4 Costly Trading Emotions

  There are four psychological states of emotions that can affect decision making when trading. They are greed, fear, hope and regret. You must always make your decisions on your interpretation of the facts. You interpret what is, not what you want to be. The market neither knows or cares about your feelings. So they are not relevant facts. If you allow these emotions to overly affect your decisions then your trading will suffer. But you cannot turn off your feelings, and you should not try.  So, what’s a trader to do?   Greed Greed is commonly thought of as … Continue reading

How to Lose with a Winning Trading System

Does this sound at all familiar? There once was a trader, with a small amount of trading experience, who was doing very nicely indeed. So good, in fact, that his account was up almost 200% for the year. The world looked good. He had cracked this trading game. And perhaps all the promises the broker’s site had made when he opened the account were being fulfilled. Of course it was not the broker or anyone else that was to be credited for the success of his trading but his skill and ability to recognise an opportunity, take appropriate action and … Continue reading

The Limits of Positive Thinking

An industry of not inconsiderable size has grown around the exhortation in its various guises of the need to be positive: positive thinking, positive outlook, positive action. I could go on. It’s a simple basic idea which seems intuitively attractive: if you start on any course of action with a positive outlook then you are already ahead when compared to the alternative. However, it’s all too easy and too common that a basic requirement if you are to with this positive outlook and meaningful aspirations is omitted. This is the need to plan. By planning you discover what advantages you … Continue reading

Good Trades and Bad Trades

I’ve a quick question for you: What is the difference between a good trade and a bad trade? Seems pretty simple – a good trade is one where you win a profit, a bad trade is one where you lose. Right? Wrong. It’s not quite that simple. Look at it this way. You have a number of decisions to make and you can only really control a small number of the variables that will determine the outcome of any trade. You have total control over which market to trade, in what direction, over what time period and over the amount … Continue reading

4 Reasons a Trend will End

Does this sound familiar? You decide to trade with the trend. You identify the trend and enter a trade in that direction. The market then stops moving in the direction of the trend and you lose on the trade. If you have ever used a trend following strategy then you will recognise this outcome. It can happen so regularly that you may have decided that a better approach is to wait for the market to move in a clear direction and then trade against it. How did that work out? I don’t know when the trend of ever bigger beards … Continue reading

Are you Looking for the Holy Grail of Trading?

What if I was to offer you, for a very low fee, a trading system with a guaranteed 90% win rate using Binary Options? Would you be interested? Should you be interested? I’m not certain of the answer to the first question as I don’t know if you would be interested. However, many would be. Of the answer to the second question I am certain. You should not be interested. I’ll go further. If I or anyone else makes you a similar offer then close your browser, unsubscribe from the email feed, walk away … whatever it takes. Why? Because … Continue reading

The 9 Stages of Trading

Have a look at the online platform offered by any binary Options broker. What feature do they emphasise most? It’s probably that you can make good profits quickly. It’s true that you can, but it’s by no means certain. But we’ll leave that aside for a moment. What’s the next headline? Quite likely it’s the ease with which you can trade. And if you look deeper into one of the eBooks that are offered then this feature will be right up front. Again it’s true that Binary Options are very easy to trade. But don’t be fooled by this hype. … Continue reading

Can You Learn to Love Your Losses?

Stanley Kubrick’s movie comedy Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb was released in 1964 at a time when nuclear war was a real possibility and reason for worry. In the movie a nuclear war ultimately could not be avoided.  Fortunately, in reality, such a catastrophe has been avoided. We won’t go into the movie’s plot as it has far too many twists and turns but it contained a few strong messages. The most obvious was that people in authority, although powerful, are still human and are therefore fallible and subject to irrational behaviour. … Continue reading

Thinking of Using a Martingale Strategy?

In a previous post I wrote about a so-called trading strategy that is presented to traders in Binary Options as a virtually sure way to win. Click here to view that post. In fact, as we showed, it was nothing of the sort and actually amounted to a virtually sure way to lose your whole fund. What’s wrong with using Martingale? The main problems were that there was no actual market analysis included and it was really just a Martingale betting strategy dressed up a bit. According to Wikipedia, because it is very easy to learn and the maths appear … Continue reading

When is a Strategy not a Trading Strategy?

Probably the greatest benefit of Binary Options for a new trader is that they are just so easy to understand. There’s no need to set targets or stop losses, no need to calculate risk to reward ratios. You either win or you lose and you know your risk in advance. It’s easy to open an account with a small fund, it’s even easier to open a trade and there’s virtually no need to manage the trade once it’s opened. And therein lies one of the greatest problems. It’s so easy to trade that it can appear as though the main … Continue reading