Why? Simply because a strategy is a plan and you should have a plan for almost anything you do in life. Sure, sometimes a friend says “Dude, let’s go out, have a beer and see what we do from there” – that’s fine, sometimes you’ll have a blast without planning anything, just go with the flow. But trading does not equal beer drinking, watching movies or going out with friends and should always be planned ahead.
Do You Even Know What is a Binary Options Strategy?
I often hear people use the word strategy in a wrong way. In fact, I don’t think we are talking about right and wrong, just that I usually understand something else when I say “binary options strategy” than the people I was talking earlier. Many say things like “I’ve used the Put strategy for this trade”. Well, Put by itself is not a strategy. Let me use an example: a SWAT team is preparing to take out some terrorists so they plan ahead: Alpha team goes in from the north, Bravo throws tear gas grenades and Charlie breaches the south-west entrance. When all inside, they open fire on hostiles. Ok, that’s a strategy! When asked what strategy they have used, they can explain as above. The discussion will never go like this: What strategy did you use? We used the strategy: Fireee!!! Never in a million years. They did fire, just like you pressed Put, but that was NOT the strategy.
A strategy has clear rules that can offer answers to questions like When do I fire/press Put? Why do I fire/press Put? When do I stop firing/trading? A strategy is a plan that helps you deal with most of the situations that arise during trading and includes clear entry points, as well as money management rules. Never forget about money management because, after all, that’s the goal of trading: making money. And if you don’t learn to manage what you have so far, how can you expect to manage (hopefully) bigger amounts. You cannot go into the market and “wing it” – it doesn’t work that way and a clear proof of that is the fact that all sports teams, athletes, boxers, chess players have a game plan, a strategy. Can you imagine world title match and the participants thinking “Ah, I’ll just wing it”? I can’t. Actually I believe they plan their offense, defense and probably every aspect of the game. It’s called strategizing and it’s what you should do too.
Blame It on the Strategy
Usually if people are not getting the success rate they wished for, they start to become frustrated. If you trade without the help of a strict strategy or system, it means that all your trading decisions are made by you, so who is the only one to blame if trading is not as profitable as you hoped? You, who else. On the other hand, if you follow a clear strategy that doesn’t require you to judge and weigh anything, your trading skills are somewhat taken out of the equation. If you are a mediocre trader, you can have amazing results if you follow a great strategy; if you are a very good trader but follow a bad strategy, you will probably have bad results. Bottom line is: if you follow a strategy to the letter, your trading will be only as good as the strategy is. Knowing this, it’s easier for traders to keep their frustration in check. Losing is bad either way, but it’s easier to lose knowing that your strategy failed than it is to lose knowing you failed. A losing streak can be dealt with emotionally easier if you know it comes from the decisions generated by a strategy, not by you.
Each Day Is Different
Have you ever had a bad day? If you’re not a machine, I am sure you had. You may be affected by personal stuff, work-related stuff, not feeling well, etc. so you are prone to mistakes. If you trade discretionary – without a defined set of rules – one day you can see things differently than other day. Maybe today you are too eager to enter a trade and don’t wait for price to retrace enough or you don’t wait until a clear trend is established and you lose. Maybe tomorrow, thinking about the mistake of the day before, you decide to wait longer before entering the trade… but unfortunately this time you wait too long and enter a trade just when price reverses. See, these are the perils of trading without a clear set of rules: you trade what you believe, not what you see, while if you follow a binary options strategy, most of the time you just have to wait for all indicators to agree and then hit the trigger.
The Conclusion: Strategizing Doesn’t Suck
All of the biggest military commanders in history were great strategists before all. Sure they could wield a sword, but having a plan was of utmost importance. I am not just making things up, it’s history. That’s how a small army managed to get the upper hand on a bigger army, that’s how empires were built – through strategy and hard work, not through winging it and simply going with the flow. So if you haven’t already, it’s time to start planning and strategizing your next binary options move. Choose your weapons from our huge selection of Binary Options Strategies, or feel free to come up with your own.