When asked, who needs a personal trading plan, there is only one right answer: every trader, regardless of whether it’s back Social Trading back a novice or a professional!
As a personal trading plan is created and used, it is always up to everyone. But you should not do that, because the benefit is enormous. The following contribution provides information about the benefits of such a trading plan, the general rules and the way a plan is drawn up.
In principle, a trading plan can be of great benefit in different ways. One of the biggest advantages is that the trading plan makes it easier to assess or “manage” the risk. Those who can name the risk other 24option over in advance will have a demonstrable lower loss. A risk assessment for each trade in equity is helpful. For example, this might look like this:
- 1 to 2 percent of equity = low risk
- 2 to 5 percent of equity = medium risk
- 5 to 20 percent of equity = high risk
- more than 20 percent of equity = very high risk out anyoption not
Only those who are aware of the specific risk can calculate with an amount that is used for a trade. Not to be neglected here is the chance-risk ratio – CRV for short. This results from the ratio of potential profitability and potential loss. It is therefore the risk to be compared with the potential profit to be by plus500 by compared or divided. This gives the CRV, which should be at least 2 to 1. For example, if the risk is 200 euros and the potential profit is 400 euros, the CRV will be 2 to 1.
Emotions have nothing to look for in trading with binary options. Traders have to be aware of this again and again. However, since the timing of the entry as well as the exit is immensely important, time pressure and stress often arise with traders. Whoever surrenders to these feelings makes irrational decisions. Losses are then pre-programmed.
Due to the aforementioned problems, it is therefore very important that certain entry and exit criteria are defined and defined in the trading plan. For example, the chart technique could be used to follow market trends and then commit also Copy Trading they itself to set a trade only when a certain condition (eg significant resistance) is met. Alternatively, there is the option of keeping profit and loss limits.
When creating the trading plan, a trading diary or trading log may also be missing. Not only can open trades be traced, but also valuable experience can be gained. In this case, the reasons for the profit or loss should be written down in a diary for each trade.
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On a trading diary, it is particularly advantageous that he etoro person a larger context is created or kept in mind. This tool gives an overview of the course of trade, mistakes, successes and much more. It is very her IQ Option our important that traders are honest with themselves and develop a learning ability. Basically, honest assessment is the best strategy to learn from mistakes.
Each trading plan must be created personally and individually. However, there are some general rules or questions that each trader should answer and integrate into the trading plan:
- What is my motivation for the binary trade?
- How do I face the risk?
- How much time can I spend on binary options?
- What knowledge (eg market conditions, analyzes, strategies, etc.) do I have?
- How much capital do I need to trade with binary options?
- What would I like to achieve with the binarrope trade?
- What is a success for about browse around here me?
- What loss can I get?
As already mentioned above, a trade plan can also be compared with a map that serves as a guide.