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Preparing yourself for Trading Binary Options
When you Snooze, You Lose.
I was hanging out over a drink at my house, imagining the next car brand that I was going to use to paint the town real red. This had to be the move to do it. I was in the market on a trade using a strategy that had worked for me so many times that I had lost count. This time, I was going for a kill and nothing was going to stop me. The time was 2am local time, I was feeling sleepy but could not sleep. Several times, the trade went a long way into profit territory and I was tempted to take advantage of the variable option to sell the trade. Then I decided to double up the trade to stretch the profit. This had to be my trade, based on the strategy that had worked for me so many times before. Then it happened.
In what seemed like seconds, I opened my eyes and looked at the clock in my room. It was 10 in the morning. In part panic and part consternation, I rushed to the computer which had hibernated since, turned it back on and checked my positions. I was alarmed with what I saw. My account balance was half what it was before I entered into what was supposed to be my killer trade. I quickly scanned the charts and found out that my position which had been in profit had reversed wildly against me. In my tired state, I had dozed off on the table where I was watching the charts and did not notice the surprise 75 basis points interest rate cut by the Feds in late January 2008. In one single move, my trade which was almost at my profit target, had reversed on me and because I was dead asleep after having had just 9 hours sleep in 3 days, I had lost all the money I had made during my 3-day night vigil. My dreams of a new car had gone up in smoke!
Few tips for good Binary Options Trading preparation
So what went wrong? I had a chance to review this catastrophic trade and I can say clearly that so many things went wrong with it. We will now review the several things that went wrong with this trade.
1) Sleep deprivation and trading NEVER go together. A sleep deprived brain cannot think straight, is easily distracted, lacks concentration and is prone to bad judgment. Yes I had made money staying awake for three consecutive nights, but then lost it all on the fourth night. So was it worth it?
2) Greed. I had several opportunities to take some profits off the table and split. But I got greedy. My dream car kept calling me, talking to me, goading me into staying on for more, and more and just a little more, and yet some more, until I dozed off.
3) I forgot a very important trading mantra: anything can happen in an instant. In this case, I got taken out by an unscheduled, surprise FOMC meeting that decided to cut interest rates in the US.
4) Food, coffee, fruits, chocolates – whatever you need to keep yourself fresh. Make sure you bring your snacks with you to your computer station, anything could happen in minute.
5) I always advice traders to close all unnecessary programs, especially software that requires internet access, or just heavy ones. Make sure your computer runs smooth.
Learn a lesson from my errors. Pay attention to what is going on in the market. Don’t be greedy. Last of all, get some sleep! Promise you some more tips soon!
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