. traders limit loss by time, and will only lose the contract. binary option is very interesting, this is a new way of trading, I think in the future, by way of binary option trading, will be favored by many traders.

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    It is really about put or call, but it is more than that. The choice of the trader is affected by many factors that are challenging. But, when the trader have a good trading system that is time proven, this could be the point of help for the trader all the time in the trading of binary option, this is not an issue if you have you defined trading strategy.

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    we are able to state which while using greatest influence is going to be therefore poor if you're buying and selling having a higher funds and so i believe the very best influence is actually 1: 100 as well as i'd numerous border phone however in truth it might be a tragedy for just about any investor however if you're the newbie investor it might be an excellent chance that you should study from your own errors.

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    you right , also the political reason has behind it , look at our finance minster he is also playing a big role on our stock market lol though not psychically but his speech, now black money entering on the market and which will be cause the fall again market just like 96 or this year, I better not in stock market lol

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    Registered user lawners1791's Avatar
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    Quote Originally Posted by ngalapreceh View Post
    I think psychology in binary option is more convenient, because traders are not concerned with floating big minus, because the wrong analysis. The binary option using the expired time. traders limit loss by time, and will only lose the contract. binary option is very interesting, this is a new way of trading, I think in the future, by way of binary option trading, will be favored by many traders.
    yes to spends of the good slot with the available credit on the run. as to work of more with the chance as to delivering of the good signals on referring of the best on options to calls of the good target to complete with the predetermined terms.

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    Binary options are some things that you don't have to male sure that you have a leverage that way you can incveat the amount that you want meaning that when trading you don't have to have an mt4 to trade with binary options are very simple to trade with at way you can know how to trade

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