There are three spokes that make up, what I call the Wheel of Success as it relates to binary options trading. The first spoke is content. Content consists of all the external and internal market information that binary options traders utilize to make their trading decisions. All binary options traders must purchase value-added content that provides utility in making their trading decisions.
The most important type of content is internal market information (IMI). IMI simply is time and price information as disseminated by the exchanges. After all, we all make our trading decisions in the present tense based on time and price. The second spoke is mechanics. Mechanics is how you access the markets and the methodology that you employ to enter your trades. You must master mechanics before you can enjoy any success as a binary options trader. A simple keystroke error can result in a loss of thousands of dollars. A binary options trader can ruin his entire day with an inadvertent trade entry error. Fast and efficient trade execution, especially if you are trading turbo binary options, will enable you to hit a bid or take an offer before your competitors do. Remember, the fastest survive. The third and most important spoke in the Wheel of Success is discipline. You must attain discipline if you ever hope to achieve any level of trading success. Trading discipline is practiced 100 percent of the time, every trade, and every day. Review the following 9 Rules of Binary options Trading Discipline. You must condition yourself to behave with discipline over and over again.
#1 The Market pays you to be disciplined:
Trading binary options with discipline will put more money in your pocket and take less money out. The one constant truth concerning the markets is that discipline = increased profits.
#2 Be Disciplined Every Day, in every trade, and the market will reward you. But don’t claim to be disciplined if you are not 100percent of the time:
Being disciplined is of the utmost importance, but it is not a sometimes thing, like
claiming you quit a bad habit, such as smoking. If you claim to quit smoking but you sneak a cigarette every once in a while, then you clearly have not quit smoking. If you trade binary options with discipline nine out of ten trades, then you can’t claim to be a disciplined trader. It is the one undisciplined trade that will really hurt your overall performance for the day. Discipline must be practiced on every binary options trade.
#3 Always lower your trade size when you’re trading poorly:
All good binary options traders follow this rule. Why risk more than 5% of your account size on a binary options trade? If I have two losing trades in a row, I always lower my trade size down. If my next 5 trades are profitable, then I move my trade size back up. In Binary options, lower your trade size and then raise your trade size after 5 consecutive winning trades.
#4 Develop a methodology and stick with it. Don’t change methodologies daily.
It is important for all binary options traders to actually write down the specific
market prerequisites (setups) that must take place in order for them to make a
trade. Good binary options traders have a set of rules, market setups or price action that must appear in order for them to take the trade. You must have a game plan.
If you have a proven methodology but it doesn’t seem to be working in a given trading session, don’t go home that night and try to devise another one. If your methodology works more than one-half of the trading sessions, then stick with it.
#5 You always want to be able to come back and play the next day.
Never put yourself in the precarious position of losing more money than you can
afford. The worst feeling in the world is wanting to trade binary options and not being able to do so because the equity in your account is too low.
#6 Love to lose Money:
This rule is one of the rules that frequently get ignored in the trading world. What I mean is to accept the fact that you are going to have losing trades throughout the trading session.
#7 Consistency builds confidence and control:
How nice is it to be able to turn on your PC in the morning knowing that if you play by the Rules, trade binary options with discipline and stick to your methodology, the probability of a successful day is high?
#8 Make the same types of trades over and over again:
A bricklayer shows up for work every day of his working life and executes with the
same methodology brick by brick by brick. The same consistency applies to successful binary options traders, as well.
#9 Understand the Nature of the Markets:
The market moves wherever it wants to go. It does not care about you or me. It
does not play favorites. It does not discriminate. It does not intentionally harm any one individual. The market is always right. You must learn to respect the market. The market will mercilessly punish you if you do not play by the Rules. Learn to condition
yourself to play by the 9 Rules of Binary options Trading Discipline and you will be rewarded.