When we don’t allow our trading egos to get in the way, it is much easier to prevent a 2 percent loss that turns into a 5 percent or 10 percent loss if the market continues to move in the wrong direction.
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RSSNew York, New York (PRWEB) March 27, 2014
What separates the professional trader from the amateur trader? The difference doesn’t entirely relate to the number of wins and losses. For the longtime New York-based binary options consultancy firm, the distinction actually lies in how professional traders manage reactions to losing trades versus how amateur traders take control of their own reactions to unfavorable trades.
In a recently released how-to on its instructional blog, The Binary Options Experts reveals, “Structuring sound trades after experiencing a loss (or multiple losses) comes mostly as a result of managing reactions and looking at the bigger picture.”
However, Duane Cunningham, VP for global operations of Binary Options Experts, points out that the difficult part about trading for many amateurs is not the actual loss of money from failed trades but making the next trading decision.
Cunningham explains, “It can be a large task to forget the previous trade, collect your thoughts, and make the next decision in an informed, rational manner. But the ability to do this is one of the main characteristics that separates professional traders from amateurs.”
According to the newly released how-to on successful trading from Binary Options Experts, reaction management is key. When both the amateur and professional trader learn how to assess the rationale behind trading systems as opposed to just looking at the outcome of a singular trade, the individual trade (and its unfavorable result) will seem much less significant.
Cunningham adds, “When new traders approach the markets in this way, singular losing trades will be much easier to manage and much less distracting when you are going to place your next trade. This will also make it easier to exit trades once your accepted levels of risk are reached. In lieu of this, new traders tend to become married to losing trades (based on emotional and irrational reactions) and are unwilling to accept losses.”
Of course, the digital options trading experts are not exactly saying that a single trade has “zero importance.” The Binary Options Experts merely wants to highlight the value of taking the “broader picture” into account.
“The next trade is simply part of a much larger whole,” Cunningham begins to clarify, “and even if the original idea is not successful, there will be many more opportunities to make up (and overcome) the loss.”
Another critical building block to managing reactions with trades is approaching the market with a professional mindset. The guide from The Binary Options Experts notes that while it is not exactly easy to take away the emotional factor from the equation, traders should begin to accept that there are inherent risks, as there are with any type of trading. Along with accepting or recognizing the risks, traders should also try to be receptive to the idea of not trading when the market dictates such action.
The guide goes on to add, “When we don’t allow our trading egos to get in the way, it is much easier to prevent a 2 percent loss that turns into a 5 percent or 10 percent loss if the market continues to move in the wrong direction. Larger losses like these are unacceptable for professional traders, so it pays to watch the signals and to pay attention to what the market is telling you.”
The last piece of the puzzle relates to sustaining a long and (what would hopefully be a) prosperous career in binary options trading. This includes actively following trading rules, which, The Binary Options Experts concludes, helps traders to diversify instead of putting all their eggs in one basket.
In conforming to the trading rules and in maintaining a rational frame of mind, traders would find it easier to sustain career longevity in the binary options market.
Amateur traders are advised to take their cue from professional traders because these are traders who understand that losses are part and parcel of the market. But sound money management and a good trading plan, The Binary Options Experts points out, will take out the temporary difficulties, particularly once the bigger picture comes into focus.
Individual investors or would-be traders interested in finding out what is binary options trading along with various guides on maximizing opportunities in the market can explore The Binary Options Experts blog today.