UltraTrade: How to Protect Your Trading Capital
Capital is the lifeblood of your trading career. Without it, you cannot trade stocks, currencies, binary options, or any other financial instrument. Sadly, most people who decide to take on online trading treat it as their golden ticket or a “get-rich-quick” scheme. They fail to respect the chaotic and unforgiving nature of the markets, and as a result most traders don’t even last one year before they’ve eventually emptied their broker accounts. They are left poorer than when they first stepped into the ring, all enthusiastic and driven to conquer the markets one trade at a time.
How to Avoid This
If you don’t want to be a part of the 90 percent of traders who fail to make any money, proactively working towards yourself is quintessential. It’s important to realize, however, that it doesn’t merely take technical prowess to trade effectively nor does it take only an unlimited amount of cash to be able to weather through incompetence. Long-term success in trading is an intersection between technical skill and mental fortitude. In fact, you can even say that this is the recipe to living a better life.
Building Your Technical Skills
Trading assets, specifically binary options, don’t necessarily take godlike skills. Nonetheless, familiarity with macroeconomic and microeconomic drivers that affect price, available platform features and tools, and price action in general are prerequisite skills a trader must have before they attempt any live trades.
•Underlying asset. Characteristics of the underlying asset you are trading must be defined before a strategy to trade it can be produced. Major currency pairs, for example, move at a more stable pace than exotic pairs. Energy stocks are also relatively stabler than nascent tech companies.
•Risk/reward. You don’t necessarily have to be a mathematician to compute the risk-to-reward ratio of a trade. In fact, you don’t even have to manually compute it yourself. There are calculators online wherein you can input trade details and it can generate results including the risk-to-reward ratio.
•Data. How you receive information is crucial to understanding which direction to trade. Trusted platforms like UltraTrade offer three data representations, namely Bar, Line, and Candlestick charts. The latter offers more information while taking the same amount of screen space.
Training Your Mindset
The psychological side of trading is equally important as its technical side. You don’t want to be focusing all your faculties into the technical dimension of trading and neglect the psychological aspect of it. Try to examine yourself and look for emotions that can negatively affect your trading decisions. Greed and fear are the main culprits of trading errors. Work on controlling these emotions whilst trading.
Although brokers are licensed professionals who should be looking out for your best interests, not all of them have clients in mind. Shady brokerage firms and online platforms may be practicing all sorts of illegal tactics to make money at the expense of your account. Unauthorized trading, high latency during certain times of the day, and wrongful charges on your trading account are the most common examples of criminal activity that may be transpiring behind the scenes. Make sure you monitor your account and report any unusual financial transactions.
Guidelines For Trading Binary Options
Binary options is only one of the numerous assets you can trade with UltraTrade. As the term implies, you need only choose from two possible outcomes. You can buy either a Call option or a Put option. If you are expecting a market to trend upwards, you buy Call options. If you expect downward price action, you order a Put option. Each option has its individual expiration date and strike price.
Understand Expiration Dates and Strike Prices
You will be facing these two terminologies throughout your trading career in binary options. Strike price is basically the amount that the asset must be either above or below at the options’ expiration date. If it fails to reach the strike price, the position is liquidated at a loss.
Treat Trading Like Any Other Business
Think of trading as an actual business that you have to be working on 24/7. Avoid looking at it as a sideline or a hobby. Making trading a hobby will certainly be a costly mistake. Have pre-trading rituals as well as post-trading rituals. This can involve eating a hearty meal or jogging for a few minutes outside before trading or jotting down trade details on a journal after your trading day.
Protecting your trading capital should be your first and foremost concern. Position sizes should be proactively monitored and controlled to avoid getting margin called. Lastly, treat binary options trading as a fun and interesting endeavor rather than a dull and uneventful activity you force yourself to do every day. Unwavering interest in the markets will surely impact your trading career in a positive way.