Judgmental errors are very common in binary options trading. This can lead to shattered confidence in consecutive trading strategies, in turn affecting profit margins. Trading wisdom is about taking the proper course of action in any trading situation. Without experience, it is not possible to understand the wise course of action for a trend. Therefore, it helps to honour the general “Not to Do Rules” in the binary trading process to avoid steep learning curves.
The 10 Things to Avoid
Do not deal with unreliable brokers. If you are not convinced about the reliability of the binary options broker you are considering working with, do not sign up anyway. Choose to work with a broker with proven integrity.
Do not deal with poor trading platforms. The trading platform you choose to work with should provide you with a comfortable navigation layout to perform your trade comfortably. If you are not comfortable using the tools and features in the trading platform despite several attempts, do not continue with the trading platform.
Do not confuse between brokers and trading platforms. Traders often confuse between brokers and trading platforms. Good trading platforms can be used by unreliable brokers. Bad trading platforms can be used by reliable brokers. Both these combinations are no good. Look for a good platform plus good broker combination for your trades.
Do not deal with trade types that are not compatible with your risk appetite. High risk trades require high risk appetite. If you are not a trader with a high-risk appetite, you better do away risky trades from your portfolio.
Do not get scared of small losses. You should be prepared to deal with profits and losses alike. Small losses should not affect your ability to move on with trading.
Do not be overly confident. While it is okay to accept small losses, accepting big losses lightly can lead to drain of bankroll. You should be scared of big losses. You should sit back, think, resume your emotional composure before you go to trade next.
Do not try revenge trading. When you are stressed, it is possible that you can engage yourselves in revenge trading. When you do this, chances are likely that you will blow your budget away for nothing. Resist the temptation to involve in revenge trading.
Do not confuse between strategy and habit. You should execute your trades in accordance with your strategies. Chances are that you might mix up habits with strategy. Beware, strategy and habits are different. Reason out your decision to trade, analyse if you are involved in a strategic effort, and proceed accordingly.
Do not get trapped in binary options scams. Binary trading scams present themselves as fake promises, fake non-profitable systems, fake signal providers, fake brokers, and more. Review the feasibility of the offer and act accordingly. Anything that is too good to be true is not true.
Do not trade when you do not understand the asset type. When you do not understand your asset type, you will not be able to anticipate the knock-on movements correctly. Try to understand and specialize in a few assets in the beginning as opposed to working with a big bunch of assets that you are not sure of.