Most traders begin their trading career, whether consciously or subconsciously, visualizing “That One Big Trade” – the one trade that will make them millions and allow them to retire young and live carefree for the rest of their lives.
The reality and the cold hard truth for most binary options traders is that, instead of experiencing the “Big Win”, most traders fall victim to just one “Big Loss” that can knock them out of the game forever.
Here are 3 Proper Money Management Trading Tips you MUST implement.
Never bet more than 5% of your bank
This is the general rule of seasoned traders. For example. If you have $100 in your broker’s account, take $5 trades. Most brokers payout 80%/winning trade so this would yield you $4 profit.
If you take 12 trades/day and win 10 of them, you have just made $40. Do this 5 times/week and you made $200 for the week.
Do this for 4 weeks and you have made $800. Perhaps that just paid your mortgage or car payment for the month. Makes sense right?
Set Realistic Income Goals
It’s easy to get caught up in the hype of making big money the day you start trading. This is the furthest thing from the truth. First, you need to crawl before you walk, and you need to learn how to walk before you run.
Proper Money Management when trading takes an enormous amount of mental disciple. Setting realistic income goes should be your #1 priority. For instance:
Set a goal to make a certain amount of money/day as opposed to taking a certain amount of trades per day. This will help you mentally. Seeing your account grow every day will give you the ambition to keep going and not give up.
You got into trading to make money, NOT lose money so don’t bite off more than you can chew. As your money compounds, you will be able to take larger trades, therefore making more money per day.
Lose 3 Trades & Walk Away
Binary Options trading is a real business involving real money so you MUST treat it that way. I have always followed the rule of “lose 3 and walk.” It’s a known fact if you begin losing money while trading, you will start making undisciplined moves to recover those losses. I compare it to folks gambling in a casino. Have you ever lost money in a casino, then became so emotional, you dumped more money in to try to get that money back?
Trading is not a casino. If you lose 3 trades, walk away for 15-20 minutes to clear your head before trading again. Once you come back, you will have a clearer head hence enabling you to make more disciplined decisions and trades.
Other steps you can take, are creating a vision board and keeping a journal of your daily trading activities.
I hope these Proper Money Management Trading Tips helped you. If you have any questions, please don’t hesitate to reach out.
Blessings & Abundance,
Anne Theriault
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