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Trading Mentality

Trading Mentality

The Trading Mentality: as for every activity, it is very important the mental attitude that we have during our Operations with the Binary Options (and with every type of financial instrument). It’s something that should not be underestimated and that can influence us during our Trading Activity.

 

Trading Mentality

Psychological Approach

 

Always remember this “golden” rule: you cannot always win; when you will start to do Trading with the Binary Options (or other financial instrument), you have to know this fact. The thing that matters, is that you have to win more than you lose. In fact, it’s not possible to do 10/10 of profitable trades (it can occurs of course, if you are also a bit lucky): but it’s easier to do 6/10, 7/10 or 8/10 for example, and although we have not always won we have still made good profits.

 

Emotional Approach

 

The emotions are “our worst” enemy when we do Trading (With any financial instrument); for this reason you should act and reason in a rational and logical way. In fact the emotions can change our way of thinking and due to them, we can take wrong decision that if we had reasoned in a rational way, we would not made.

During a session of Trading, if we follow our emotions we risk to suffer of big losses. For example, if you’ve just lost some money, how would you feel? Probably angry, frustrated or stressed, and you would like to “recover” the money that you have just lost. For this reason, you will take more risks to earn more money in less time and probably you will invest more money than the amount that you have decided to invest for each operation. The result? Usually a disaster, because you will lost other money. You should learn to accept a Loss, it is a normal thing and you should not try to follow your emotions as in the example before, if you want to avoid other possible losses (If you are feeling stressed or angry for the Loss, just stop for a minute and drink a glass of water or something like that: than return in front of your computer, ready to take your next decisions in a rational way).

Same thing in case that you are “winning” too much: when you do some profitable trades, do not be too much excited. Specially when you are a novice Trader, and you make your first earnings you believe to be “infallible” and that you are going to earn from every single operation that you will do. In this case, you will underestimate the risks of the operations or you will invest more money than the normal (Because you feel “sure” that you are going to earn again); the Result? Same thing as before, you will probably lost the money that you have just earned or in the worst case more money.

 

Trading Mentality

Conclusions

 

You should not underestimate the “power” of your emotions and learn to manage them, so that you will not follow your emotions during the Trading activity (Doing so, you will avoid potential losses). For this reason, it is good practice for novice Traders to do their first Trades with a “Demo account” (In a Demo Account you are not operating with real money), to see how you would react to a loss or gain, so that when you will operate with your money, you already know your reactions and feelings in front of a loss or gain and how to manage them.

The Trading Online Guide, strategy to earn with Binary option and Forex Trading online.